Union Ins. Co. v. Grant

• Decision Date: 31 May 1878
• Citation: 68 Me. 229
• Parties: UNION INSURANCE COMPANY v. HENRY H. GRANT et als., administrators of William McGilvery.
• Court: Maine Supreme Court

68 Me. 229

UNION INSURANCE COMPANY v. HENRY H. GRANT et als., administrators of William McGilvery.

Supreme Judicial Court of Maine.

May 31, 1878

BILL IN EQUITY.

F A. Wilson & C. F. Woodard, for the plaintiffs.

J Williamson, for the defendants.

VIRGIN J.

For several years prior to March 9, 1876, one McGilvery effected numerous policies of insurance upon hulls, cargoes and freights in his own name, for whom it m??ght concern, loss payable to himself. Some of the policies were effected upon his own property, but many of them upon that of others. But for whosesoever benefit they were insured, he gave to the plaintiffs his individual promissory note for each respective premium; and, on delivery of the policies to his principal he sometimes received the premiums in cash, and charged others to the assured on his private account.

At the above mentioned date, McGilvery died, leaving unpaid his premium notes to an amount exceeding $9,000, and having due to him on account from his principals a large sum, as premiums on unexpired policies, some of which has since his death been paid to the defendants--administrators on his estate.

The plaintiffs claim that, in equity and good conscience, they are entitled from the assured to such of the premiums on unexpired policies as had not been paid to McGilvery at the time of his decease; that the names of his principals are unknown to them, and the policies give no clue thereto; and that the defendants decline to give them any information in the premises. Wherefore they pray for a discovery of what was due to McGilvery, at the time of his decease, on outstanding policies, together with the names of the parties, classes, etc.; how much has since been paid, and that these sums may not be commingled with the general property of the estate; and for an injunction of sequestration, etc.

The policies issued by the plaintiffs contain the clause generally found in American policies--that in case of loss, such loss shall be paid in sixty days after proof of adjustment thereof, " the amount of the premium note, without discount, if unpaid, and all sums due to the company from the insured, when such loss becomes due, being first deducted," etc.

This clause compels the assured to submit to the deduction of the premium note at all events, if unpaid, by whomsoever it may have been given. Hurlbert v. Pacif. Ins. Co. 2 Sumn. 471, 478. This provision was inserted for the benefit of the insurer, and obviously to meet the hazard of the dishonesty or insolvency of the broker, by entitling the underwriter to deduct the premium, whether the action on the policy be brought in the name of the principal or of the agent. While this protects the insurer, it subjects the assured to the hazard of a double payment of the premium, which he can avoid by proper care and diligence in selecting honest and solvent persons for agents.

But this provision of the policy is applicable only in cases of loss. And there being no analogous clause for the protection of the underwriter, in the absence of loss, against the insolvency of the broker, whose individual notes have been received for premiums on policies issued for the benefit of others, their only reliance is that derived from the principles of the common law.

It is well settled in this country that the acknowledgment clause whereby, as in these policies, the insurers " confess themselves paid the consideration due unto them, for the insurance, by the insured," is not conclusive evidence of the payment of the premium; but it has simply the same force...