Mowry v. The World Mutual Life Insurance Co.

392; Chase v. Hamilton Ins. Co., 20 N. Y. 52; Shaft v. Phoenix, etc., Ins. Co., 8 Hun, 632; Rowley v. Empire Ins. Co., 4 Abb. Ct. of App. Dec. 131.) It is evident that if such agency existed, an error or omission of Wm. T. Shepley, in filling up the application for insurance, would be the act of his principal.

The first alleged breach was the representation as to the business of the deceased, viz. :

Occupation-Please state definitely. "Ans.-Manufacturing."

Defendant contends that the falsity of this statement is shown by the fact that in February, 1868, the deceased kept a billiard saloon. But it was also shown that for years previous he had been engaged in manufacturing soda-water, and in pursuance of an agreement between himself and the plaintiff, dated February 4th, 1868, was about to resume the same business.

If the question had been "present occupation-please state definitely," the breach would have been undoubted; but the deceased may have understood the question as referring to his usual, and not his temporary occupation.

In the case of Dilleber v. The Home Life Insurance Co., in the Court of Appeals (69 N. Y. 256), Judge Earle says: "Fraud may be predicated upon the suppression of truth, but warranty must be based upon the affirmation of something not true." Besides, the answer, "manufacturing," conveyed no definite idea of the actual business of the applicant. Whether it was hazardous in its nature or no, appeared to be of little consequence to the insurer, for the answer was accepted without further inquiry. (Fitch v. American, etc., Ins. Co., 59 N. Y. 572.)

The alleged breach of warranty, as to the statement in relation to the intemperate and habitual use of alcoholic stimulants, was a question for the jury.

The remaining breach relied on, was that affecting the health of the insured, and the employment and consultation of a physician. The insured, to the question "Has the party had, during the last ten years, any sickness or dis

Mowry v. The World Mutual Life Insurance Co.

ease?" answered "No;" and to the question "Have you employed or consulted any physician, for yourself or your family-Please answer this yes or no." Ans.-"None for myself." The only testimony to support the breach of warranty, is that of Dr. Samuel Mowry, who testified: "By reference to my books, I find I gave N. H. Mowry advice and medicine on Dec. 21st, Dec. 26th, and Dec. 30th, in 1867."

There is no proof of any special sickness or disease, nor that the advice and medicine were for the personal benefit of the life-insured. It may have been, as the answer "none for myself" would imply, for a member of his family.

The defendant must be held to a strict construction of a warranty, the breach of which works a forfeiture. Dilleber v. Home Life Ins. Co. (supra), and cases cited. Another view is suggested at this point. If Shepley's agency for defendant be established, then before the alleged misrepresentation can be assigned as a breach, it must appear that the disputed question was directly asked and answered. Where is the evidence that Shepley interrogated the insured as to sickness and medical advice? The proof is that Shepley was in haste to go to Boston, and filled up the blank application after he arrived there. He did not ask any of the printed questions on the first page," but took a minute of every thing at the time. On his re-direct examination he is not positive about taking a minute.-"I might, in this case, being in a hurry, have neglected it."-Here is a wide margin for doubt as to his accuracy and carefulness in the transaction, and if the defendant has ratified the act, by accepting his services, it must not complain if it be estopped by his errors.

The case is one for a jury, upon the questions of agency and breach of warranty, and the judgment appealed from should be reversed and a new trial ordered, with costs to abide the event.

CHARLES P. DALY, Ch. J., and ROBINSON, J., concurred.

Judgment reversed, and a new trial ordered, with costs to abide event.

Westerfield v. Radde.

JOSEPH H. WESTERFIELD et al. Respondents, against WILLIAM RADDE et al. Appellants.

(Decided November 5th, 1877.)

The president of a manufacturing corporation, organized under the act of 1848, cannot lawfully bind it in the purchase of goods required in its business, when a resolution forbidding such act on his part exists, and appears on the books of the corporation, even if the seller of the goods had no notice of such resolution, unless through a well recognized general course of dealing such president has been permitted and held out by the corporation as possessed of authority to make such purchases.

