APPEAL by the plaintiffs, Seelye Benedict and others, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of New York on the 8th day of March, 1911, upon the verdict of a jury, and also from an order entered in said clerk's office on the 2d day of March, 1911, denying the plaintiffs' motion for a new trial made upon the minutes.
George A. Strong, for the appellants.
Frederick J. Moses, for the respondent.
The plaintiffs appeal from a judgment entered upon the verdict of a jury and from an order denying a motion for a new trial. The action is upon a policy of fire insurance. There is no substantial dispute as to the facts.
The plaintiffs were the insurance brokers for the National Wire-Bound Box Company, having entire charge of and full authority concerning the insurance business of that company. Among other duties, in case of cancellation of policies, they replaced the policies or arranged for their replacement without specific instructions from the box company as to the companies with whom the insurance was to be placed. They now sue as assignees of the box company. In April, 1909, having occasion to place insurance to the amount of $5,475 for the box company, plaintiffs wrote to the firm of Goodrich, Dobie & Dell, insurance brokers of Norfolk, Va. (where the property to be insured was located), asking them to place the insurance. Mr. Dobie,
one of the firm, accordingly took out two policies, one for $2,975 in the Virginia Fire and Marine Insurance Company, and one for $2,500 in the Phenix Insurance Company, and sent the policies to plaintiffs in New York. A few days later (just when does not appear) the agent of the Phenix Company notified Mr. Dobie that his company wished to cancel its policy. Dobie, therefore, applied to Barry, Osborne & Co., defendant's Norfolk agents, for a policy to replace the Phenix policy. It was testified to and not disputed that when Dobie applied to Barry, Osborne & Co. for the insurance he told them that the reason he wanted the policy was that one of the companies which had insured the property had ordered its risk canceled, and, consequently, that he was short $2,500 on the insurance. Barry, Osborne & Co. accepted the insurance on behalf of defendant and on the same day, April 30, 1909, issued the policy which is the subject of this action. On the same day Dobie sent the policy to plaintiffs, together with a letter stating that it was offered in place of the policy previously issued by the Phenix Insurance Company, which plaintiffs were requested to return for cancellation. On that same night the insured property was destroyed by fire, and a notice thereof sent to plaintiffs, who must have received it at the same time or very near the same time that defendant's policy was received by them. Plaintiffs immediately wrote to Messrs. Barry, Osborne & Co., representing defendant, and Messrs. Goodrich, Dobie & Dell, making it quite clear that they claimed only $5,475 under all the policies, of which $2,975 was covered by the Virginia Company. As to whether the remaining $2,500 should be paid by the Phenix Company or defendant, the plaintiffs did not then assume to decide, preferring to leave it to the companies to adjust the matter between themselves. Plaintiffs also caused the proper amount of premiums to be tendered to defendant, which was refused. The Virginia Company having paid its proportion of the loss, and the Phenix Company and defendant having both refused to pay, plaintiffs bring this suit.
Besides the formal denials designed to put plaintiffs to their proofs the answer contains three separate defenses, to wit: (1) That there was a breach of the covenant as to the amount of insurance upon the property in that there was already
$5,475 of insurance upon the property when the defendant's policy was issued. (2) That there was a misrepresentation as to the amount of insurance upon the property at the time the defendant's policy was applied for. (3) That in applying for defendant's policy Mr. Dobie, plaintiffs' agent, intended to substitute defendant's policy for the Phenix policy, but that he exceeded his authority in attempting to do so. The second defense was clearly negatived by the evidence. Whatever may be the legal effect of the transactions between the parties, there was no misrepresentation, for defendant's agents were distinctly informed when the policy was applied for that it was wanted to replace a policy which was to be canceled. As to Dobie's authority to substitute policies we think there can be no doubt, especially as his actions in that regard were subsequently ratified by plaintiffs. The plaintiffs' manager testified that he had written the initial letter to Goodrich, Dobie & Dell asking them to place the insurance to the extent of $5,475; that he then knew that under the custom of insurance agents in Virginia, under the authority given by that letter, the agents to whom it was addressed would attend to replacing, by policies in other companies, any policies which they had negotiated which might be canceled. This clearly implies that plaintiffs understood and agreed, when they authorized Mr. Dobie's firm to place the insurance, that they also authorized that firm to replace any policies that might be canceled. Further than this, the plaintiffs were prompt to ratify, if ratification was necessary, Dobie's act in substituting defendant's policy for that of the Phenix Company. 'It is laid down in broad terms that one may, in his own name, insure the property of another for the benefit of the owner without his previous authority or sanction, and that it will inure to the benefit of the owner upon a subsequent adoption of it, even after a loss has occurred.' (Waring v. Indemnity Fire Ins. Co., 45 N.Y. 606, 611; Herkimer v. Rice, 27 id. 163, 179.) It is true that the Phenix Company had not given the formal notice of cancellation provided for in the standard form of policy, but that is unimportant. If Dobie had authority to substitute and replace, he likewise had authority to consent to cancellation, and plaintiffs' acceptance of defendant's policy in substitution for that of the Phenix Company
indicated its acquiescence in the cancellation of the policy of the latter company. Defendant refers us to Hermann v. Niagara Fire Ins. Co. (100 N.Y. 411) and Partridge v. Milwaukee M. Ins. Co. (13 A.D. 519) as authority for its contention that Dobie's authority was exhausted when he had originally placed the insurance, and that he had thereafter no authority to consent to a cancellation or to replace a policy which had been canceled. Neither of these cases fits the facts of the present case because in both the assured ...