Summary
In Citizens' Fire Ins. Co. v. Swartz, 21 Misc. 671, 47 N.Y.S. 1107, on a state of facts practically identical with those above stated, it was held that the broker was the agent of the insured only, and that payment to him did not estop the insurance company from recovering the premiums from the insured.
Summary of this case from Graves, Etc., Inc., v. Lumber Co.Opinion
November, 1897.
J.S. Galland, for appellant.
Purdy Squire, for respondent.
The action is to recover the premium upon a policy of fire insurance issued by the plaintiff to the defendant, November 22, 1895, and having one year to run.
The parties agreed in the court below upon the following facts:
That the policy was the New York standard form (Laws 1886, chap. 488; Richards on Ins. [2d ed.] 584), containing the usual agency clause that "In any matter relating to this insurance no person unless duly authorized in writing shall be deemed the agent of the company;" that the insurance was negotiated between the parties by one James M. Lezynsky, an insurance broker, who procured the policy from the plaintiff and delivered it to the defendant on or about its date; that the premium was $22.50; that on January 16, 1896, the defendant paid Lezynsky the amount of the premium, and that the latter failed to turn it over to the plaintiff; that in August, 1896, Lezynsky disappeared, and has not since been heard from, and the plaintiff made no demand on the defendant for the premium until September 14, 1896.
The question is, whether these facts establish a payment of the premium to the plaintiff or estop it from a recovery therefor against the defendant.
There are cases in which it is not easy to determine whether an agent is authorized to receive payment, and in all such instances the party who is to pay the money is required to see that the payment is made to one authorized to receive it. 1 Wait Act. Def. 283.
There is nothing to show that Lezynsky was an agent of the plaintiff, save the single fact that the latter intrusted him with the possession of the policy to deliver to the defendant. The defendant did not pay Lezynsky at the time of the delivery of the policy, but about two months afterward. If Lezynsky was the special agent of the plaintiff to deliver the policy, such agency terminated with the delivery, and if any payment was thereafter made it should have been to the plaintiff. An agency to deliver does not always but sometimes may imply the power to collect, and the extent of the authority must in each instance be determined by the peculiar circumstances of the case and the relation existing between the parties.
It does not appear that Lezynsky ever had any other transaction with the plaintiff, that it had ever requested him to solicit insurance, paid or promised to pay him a commission, or had any acquaintance with him further than that arising from the negotiation concerning this one policy of insurance.
Insurance on vessels is often if not ordinarily effected by brokers for and on account of the owners; and these brokers have accounts and a course of dealing both with the underwriters and the insured. Sheldon v. Atlantic F. M. Ins. Co., 26 N.Y. at p. 463. In such cases the broker is, as stated in Ewells Evans' Agency (p. 6) "agent for the insured, first in effecting the policy, and in everything that has been done in consequence of it; then he is agent for the underwriter as to the premium;" but all this results from the course of dealing between the parties, because in accordance with their evident intention.
In one of the cases cited by the appellant (Greenwich Ins. Co. v. Union Dredging Co., 14 Daly, 237) Larremore, C.J., speaking for the court, said (at p. 239): "I assent to the well-established rule, supported by a long line of authorities, that in the absence of any extrinsic proof the broker is held to be the agent of the assured. But this case presents some facts from which the court below, in view of other dealings of like character between the plaintiff and the brokers, might infer a special agency to collect premiums." In that case it appeared that the plaintiff kept an account with the brokers in which the premiums on policies procured were charged to them, from which it was manifest that credit was given directly to the brokers and not to the insured.
When Lezynsky called upon the defendant two months after the delivery of the policy for the premium he had no indicia of authority for receiving the money, which ought to have been paid before that time directly to the plaintiff. The defendant failed to exercise any care whatever in respect to ascertaining the authority of Lezynsky to act for the defendant. Wharton on Agency, § 137. It was at most special, and the defendant was bound to ascertain the extent of it. Story on Agency, § 126.
The defendant claims that the plaintiff was bound to make a demand on him before Lezynsky disappeared. We think not. The plaintiff did not know that the defendant had paid the money to Lezynsky, so that the duty of disavowing his authority was not imposed on it. The facts would apparently justify the inference that the plaintiff had extended a credit to the defendant for the premium, and it was bound to take affirmative action only in case it elected to cancel the policy for nonpayment of the premium. O'Brien v. Prudential Ins. Co., 12 Misc. 127.
When a party is under a duty to speak, or when his failure to speak is inconsistent with honest dealings and misleads another, then his silence may be deemed an acquiescence and create an estoppel. More v. N.Y.B.F.I. Co., 130 N.Y. at p. 545. There is nothing in this case showing any neglect of duty on the part of the plaintiff to justify the application of such doctrine.
If the policy had contained a clause acknowledging the receipt of the premium it might be argued that it should be deemed equivalent to an ordinary receipt for money, and thus have given implied authority to collect the premium. See Lebanon M. Ins. Co. v. Erb, 112 Penn. St. 149. But the policy in suit contains no such provision.
Some of the reported cases speak of payments of premiums to agents as binding on the company; but they evidently do not include within the word "agents," mere intermediaries or brokers, and they are for that reason inapplicable.
If Lezynsky while in possession of the policy had demanded and received payment of the premium as a condition of delivering the policy there might be some reason for connecting the act with the special agency or implied authority, if there was such; but there is no such evidence before us. Indeed from the agreed facts it is fair to assume that from the beginning to the end Lezynsky was the solicitor and agent of the defendant, selected by him to do the acts which he performed, and that the payment made to him was but another mark of defendant's confidence in his fidelity.
At all events the justice was warranted in finding upon the agreed facts that there was no payment of the premium to the plaintiff or to anyone authorized by it to receive such payment.
Our attention has been called to Wilber v. W.C.F. Ins. Co., 122 N.Y. 439, but in that case, as in Rohrbach v. Germania F. Ins. Co., 62 id. 47, and Alexander v. Germania F. Ins. Co., 66 id. 464, there was a special provision, not found in this policy, that "If any broker or other person than the assured have procured this policy, or any renewal thereof, or any indorsement thereon, he shall be deemed to be the agent of the assured and not of this company in any transaction relating to the insurance." We do not, therefore, rely on those cases in reaching a result. Nor is it necessary for us in this instance to decide what effect should be given to the agency clause in the policy in suit, for apart from it we fail to discover any ground for interfering with the judgment, which must be affirmed, with costs.
DALY, P.J., and BISCHOFF, J., concur.
Judgment affirmed, with costs.