Grace v. American Centural Insurance Company of St. Louis

This is an action upon a policy of fire insurance issued September 26, 1877, by the American Central Insurance Company of St. Louis to the firm of William R. Grace & Co. The circumstances under which it was issued are these: A clerk of William R. Grace & Co., charged with the duty of effecting insurance against loss by fire upon their property, employed one W. R. Moyes, a broker in the city of New York, to obtain insurance, in a specified amount, for his principals. Moyes instructed one Anthony, an insurance broker and agent in Brooklyn, who had on previous occasions obtained policies for Grace & Co., to procure the required amount of insurance. Anthony obtained the policy in suit from the general agents in New York city of the defendant company, mailed or delivered it to Moyes, and by the latter it was delivered to Grace & Co. not later than the day succeeding its date. On the morning of October 6th one Carrol, for the insurance company, verbally notified Anthony that the company refused to carry the risk and required the policy to be returned. There is some conflict in the testimony as to what occurred between Carrol and Anthony on this occasion. But, in the view which the court takes of this case, it may be conceded that Anthony gave Carrol to understand that the policy would be returned to the company or its agents. The property insured was destroyed by fire on the night of October 6, 1877, or early on the morning of the 7th. Prior totthe gire neither of the 7th. Prior to the fire neither by whose instructions the policy was obtained, had any knowledge or notice of the conversation between Carrol and Anthony, or of the fact that the company had elected not to carry the risk. At the trial it was admitted that the contract between the parties was fully executed upon the delivery of the policy to the insured.

The eighth clause of the policy is in these words:

'This insurance may be terminated at any time at the request     of the assured, in which case the company shall retain only      the customary short rates for the time the policy has been in      force. The insurance may also be terminated at any time at     the option of the company, on giving notice to that effect      and refunding a ratable proportion of the premium for the      unexpired term of the policy. It is a part of this contract     that any person other than the assured, who may have procured      the insurance to be taken by this company, shall be deemed to      be the agent of the assured named in this policy, and not of this company, under any      circumstances whatever, or in any transaction relating to      this insurance.'

The court refused, although so requested by plaintiffs, to rule that Anthony was not, within the meaning of the policy, their agent for the purpose of receiving notice of its termination; but charged the jury, in substance, that Anthony was, for such purpose, to be deemed the agent of the insured. Exception was taken in proper form by plaintiffs, as well to the refusal to give their instruction, as to that given by the court to the jury. A verdict was returned for the company, and judgment thereon was entered.

Mr. Winchester Britton, for the plaintiffs in error.

[Argument of Counsel from 280-281 intentionally omitted]

Mr. JUSTICE HARLAN delivered the opinion of the court. After stating the facts in the above language, he said: