author: By the Court—Bosworth, Ch. J.

text:
    Samuel H. Hartshorne, Plaintiff and Appellant, v. The Union Mutual Insurance Company, Defendants and Respondents.
    The defendants, an Insurance Company located in New York, executed and delivered to J. Day & Co., of Apalachicola, Florida, a Marine Policy, being in form a Cargo Policy, numbered 784,) by which they in terms, “ on account of whom it may concern, to cover only property which may be indorsed hereon, by said J. Day & Co., loss, if any, payable to the parties named in the certificate granted by said J. Day & Co., and subject to conditions contained therein, and not inconsistent with .the terms of this Policy, do make insurance, * * lost or not lost, at and from ports and places to ports and places, on cotton,” &c. $250,000 was written on the margin of the Policy as the sum insured! With this Policy the defendants delivered to J. Day & Co. blank certificates, to be issued to persons who might contract for insurance under the Policy; which certificates state that the person named in them, respectively, is insured by the defendants; and they also delivered to J. Day & Co. a let,ter of instructions, which states, inter alia, that said certificates are each of them considered by the defendants “ as representing a Policy issued by the Company itself.”
    November 14. 1853, the defendants, by a written certificate of that daté, extended the sum insured'by Policy No. 784, an additional $250,000. On the 28th of October, 1853, the defendants issued a further policy, (numbered 993,) for $250,000 to J. Day & Co., in form like that numbered 784.
    J. Day & Co. pasted the Policy No.'784 in a large book, (called their Policy Book,) entered in it the substance of each certificate issued' by them, and the fact and date of issuing it, and also the aforesaid certificate of renewal of Policy No. 784, and the further Policy No. 993. The risks attaching during each month under the certificates, as these amounts were ascertained, were entered in said Policy Book, and numbered consecutively as entered, in a column in which specific risks were also entered and numbered as entered.
    On the 15th of November, 1852, J. Day & Co. issued to the plaintiff one of said certificates, indefinite as to amount, thereby insuring, under Policy No. 784, cotton to be shipped by persons, and at and from places named therein, consigned to the plaintiff. This certificate was renewed November 15, 1853, by an indorsement made thereon by J. Day & Co., (and entered in said Policy Book,) continuing the insurance until July 1, 1854. The cotton in question, which was covered by the terms and embraced within the insurance stipulated by the certificate issued to the plaintiff, was shipped on the 1st and 2d of February, 1854, and on the 3d was totally lost by the perils insured against. Early in February, 1854, it was ascertained that all risks taken from the commencement of the business, including specific risks, exceeded §750,000 in the aggregate prior to the time the cotton in question was shipped. This suit was brought to recover the value of the cotton shipped February 1 and 2, 1854, and the complaint was dismissed, on the grounds that J. Day & Oo. could not make valid contracts exceeding $750,000 in the aggregate, and that when the risks actually taken had reached that sum, all certificates of insurance previously issued became inoperative and void. On appeal it was held:

    1. That the certificate so issued to the plaintiff was the contract of the defendants, and obligatory from the time of its delivery.
    2. That such certificate covered the cotton in question.
    3. That, as between the plaintiff and third persons subsequently insured, whether insured under similar certificates issued, or upon specific risks taken subsequent to the issuing of the plaintiff's certificate, the plaintiff’s contract, being first in point of time, gives him priority of right, and that he is to be protected in preference to them, even if it be held that J. Day & Co. could not bind the defendants for sums exceeding $750,000 in the aggregate. That J. Day & Co. having, by the certificate issued to the plaintiff, insured all cotton described therein to be thereafter shipped to him, could not deprive him of the benefit of that insurance by subsequently insuring others.
    4. That, without deciding the question whether J. Day & Co. could make valid contracts of insurance for sums exceeding $750,000 in the aggregate, the judgment should be reversed and a new trial granted.
    (Before Bosworth, Ch. J., and Woodruff and Moncribf, J. J.)
    Heard, June 11;
    decided, December 31, 1859.
    This is an appeal by the plaintiff from a judgment dismissing his complaint. The action was tried before Mr. Justice Hoffman without a jury, in October, 1855. It is brought to recover for a total loss upon a contract of insurance’ alleged to have been made between the plaintiff and the defendants on the 15th of November, 1853, and which, by its terms, was to continue in force until July, 1854. The loss in question occurred early in February, 1854, and there is no question as to the fact of a loss or of its amount. The main question is, whether the property so lost was in fact insured by the defendants.
    The contract of insurance was made in Apalachicola, Florida, by J. Day & Oo., as agents of the defendants. The powers of J. Day & Oo., a firm doing business at Apalachicola, arose in this wise:
    The defendants executed and delivered to J. Day & Go., a Cargo Policy, (No. 784,) dated October 27, 1852, in favor of J. Day & Co. for $250,000, in terms, “ on account of whom it may concern, to cover only property which may be indorsed hereon by J. Day & Co., loss, if any, payable to the persons named in the certificates granted by said J. Day & Co., and subject to conditions contained therein, and not inconsistent with the terms of this Policy.”
    By the terms of this Policy, the defendants make insurance “ at and from ports and places to ports and places, on cotton,” * * and “ upon all kinds of lawful goods and merchandises laden or to be laden on board any good vessel or vessels, steamer or steamers,” &c. The premiums to be at the same rates as charged by other good companies or agencies, to be governed as near as may be by the tariff of premiums furnished with such Policy to J. Day & Co., “the premiums on risks to be fixed at the time of indorsement, and such clauses to apply, as the Company may insert, as the risks are successively reported.” An indorsement on the Policy declares that “this Policy is to be deemed continuous unless otherwise directed by either party, thirty days’ notice being given to the assured, to enable risks which had already attached previous to the receipt of notice by J. Day & Co. to terminate.”
    The defendants delivered with this Policy, to J. Day & Co., a letter of instructions and blank certificates, to be filled up by J. Day & Co., and to be delivered by them to persons whom they might agree to insure under the Policy. The Policy itself J. Day & Co. pasted in a book, in which book they entered, under correct dates, the fact of their having granted insurance and certificates to the several persons with whom they subsequently made contracts of insurance.
    On' the 15th of November, 1852, the plaintiff applied to J. Day & Co., as such agents, for insurance, and J. Day & Co. signed and delivered to him one of the certificates, and at the same time indorsed on Policy (No. 784) by entering in the book in which it was pasted, the following, viz.:
    “ Certificate granted to S. H. Hartshorne to cover all cotton shipped per good steamboats, from points on the Chattahoochee river, by or for account of the following parties, and consigned to S. H. Hartshorne, valuation per bale annexed to each name. Eire risk at Apalachicola three days after landing.”

      Then follow the names of ten persons or firms who were to so ship cotton, and against the name of each of said persons was the name of the place from which he was to ship and the agreed valuation of each bale he might ship.
    Having made this indorsement on the Policy, J. Day & Co. filled up and signed one of the blank certificates furnished to them by the defendants, and delivered it to the plaintiff. It is in these words:
    “UNION MUTUAL INSURANCE COMPANY OP N. Y.
    “ E. S. Lathrop, President.
    “Jno. S. Tappan, Vice-President.
    “Ferdinand Stagg, Secretary.
    “ Certificate No. 1.
    “Apalachicola, Nov. 15, 1852.
    “Entered this day on Policy No. 784, issued by the Union Mutual Insurance Company, of the city of New York, sundry amounts, per endorsements made in books accompanying this certificate, by J. Day & Co., on account of sundry persons whose n'ames appear on book, payable in case of loss to S. H. Hartshorne, on cotton shipped per good steamboats from points on the Chattahoochee river to Apalachicola, and consigned to S. H. Hartshorne, valued at, per indorsements made in book by J. Day
    & Co., on board the ....,____master, at and from .... to----;
    time of sailing____; bills of lading dated ... The said S. H.
    Hartshorne, therefore, is insured by the said Union Mutual Insurance Company, lost or not lost, for the said sum of, per indorsement, dollars as above.
    “ Binding. J. Day & Co.”
    In the letter of instructions accompanying the Policy and certificates, when delivered to J. Day & Co., the defendants say: “ These Policies are granted in the form presented, for the purpose of enabling you to take risks for other parties under the same, and the certificates are to be used as evidence for the assured that the risks described by them are covered by the Policy in your hands, and are considered by us, in fact, as representing a Policy issued by the Company itself, subject to all the conditions of the same, and in case of loss, payable in like manner.”

