Palm, Adm'r, v. The Medina Fire Ins. Co.

agent contracting on the part of the company has not power to issue a policy, the risk commences from the time of making such contract, if there be no stipulation to the contrary.

When a contract of insurance has been made with an agent, and the applicacation, with the deposit note, has been sent on to the office of the company from which the policy is to issue, the company are liable, although the loss occurs before the arrival of the letter containing the application.

If the contract between the agent and the person applying for insurance be fair and strictly in accordance with the rules of the company, such liability will exist, although there be printed on the blank application the qualification that the policy will issue "if approved" by the company. Such qualification only saves the company the right to object to an unfair or improper contract.

THIS is a bill in chancery, reserved in Summit county.

The principal facts in the case are stated in the opinion of the

court.

The pamphlet, "By-Laws, Instructions to Agents, and Charter of the Insurance Company," contains, in addition to the provisions referred to in the opinion of the court, and besides others, the following circular to agents:

"SIR: The Directors of the Medina County Mutual Fire Insurance Company wish you to act as agent of this society. The duties of such agency are, to ascertain the value of property to be insured, the amount of risk, surveying, measuring, and making plan of building, and ascertaining the loss incurred in case of fire."

"In all cases the applicant should describe the property to *be insured, and sign the description and application, as it [530 forms an important part of the contract of insurance; for which purpose the necessary blank forms, and this circular of instructions, will be furnished.

"As to the regulation of premiums or rates, no schedule can be given which will dispense with the exercise of a sound discretion. on your part. The classes of hazards and schedules furnished you contain the rates of premium on the several kinds of property and trades, subject to the ordinary risks and exposures. But these are to be varied according to the increase of the risk attending the property insured, and the risk may be so unusually great as to prevent an insurance at all.

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Palm, Adm'r, v. The Medina Fire Ins. Co.

"The rates herewith are estimated without regard to collateral or external danger.

"A brick building, with slated roof, would not be so much exposed at forty feet distance, as a wooden one of the same size at eighty feet; so that much depends, after all the directions that can be given, upon your own judgment as to the increase of pre

miums.

"You will fix such rates of premium as you shall deem just and proper, fill up and take a note therefor, and receive and indorse on the back thereof, the three per cent. which you may forward from time to time, together with the fifty cents received for each policy, not less frequently than quarterly, or when ordered by the

treasurer.

"You need not number the application nor note, and leave the day of the month in note blank. Let the indorsement be as follaws on the back: Received at date, one dollar' (or such sum as may be paid).

"We trust you will use your best exertions to explain the principles upon which the company is formed, and to advance its interest in your town and vicinity.

"It is requested that the advertisements furnished you should be posted up in public places in your vicinity.

531]

*BY-LAWS.

"And the rates of insurance on all buildings differently situated, to be in proportion as agents shall think the situation and hazard require, not exceeding twenty-five per cent. on the amount insured for the deposit or premium note.

"Such buildings and goods as are particularly extra-hazardous, may be insured at the discretion of the board of directors, and not otherwise; and all such classes as are not named, may be insured at such rates as the board of directors may determine after application is made, and coming within the provisions of the act of incorporation.

"Three per cent. of the premium note shall be paid and indorsed thereon at the time of making application, one dollar for each survey and application, and fifty cents for each policy, and recording the same by the person receiving it.

"The general agent shall be authorized to appoint such agents to act for this company as he shall deem necessary, and take from each agent, so appointed, a bond, with security to the directors of

Palm, Adm'r, v. The Medina Fire Ins. Co.

said company, in the sum of $1,000, previously to acting as such agent."

The premium note given by Bollmeyer, was as follows: "$78. For value received in Policy, No., dated the day of, 1846, issued by the Medina County Mutual Fire Insurance Company, I promise to pay said company, or their treasurer for the time being, the sum of $78, in such portions, and at such time or times, as the directors of said company may, agreeably to their act of incorporation, require.

(Signed,)

"Dated, May, 1846."

The property to be insured, described in Bollmeyer's application, was not of the class designated particularly extra-hazardous. The secretary of the company testified, that if a policy had been made on Bollmeyer's application, it would have been dated, and taken effect at noon on the day the application *was re- [532 ceived at the office of the company, in Medina, which was after the fire; the general practice of the company having been, to date policies the day the applications are received at the office, to take effect at noon on that day, unless the time for the date of the policy in the premium note had been filled up by the agents for the policy to date a different date.

