The People's Ins. Co. v. Paddon

• Decision Date: 31 March 1881
• Citation: 8 Ill.App. 447,8 Bradw. 447
• Parties: THE PEOPLE'S INSURANCE COMPANYv.STEPHEN PADDON ET AL.
• Court: United States Appellate Court of Illinois

8 Ill.App. 447

8 Bradw. 447

THE PEOPLE'S INSURANCE COMPANY

v.STEPHEN PADDON ET AL.

Appellate Court of Illinois, First District.

March Term, 1881.

OPINION TEXT STARTS HERE

APPEAL from the Superior Court of Cook county; the Hon. R. S. WILLIAMSON, Judge, presiding. Opinion filed April 7, 1881.

Messrs. GARY, CODY & Gary, for appellants; that to constitute a valid contract of insurance the minds of the parties must meet as to the property, risk, amount insured, time the risk is to run, and the premium, cited Trustees v. Ins. Co. 28 N. Y. 153; Thayer v. Ins. Co. 10 Pick, 326; Christie v. Ins. Co. 3 Cas. Ct. of Sessions, 360; Ins. Co. v. Holzgrafe, 53 Ill. 516; Strohn v. Ins. Co. 37 Wis. 625; May on Insurance, 41; Flanders on Fire Insurance, 116; Wood on Fire Insurance, 16; Sandford v. Ins. Co. 11 Paige Ch. 547.

A person cannot be the agent of both the insurer and insured: Ins. Co. v. Ins. Co. 17 Barb. 132; Michode v. Girard, 4 How. 513; Thornton v. Irwin, 43 Mo. 153; Bently v. Ins. Co. 17 N. Y. 425; Beal v. Kirman, 6 La. 407; Broker v. Ins. Co. 2 Mason, 371; Church v. Ins. Co. 1 Mason, 345; Vanderpool v. Kerns, 2 E. D. Smith, 170; Flanders on Insurance, 210; Copeland v. Ins. Co. 6 Pick, 198; Story on Agency, § 211; Dunlap's Paley on Agency, 33; Exparte Bennett, 10 Ves. 381.

Admissions of an agent bind his principal only when made during the continuance of the agency, in regard to a transaction then pending: Baptist Church v. Brooklyn Fire Ins. Co. 28 N. Y. 159; 1 Greenleaf, Ev. § 114; Hayes v. Houston, 86 Ill. 486; N. W. R. R. Co. v. Hack. 66 Ill. 238.

Messrs. HUNTER & PAGE, for appellees; as to the question of agency, cited Com. Ins. Co. v. Ives, 56 Ill. 402; Lycoming Ins. Co. v. Ward, 90 Ill. 545.

As to admission in evidence of the proofs of loss: Knickerbocker Ins. Co. v. Gould, 80 Ill. 388; Lycoming Ins. Co. v. Rubin, 79 Ill. 402; Ætna Ins. Co. v. Maguire, 51 Ill. 342; Ins. Co. v. Schottler, 39 Ill. 71.

McALLISTER, P. J.

At the time in question, and for several years prior thereto, Stephen Paddon & Co., the plaintiffs below, were and had been dealers in the city of Chicago, in sal-soda and other chemicals. There were two warehouses in which they were accustomed to keep their merchandise--one being the Empire Bonded Warehouse, and the other the Empire Free Warehouse, as they were called, but they were adjoining buildings. Stephen Paddon himself always attended to the matter of procuring insurance on the goods of his firm. There was during most of said time a street insurance broker of the name of Miller, with whom Paddon was intimately acquainted, who acted as agent for plaintiffs in procuring for them all their insurance. Paddon would inform him of the goods and the amount desired; then Miller would select the company or companies, determine the rate of premium, and even the extent of the risk, and from time to time send in his bills for premiums, etc., and plaintiffs would pay them, they scarcely ever knowing in what company or companies the insurance was taken. Paddon would tell Miller all he wanted was for him to put them in good companies, and they trusted wholly to him to do so. He was not only plaintiffs' agent, but the relations between Miller and Paddon were very confidential.

Miller became a member of the firm of W. G. McCormick & Co., but just when that was does not appear, though it must have been a year and a half before February, 1880. That firm were not only insurance brokers, but were the local agents in the city of Chicago of the defendant insurance company, and four or five other companies. However, when Miller went into that firm, Paddon transferred the insurance matters of his firm to that of W. G. McCormick & Co., and they became his agents, though Miller personally attended to the business of plaintiffs' insurance precisely as he had done prior to his connection with McCormick & Co.

Plaintiffs claim that they had, February 12, 1880, 487 casks of English sal-soda in said Empire Free Warehouse, which was worth four thousand dollars. They had had merchandise in the Empire Bonded Warehouse, but at this time had sold out what they had there; but January 19, 1880, they had through McCormick & Co., as local agents of defendant company obtained a certificate of insurance in defendant company of one thousand dollars on merchandise in said bonded warehouse, the sal-soda being in the other warehouse. Now, it is claimed by plaintiffs, and that is the cause of action set out in the first count of their declaration, that by a verbal contract made February 13, 1880, between them and the defendant corporation represented by W. G. McCormick & Co., that certificate was transferred so as to cover the sal-soda aforesaid, in the Empire Free Warehouse, which was destroyed by fire on the evening of February 14, 1880. And plaintiffs also claim, that by the same contract or arrangement by which such transfer was made, on said 13th of February, they made a verbal contract with the defendant corporation, represented as aforesaid, whereby the defendant agreed to insure said merchandise in said Empire Free Warehouse from said last mentioned date, for such time as plaintiffs might elect, in the sum of one thousand two hundred and fifty dollars, in consideration of a premium to be paid by plaintiffs to defendant, at the rate of seventy-five cents per annum on each one hundred dollars. This latter verbal contract constitutes the cause of action set out in the second count of the declaration. So that, as it seems to us, the causes of action set out in both counts depend upon the fact and validity of such verbal contract.

There is no statute in this State affecting the validity of such a contract; and the doctrine is now very generally recognized in this country that the rules of the common law present no impediment, providing that all the requisites prescribed by those rules as indispensable to every contract, be complied with. As respects a verbal contract of insurance, those requisites are substantially these: The minds of the respective parties must, at some instant of time, have met upon all the essentials of the contract. Those essentials are: the parties thereto; the subject-matter of insurance; the amount for which it is to be insured; the limits of the risk, including its duration in point of time, and extent in point of hazards assumed; the rate of premium; and generally upon all the circumstances which are peculiar to the contract and distinguish it from every other, so that nothing remains to be done but...