APPEAL by the defendants from a judgment in favor of plaintiffs, entered upon a decision of the general term of the Marine Court of the city of New York, affirming a judgment entered upon a verdict in that court at a trial term.

The plaintiffs, Westerfield and others, brought this action against Radde and others, as trustees of the Paragon Match Company, a manufacturing corporation, organized under the general statute of this State of 1848, to recover of them the price of merchandise, alleged in the complaint to have been sold and delivered by plaintiffs to that corporation, on the ground of the failure of the trustees to file their annual report as required by statute.

The complaint alleged that plaintiffs had recovered judgment against the corporation for the price of the merchandise, and that an execution thereon had been returned unsatisfied.

On the trial, the plaintiff gave evidence that the merchandise was bought by the company through one Bock, a trustee and the president of the corporation, that a part were delivered and used by the company, and that Bock was authorized, by a resolution of the trustees, to buy the merchandise. This evidence was in part the testimony of Bock, who, however, testified that he remembered "the

Westerfield v. Radde.

transaction," because one of the members of plaintiffs' firm "refused to give credit to the company," and his testimony in other particulars was directly contradicted by the testimony of Radde. It was shown on the trial that one of the by-laws provided that no officer, trustee or employee of the company should have power to incur any debt to the charge of the company, unless he be so authorized by the board of trustees, by a resolution duly entered upon the minutes of the meeting of said board. It was also shown that at the first meeting of the trustees, May 4th, 1872, the following resolution was passed: "On motion it is ordered that the company do not cominence actual operations before the 1st day of June, 1872, or until an amount deemed sufficient for the successful commencement of operations shall be in the hands of the treasurer."

The court directed the jury to find a verdict for the plaintiff. The defendants excepted and asked the court to submit to the jury the question as to whether any, and as to how much of the merchandise had been delivered to the company. This request was refused, the court holding that the preponderance of evidence was so great that a verdict for defendants would be set aside.

The jury found a verdict for plaintiffs.

John A. Foster, for appellants.

Jno. P. Reed, jr., for respondents.

ROBINSON, J.-Plaintiffs sued the appellants, Radde & Koehler, and two others, as trustees of a corporation formed under the general manufacturing act of 1848, known as "The Paragon Match Company," for goods sold and delivered that company between May 29th and June 27th, 1872, by reason of the alleged failure of the company to make and publish the report required by the 12th section of that act. The company was organized in April, 1872, with seven trustees, including the two defendants. The by-laws prescribed that no officer, trustee or employee should have power to

Westerfield v. Radde.

incur any debt unless authorized by the board of trustees, by resolution entered in its minutes. The company was intended to succeed to the business of the firm of "Bock, Schneider & Co.," match manufacturers, whose assets and good will were purchased and were to be paid for, part in stock and part in cash derivable from sales of stock. It was also resolved by resolution passed May 4th, that the company should not commence actual operations before the 4th of May, 1872, nor until an amount deemed sufficient for the successful commencement of operations should be in the hands of the treasurer. The company was organized in June, and Mr. Bock, one of the trustees, was elected president. At a meeting held by five of the directors in the early part of December, 1872, all of them, including these defendants, resigned. The default charged, was for not making the report required by the act in January, 1873. The judge before whom the cause was tried, upon the proof tending to show a sale and delivery of the goods for which the action was brought upon the order of said Bock, held (against objection and exceptions) that the president of such a corporation could lawfully bind it in the purchase of goods required in its business, notwithstanding there was a resolution to the contrary on its books, unless the plaintiffs had notice of such resolution.

Bock, the president, had, as member of the firm of Bock, Schneider & Co., Bock, Genin & Co., and until such assumed organization, purchased goods of plaintiffs, and he expressly swore plaintiffs refused to give credit to the company. The refusal of the judge, therefore, to submit to the jury the question of the sale and delivery of the goods to the company, and as to the delivery of all the goods for which claim was made, was erroneous. The judge also erred in holding that the president of such a corporation" could lawfully bind it in the purchase of goods required in its business, notwithstanding a resolution to the contrary on its books, unless the plaintiffs had notice of such resolutions." As president he was but presiding officer of the board of trustees. The concerns of the company was to be managed