White v. Insurance Co. of New York
| Decision Date | 06 March 1899 |
| Parties | WHITE et al v. INSURANCE CO. OF NEW YORK. SAME v. GERMAN ALLIANCE INS. CO. |
| Court | U.S. District Court — District of Rhode Island |
F. W Tillinghast and W. G. Roelker, for plaintiffs.
E. S Mansfield, J. M. Ripley, and J. Henshaw, for defendants.
These are actions on fire policies, and were heard upon evidence jury trial being waived. Before the loss, the broker who had placed the policies in suit was notified that the defendants desired to cancel the policies. Thereupon the broker contracted for new insurance to replace the old, and notified the defendants' agents thereof. The new policies were issued by other companies before the loss, but were in the mails at the time of the fire, and had not reached the broker or the plaintiffs. The old policies, now in suit, were in the possession of the plaintiffs at the time of the fire. The plaintiffs claim that the policies in suit were in force at the date of the fire, for the reason that no effective notice of cancellation had reached the plaintiffs before the loss. They claim-- First, that, at the time of loss, both the original policies and the new policies were in force, and that the liability of the defendants is to contribute to a loss of $83,000 on the basis of a total of $127,000 of insurance; second, that if both sets of policies were not in force and if the total insurance was but $100,000, the defendants are liable to contribute on that basis to a loss of $83,000. It is agreed that the loss on the property was $83,000.
We will first consider whether both sets of policies were in force at the time of loss. We think that it will appear that, though there may be some difficulty in determining which set of policies shall bear the loss, there is little difficulty in determining that one set of policies only was in force, and not both sets.
The insurance broker, Tillinghast, was authorized to place insurance upon the plaintiffs' mill property to the amount of $40,000. It is undisputed that he had no authority to exceed this amount. It is also clearly established by the evidence that no act of Tillinghast's was ratified with any intention of increasing the gross amount of insurance. It is agreed that, there being $60,000 previous insurance, Tillinghast was employed to increase the amount to $100,000. In the plaintiff's brief it is said:
'It is true that the parties had not intended that there should have been more than $100,000 in all on the property, but they had not carried their intentions into legal effect, as they had not taken the proper steps to cancel the policies before the new ones were issued.'
The error of the argument advanced to prove the existence of $127,000 of insurance, in violation of the plaintiffs' instructions and of the acknowledged intent, lies in attempting to separate into two parts what was intended as a single transaction. What Tillinghast assumed to do on behalf of the plaintiff was to substitute insurance. To effect a substitution, and also to keep within his authority to maintain insurance to the amount of $40,000, it was essential that Tillinghast should perform two acts which were related and complimentary parts of the single complete transaction of substitution. If he took out new insurance without canceling old, or if he canceled old insurance without taking out new, he violated his instructions, and failed to maintain $40,000 insurance.
The only other possible construction for the plaintiffs on this branch of the case is that though Tillinghast exceeded his original authority, by taking out $27,000 additional insurance, this was subsequently ratified by the plaintiffs. The complete answer to this is that the plaintiff Oscar H White, on the witness stand, expressly disclaimed doing so; and there is abundant evidence in his letter to C. B. Shove, dated October 19, 1897, and in...
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