Opinion
June, 1897.
William C. Beecher, for appellant.
Charles Wehle, for respondents.
The action was brought upon a "Lloyds" fire insurance policy in which the defendant was one of several under writers, and upon this appeal two propositions were advanced by the appellant.
First. That the action cannot be maintained against this defendant, but that the action should have been brought against the firm of Beecher Company, the attorneys in fact, under the policy of insurance described in the complaint, for this defendant and all of the underwriters upon the said policy, and
Second. That no proofs of loss were served or notice sent to Beecher Company as required by the policy.
As to the first proposition it appears that originally the defendant Arthur White and William C. Beecher composed the firm of Beecher Company, and were the attorneys in fact of the several underwriters. Subsequently and before the issuance of the policy sued on in this action, both the defendant and William C. Beecher ceased to be the attorneys in fact for the underwriters, and one Henry B. Beecher and Vincent R. Schenk, under the firm name of Beecher Company, became the attorneys in fact for the underwriters.
Neither member of this firm was an underwriter, hence under the authority of Knorr v. Bates, 14 Misc. 501, this action is properly brought against this defendant.
In the case cited, the condition operated to prohibit the maintenance of any action against the underwriters, and left the insured to an action against the attorneys in fact who appeared to have no connection contractually with the underwriters' obligations, and against whom an action could not be maintained apparently.
We have read the case of Stieglitz v. Belding, Jr., 20 Misc. Rep. 297, decided by the Appellate Term, since the submission of this case, and we are of the opinion that that case is authority for applying to this case the rule laid down in Knorr v. Bates, supra.
As to the second proposition, the proofs show that after the issuance of the policy sued upon, some change took place among the membership of the underwriters, and that the office where the defendants conducted their business, and which was theretofore occupied by Beecher Company, became occupied by a firm known as Henry Edwards Company, advertising themselves as attorneys in fact for the Metropolitan Lloyds of New York city, and that at the time of the fire notice was telegraphed to Beecher Company, at this office, 44 Cedar street, New York, and in answer thereto they received a notice from Menken Brothers, attorneys-at-law for Henry Edwards Company, that their telegram to Beecher Company has been placed in their hands by Messrs. Henry Edwards Company, who are now the general managers and attorneys for the Metropolitan Fire Lloyds of this city.
Also that the loss was adjusted by an adjuster authorized by Henry Edwards Company, on behalf of the Metropolitan Lloyds.
The provision of the policy to the effect:
If fire occurred the insured shall give immediate notice of any loss thereby, in writing, to the attorneys of the underwriters * * * and within sixty days after the fire, shall render a statement of the loss, etc., and that the loss shall be payable sixty days thereafter, has reference to matters which occurred after the contract had been made and the loss had occurred and must be liberally construed in favor of the plaintiff.
After a fire had taken place, and liability fixed by a loss, the mode by which such loss is to be adjusted is by giving notice of the same to the insurer, and serving him with proofs of loss which means an uncorroborated, informal assertion of the party in interest, so that the company may be in a position to investigate the cause of the fire and amount of the loss, or take such steps to preserve the property if partially injured, and make salvage in reference thereto.
It is well settled that a liberal construction must be given to clauses in a policy of insurance in reference to procedure after a loss has accrued and the rights of the parties been fixed by the terms of the policy.
In McNally v. Phoenix Ins. Co., 137 N.Y. 398, the court said: "These conditions which relate to matters after the loss have, for their general object, to define the mode in which an accrued loss is to be established, adjusted and recovered, after the reciprocal rights and liabilities of the parties have become fixed by the terms of the contract, and are to receive a more liberal construction in favor of the insured. In determining the liability of the defendant it is entitled to the benefit of its contract fairly construed and can stand upon all of its stipulations. But when its liability has become fixed by the capital fact of a loss, within the range of the responsibility assumed in the contract, courts are reluctant to deprive the insured of the benefit of that liability by any narrow or technical construction of the conditions and stipulations which prescribe the formal requisites by means of which this accrued right is to be made liable for his indemnification. * * * A liberal and reasonable construction of the stipulations of the contract which prescribe the formal acts on the part of the insured, necessary to the recovery of the loss, is sanctioned and required by the rule of law."
In Wehle v. U.S. Accident Assn., 11 Misc. 36, the General Term of the Superior Court held: "That the conditions upon which the defense is based operate upon the contract of insurance subsequent to the fact of a loss, and must, therefore, receive a liberal and reasonable construction in favor of the insured under the contract."
The defendants, insurance Lloyds, by enabling Henry Edwards Company, to hold themselves out as the attorneys in fact for the subscribers, and by enabling them to receive the notice of the fire, and to answer the same, are, and must be held liable for the acts of the said Henry Edwards Company, and are estopped from denying that Henry Edwards Company were the attorneys for the defendant.
Assuming that it was error on the plaintiff's assignors to direct the proof of loss to Henry Edwards Company, that error was caused by the acts of the defendant's organization, and if one of the two parties are to suffer, it is the defendant, who, by its acts, caused the error.
It is a settled doctrine of law of agency in this state that where the principal has clothed his agent with power to do an act upon the existence of some extrinsic fact necessarily and peculiarly within the knowledge of the agent, and of the existence of which the act of executing the power is itself a representation, a third person dealing with such agent, in entire good faith, pursuant to the apparent power, may rely upon the representation, and the principal is estopped from denying its truth, to his prejudice.
The judgment appealed from should be affirmed, with costs.
CONLAN, J., concurs.
Judgment affirmed, with costs.