Security Fire Ins. Co. of New York v. Kentucky Marine and Fire Ins. Co.
| Decision Date | 04 June 1869 |
| Citation | 70 Ky. 81 |
| Parties | The Security Fire Ins. Co. of New York v. The Kentucky Marine and Fire Ins. Co. |
| Court | Kentucky Court of Appeals |
BODLEY & SIMRALL, For Appellant.
WM. ATWOOD, For Appellee.
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In the summer of the year 1865 McFerran, Manifee & Co., owning a large quantity of cotton purchased in Georgia for resale in New York — to be shipped from Columbus in barges down the Chattahooche to Appalachicola, in Florida, and to be thence transhipped in the Mary Lucretia and Metropolis, ships, to the city of New York — procured from the appellee an oral contract for insurance against the perils of navigation, which the appellant reinsured to the appellee; and to fill up the uninsured gap between the landing and transhipment of the cotton at Appalachicola, the owners also obtained from the appellee, on the 10th of October, 1865, an oral contract for insurance against fire risks "on cotton at Appalachicola awaiting shipment per Mary Lucretia and Metropolis." On the same day the appellant made with the appellee a similar contract of reinsurance of the same cotton against the same risk. And on the 17th of October, 1865, the appellant's agent, Muir, made in his book B, kept by him as evidence of insurances, an entry of the insurance and reinsurance described as insuring against a "fire risk on cotton at Appalachicola awaiting shipment."
There is neither proof nor sufficient presumption that at the date of the entry in book B owners or insurers knew that the cotton had reached Appalachicola; but, as afterward appeared, some of it (forty-six bales) had been consumed by fire at the wharf in Appalachicola on the 6th of October, 1865.
On satisfactory proof, the appellee adjusted the loss and paid the owners its portion of the liability according to its contract of insurance, and thereafter brought this suit against the appellant for a specific execution of its contract of reinsurance and for indemnity in damages, and finally recovered a judgment, which by this appeal the appellant seeks to reverse on the following grounds, on which the action was unsuccessfully defended:
1. There was no retrospective insurance or reinsurance against fire beyond the date of the contract.
2. An oral contract for insurance was not, according to the common law, binding and enforceable.
3. If such a contract was valid at common law, the appellee's charter modified that law in that respect by requiring a written memorial signed by the president; and consequently, as the alleged insurance was not binding, the reinsurance was not obligatory, because it only insured the original insurer against an enforceable liability.
It seems to this court that none of these grounds are sustained by the law and the facts in the case.
1. Simple insurance, prima facie, implies the existence of the thing insured at the date of the contract. But when, as in marine policies, the thing being distant and its status unknown to either party, an insurance "lost or not lost" may bind the insurer for a loss occurring before the date of the contract. Such a provision is quite usual in fire as well as marine insurances, and without these express words circumstances may sufficiently imply the same intent. (1 Arnould on Insurance, 25; Phillips on Insurance, sec. 925; General Int. Ins. Co. v. Ruggles, 12 Wheat. 403.)
The marine insurance and reinsurance in this case were expressly retrospective, and the evident purpose of the owners and of the appellee was to protect the cotton from fire from the landing to the transhipment of it at Appalachicola. The testimony is conclusive to that effect. This authorizes the presumption that the insurance was co-extensively comprehensive; and the testimony, when carefully analyzed, preponderates decidedly that way, and does not conflict with the necessary construction of the entry in book B.
2. Although a policy, as an executed contract of insurance, is defined to be documentary and authenticated by the underwriter's signature, yet a contract to issue a policy as an executory agreement to insure may be binding without any written memorial of it. No statute of frauds applies, and the common law does not require writing. This has been often adjudged; but for the purpose of mere authority now the cases of Taylor v. Merchants Ins. Co., 9 Howard, 390; and of Commercial Ins. Co. v. Union Mutual Ins. Co., 19 Howard, 318, are deemed sufficient. And in the case in 9 Howard the Supreme Court decided, as many other courts have also decided, not only that such an oral contract for a policy might be specifically enforced, but that a court of equity having jurisdiction for specific enforcement would, to avoid unnecessary circuity, adjudge the damages just as if a policy had...
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