Northrup v. Mississippi Valley Ins. Co.

• Decision Date: 31 March 1871
• Citation: 47 Mo. 435
• Parties: ASHLEY K. NORTHRUP et al., Appellants, v. THE MISSISSIPPI VALLEY INSURANCE COMPANY, Respondent.
• Court: Missouri Supreme Court

47 Mo. 435

ASHLEY K. NORTHRUP et al., Appellants,

v.THE MISSISSIPPI VALLEY INSURANCE COMPANY, Respondent.

Supreme Court of Missouri.

March Term, 1871.

Appeal from St. Louis Circuit Court.

Sharp & Broadhead, and J. F. Smith, for appellants.

Cline, Jamison & Day, for respondent, among other points, contended that the indorsement on the policy, “Loss, if any, payable to Northrup,” etc, by the clerk of defendant, did not amount to a renewal of the policy to plaintiffs. The clerk had no power to make a new policy, and could not make a substitution amounting to a renewal. (42 Mo. 374.) There was error in the action at Special Term, and the reversal by General Term was proper.

WAGNER, Judge, delivered the opinion of the court.

The material facts in this case appear to be these: In the month of October, 1866, respondent issued two policies of insurance to the St. Louis Museum, Opera and Fine Art Gallery Association: one for $2,500 upon the “theatre part” of the building known as the St. Louis Museum and Opera House, the other for the same amount “on museum collections contained in museum part” of the building. The rate of premium charged and paid on each of the policies was three per cent., and on each was the written entry made at the time of issuing the policy, “notice of other insurance waived until required.” By the terms of the policies the respondent insured the property for one year against loss or damage by fire. The policies contained nothing in regard to the manner or form in which the companies could make contracts of insurance, nor by what officers they should be made; nor was there anything said in them in regard to applications for insurance on property within the limits of the city of St. Louis, though a printed clause provided that “applications for insurance on property out of the city should be in writing.”

There were no conditions or provisions regarding the sale of the property insured, but there were two printed clauses in reference to an assignment of the policies as follows: “The interest of the insured in this policy is not assignable unless by consent of this corporation manifested in writing, and in case of any transfer or termination of the interest of the insured, either by sale or otherwise, without such consent, this policy shall from henceforth be void and of no effect.” Also, “the interest of the insured in this policy is not assignable unless the assignee, before any loss happens, shall give notice in writing of the assignment to this company, in order to have the same indorsed on or annexed to this policy; and this company, when so notified, may elect either to continue the insurance, and express the same by indorsement on this policy, or refund a ratable proportion of the premium for the time of the risk unexpired, and cancel the policy.”

In March, 1867, before the expiration of the policies, the property insured was sold under a deed of trust, and at the sale R. F. Lamb and the appellants purchased the same. Lamb, who was president of the association, and in whose possession the policies were, took them to one Brawner, an insurance broker, told him of the sale to himself and appellants, and instructed him to get the property insured to them as the owners. Brawner gave the respondent written and verbal notice of these facts, and applied to it for insurance to Lamb and appellants on the property. He sent the written notices, together with the policies, to respondent's office by his book-keeper, and after a day or two had elapsed respondent returned the policies to Brawner with the written entry on the face of each one, “Loss, if any, payable to R. F. Lamb, A. K. Northrup and A. Boeckler.” Brawner then gave the policies to Northrup. About two weeks after Brawner had delivered the policies to Northrup with these written entries on them, the museum collection was sold, and the policy on it was sent to respondent's office with a request that it might be changed to cover chairs, benches and furnaces, as the museum collection was removed from the building. The policy was handed to and the request made of Jennings, the president and managing officer of the company, who then made this additional entry in writing on the face of the policy:

“This policy is hereby changed to cover chairs, benches and furnaces, instead of museum collection, which is removed.

WM. H. JENNINGS, President.”

In July, 1867, the building and the chairs, benches and furnaces were totally destroyed by fire. Notice of loss was immediately given to respondent and proof of loss furnished. Jennings, the president, in conversation with Lamb and Northrup, told them that the entry, “Loss, if any, payable,” etc., “was all right;” if other companies paid, he would. It seems it was then supposed that the building was set on fire, and resistance to payment was intended on that ground, but no objection was made to the policy or the indorsements. After the loss occurred, Lamb assigned all his interest in the claim for the loss to the appellants. Respondent failing to pay, the appellants brought this suit, setting out the terms and conditions of the policies and the indorsements thereon, with an averment that the appellants complied with all the conditions of the policies and furnished notice and proof of loss.

The answer of the respondent admits that it issued the policies to the St. Louis Museum, Opera House and Fine Art Gallery Association, as charged in the petition, but denies that it had notice of any assignment of the property to appellants and Lamb, and denies that it ever agreed to insure appellants and said Lamb upon the same terms and conditions of said policy as charged in said petition, or that it ever received any application from appellants for any such insurance, or any consideration or premium therefor, or that it agreed for the unearned premium to insure appellants and said Lamb. It further denied that it agreed, in writing, to pay the loss, if any, to Lamb and appellants, but alleged that the policy became void before any loss occurred, by reason of the sale and transfer of the interest of the Museum Association without the knowledge or consent of the respondent manifested in writing, as required by the terms of the policies, and that by reason thereof the same was void and not binding. After pleading to the counts of the petition, the answer made a general averment that, when the risk was taken and the policies issued, the museum was conducted in a quiet and orderly manner, so as to make it a safe risk, and afterward it was occupied in such a way as to make it more hazardous, and that in consequence thereof the policies became void.

The answer does not deny the power and authority of the person who made the entry on the policies, “Loss, if any, payable to R. F. Lamb, A. K. Northrup and A. Boeckler,” to bind respondent on any manner or by any contract he might choose to make. The indorsements or entries were made by Cornish, who was the secretary pro tem. in charge of the office, and afterward expressly approved by Jennings, the president. There was no charter or by-law pleaded showing any restraint or prescribed condition for making or indorsing policies, nor was there anything set up to show an excess of authority on the part of the officers.

Upon the case as thus substantially made, the Circuit Court, at Special Term, found for the appellants. This judgment was reversed in General Term, and an appeal was taken. The question now is, under these circumstances can the respondents be held liable?

In the absence of any explicit prohibitions from making parol contracts contained in the charter and by-laws, corporations, like natural persons, may make parol contracts. Indeed, by the whole course of decisions in this country, corporations, in their contracts, are placed upon the same footing with natural persons, open to the same implication, and receiving the benefit of the same presumptions. (Ang. & Ames on Corp., § 240.)

In the case of ...