R. P. RANNEY, for complainant:

The sole ground of refusal to issue the policy, and pay the loss, was stated upon the single point, that the application did not reach Medina until after the fire.

compel the issuing of the What, then, constitutes a same circumstances that The minds of the parties

The applicant had done everything on his part to entitle him to a policy. If the contract of insurance was completed before the loss, a court of equity has power to policy, and the adjustment of the loss. contract for insurance? I answer, the will make a contract in any other case, must assent in person, or through agents. It may require more to be done to clothe it with the necessary legal forms, but the contract is back of, and precedes the mere final written evidence of the contract. Is the policy the contract? No; it is only evidence of it. If the policy were the contract, there never could be such a thing as a bill to enforce the specific performance of the contract by the delivery of the policy. The charter of the com

Palm, Adm'r, v. The Medina Fire Ins. Co.

pany contemplates that membership, with all the rights and obligations growing out of it, may exist before the policy issues.

Section 5 provides, "That every person who shall become a member of said company, by effecting insurance therein, shall, before he receives his policy, deposit his promissory note for such a sum of money," etc.

Section 6 provides, that "every member" shall pay his share of all losses; and section 7, that "every member" shall be entitled to indemnity for losses. The policies that issue are all in 533] *the past tense, and recite that the insured has become a member of the company, and obligated himself to pay the note, etc.

In this case, the facts show that the contract was complete. The only cases in which the directors reserve the right to determine on making the contract and fixing rates, is as to property "particularly extra-hazardous"-in all other cases, by the rules and intructions of the company, their agents make the contract. Take all the instructions and by-laws together, and they amount to a standing offer to the public to insure any one upon the terms specified in the offer. When any one accepts those terms with the assent of the agent, it is an acceptance of the offer of the company, and constitutes a contract.

The only control which the company retained in their own hands, was the same that every principal does over the contract of his agent, to see that it conforms to his instructions. If it does, he can not repudiate it; if not, he may.

But there is printed on the application these words:

"All policies of insurance are issued from the office of the company, at Medina, upon applications sent in by agents and others; and, if approved, will bear the date of the reception of said application, unless requested by the applicant to bear date of some future day. It will be the duty of agents to make out the applications of persons who may apply to them for insurance in the company, and forward them per mail, or otherwise, to the office of the company."

This is merely printed on the back of the application.

Now, it is evident that these are not the rules or by-laws of the company, but are intended as a condensed summary of the sub. stance of their regulations, put in small space to be more generally circulated; and it is further evident that the clause relied upon by

Palm, Adm'r, v. The Medina Fire Ins. Co.

the defendant is an abridgment of the very by-law upon which I rely, and should receive the same construction. A reception by an authorized agent is a reception by the company:

WILLIAM H. CANFIELD and WHITMAN MEAD, for defendants:

*It is insisted by defendants that the agent at Warren [534 had no authority to make any contract, but that the application was made by Bollmeyer and received by the agent of the company, to be forwarded to the office of the company, to be there approved or disapproved; and if approved, a policy to issue thereon, to take effect from the time it should be received at the office.

This was the almost invariable rule of the company, known to Bollmeyer both by the notice printed on the application, and by having been previously insured under two different policies, both dated, and to take effect at the time they reached the office of the company, and not at the date of the application.

McConnell, the agent at Warren, testifies that he had no power to bind the company, and frequently, and always when interrogated as to his power, said, that policies could not issue until approved by the directors of the company.

There is no proof that ever Bollmeyer had notice of the by-laws in relation to the date of policies, but he had notice of what was printed on his application, as he must have seen it. If he would avail himself of a contract, he must show that the company had given power to the agent to contract, and that the agent did contract; which has not been done. The application was a mere proposition, and if a policy had issued, it could not have taken effect earlier than the 2d or 3d day of June, after the fire. If the policy had issued, dated at the date of the application, and Bollmeyer had been required to pay an assessment on his premium note, to meet losses before the application and note were received at the office, but after the date of the application, what would be the language of the complainant, in defense of a suit brought by the company for the collection of such an assessment? He would point, in emphatic language, to the notice printed on the application-that policies should date and take effect at the time the application was received at the office. He would point to the general practice of the company, and to his two prior policies, and thus be relieved from liability. (1) This case is unlike the case of Perkins v. The Washington Ins. Co., 6 Johns. Ch. 485.

[535

(1) Suydam v. Columbus Ins. Co., 18 Ohio, 459; Neville v. Cincinnati Ins. Co., 19 Ohio, 452.