Insurance Company v. Webster - 73 U.S. 129 (1867)
U.S. Supreme Court
Insurance Company v. Webster, 73 U.S. 6 Wall. 129 129 (1867)
Insurance Company v. Webster
73 U.S. (6 Wall.) 129
Where the agent of an insurance company was fully authorized to make insurance of vessels, and had, in fact, on a previous occasion, insured the same vessel for the same applicant, and in the instance under consideration actually delivered to him, on receipt of the premium note, a policy duly executed by the officers of the company, filled up and countersigned by himself under his general authority and having every element of a perfect and valid contract, the fact that after the execution and delivery of the policy the party insured signed a memorandum thus, "The insurance on this application to take effect when approved by E.P.D., general agent," &c., does not make the previous transaction a nullity until approved. Hence, though the general agent sent back the application directing the agent who had delivered the policy to return to the party insured his premium note and cancel the policy, the party insured was held entitled to recover for a loss, the agent having neither returned the note nor cancelled the policy.
One Webber, on the 25th of September, 1860, was and for a long time had been the agent of the AEtna Insurance Company at East Saginaw in Michigan, and was duly authorized to make insurances, by policies of the company countersigned by himself, against loss by the perils of inland navigation.
To facilitate the making of such insurances with promptitude, the agent was furnished with blank policies duly signed by the president and secretary of the company, and requiring nothing to make them obligatory contracts except to be filled up and countersigned by him.
These things being so, a certain Webster applied, on the 25th of September, 1860, to Webber for insurance on the schooner Ottoca for the residue of the current season of navigation. And thereupon Webber filled up, countersigned, and delivered to Webster a policy of insurance duly executed by the president and secretary of the company, by which seventeen hundred and thirty-three dollars were insured upon the Ottoca from that day (September 25, 1860)
to the 30th of November, 1860. Webster, on his part, paid the premium by an endorsed note in the usual mode.
The same schooner had previously, in 1858, been insured in like manner on the application of Webster in the same company through the same agent.
On the 25th of October, 1860, the schooner was wrecked and became a total loss from perils covered by the policy, and notice of the wreck and loss was duly given to the insurance company.
Such was the substance of the proof on the part of the plaintiff below.
On the part of the defendant, it was proved that immediately after the delivery of the policy by Webber to Webster, a paper, partly written and partly printed, and called an application, was signed by the latter at the request of the former. This paper contained a general statement of the substance of the transaction, and was also signed by Webber. Following the signatures appeared this printed memorandum:
"The insurance on this application is to take effect when approved by E. P. Dorr, general agent of the AEtna Insurance Company, at Buffalo, New York."
This paper was immediately transmitted by Webber to Dorr, was received on the 29th of September, but the application did not receive his approval, and was sent back to Webber with a letter directing him to return to Webster the premium note received, and to cancel the policy. This letter was received by Webber on the 2d of October.
It also appeared from the evidence that Webber, apparently dissatisfied, wrote to Bennett, another general agent at Cincinnati, on the subject, and seems to have expressed in his letter some apprehension that the course directed by Dorr would "earn for the company the reputation of backing out from contracts regularly made." No attempt was made to cancel the policy, nor was the premium returned, nor was any notice given to Webster of the action of the
general agent until after the loss, when Webster called to give notice of it to the company.
Then, for the first time, Webber informed him that his application for insurance had been rejected and offered to return the premium note, which Webster declined to receive, and insisted on his contract. The company declining to pay, Webster brought suit against them, and under instructions given by the court and excepted to by the company, verdict and judgment were given for the plaintiff. The Insurance Company then sued out this writ of error.