      According to the course of business, the plaintiff’s consignors of cotton shipped it on steamers at the points on the Chattahoochee river named in the certificate, consigned to him; and as a generál thing information of the fact of shipment could not be received by the plaintiff before the arrival of the cotton, as the same steamer which carried the cotton, also carried the mail containing advices of the shipment.
    The certificate granted to the plaintiff was pasted in a small book which he kept, and as each cargo arrived, he entered in this book the date of such arrival, the quantity, and by whom shipped; and at the end of each month presented this book to J. Day & Co., whereupon the amount payable for premiums was ascertained and then or soon thereafter paid. The amount of property thus ascertained to have been at risk during the month, was then efitered by J. Day & Co., as of that date in their Policy Book, that is, in the book in which Policy (No. 784) was pasted.
    This course was pursued with respect to every person to whom J. Day & Co. issued one of these certificates. And these certificates were treated as open and continuing Policies, covering all goods shipped thereafter, from time to time, answering the description contained in the certificates. J. Day & Co. also took specific risks, and these were entered in their said Policy Book under the dates when they were respectively taken.
    By the 14th of February, 1853, it was ascertained that $250,-000, in the aggregate, had been at risk under Policy (No. 784,) and the defendants sent to J. Day & Co. a paper reading thus:
    “MARINE.
    “ Office of the Union Mutual Insurance Company.
    , . “ New York, February 14, 1853.
    “An additional sum of $250,000 is hereby granted upon' Policy No. 784, issued to J.. Day & Co., of Apalachicola, subject to the same terms and conditions as the original insurance under our letter of instructions.
    “ Jno. S. Tappan, Vice-Pres't.

    “ Ferdinand Stagg,. Séc'y."

    J. Day & Co. pasted this renewal in their said Policy Book, and continued the business of insuring as before..

      On the 28th of October, 1853, the defendants issued and delivered to J. Day & Co. a Cargo Policy (numbered 993) for $250,-000, in the same form as the first, delivered it to one of the firm then in New York, .who took it to Apalachicola, arriving there about the 20th of November. The fact of its having been issued was communicated by letter, which reached Apalachicola at an earlier date. The Policy was pasted in the same book as the first, and J. Day continued to insure as before.
    On the 15th of November, 1853, J. Day & Co. indorsed on the plaintiff’s said certificate (of November 15,1852,) as follows:
    “ The foregoing Policy is hereby renewed to cover all cottons as per the body of the Policy from the 15th of November, 1853, to 1st July, 1854.
    “J. Day & Co.
    “ Apalachicola, 15 Nov., 1853.
    “ See parties’ names in book annexed.”
    At the same date they entered in their Policy Book the fact of having granted this renewal.
    Early in February, 1854, it was ascertained that all the property which had been at risk from the commencement of the business, under the certificates which had been granted, including the specific risks taken, exceeded $750,000; the aggregate sum named in the two Policies and the extension of the first. The cotton in question was shipped on the 1st and 2d of February, 1854, on the steamer Alabama, and on the 3d the vessel and cargo were wholly consumed by fire.. It is to recover for that cotton, that this action is brought.
    The defendants insist that J. Day & Co. had no power to make them insurers for more than $750,000 in the aggregate.
    That as between the persons to whom certificates of insurance had been- granted, those whose property was first put at risk had the priority of right without regard to- the time when their insurance was effected; and that when risks amounting in all to $750,000 had been ascertained and indorsed on the Policy, the powers of J. Day & Co. were exhausted, and these outstanding certificates became thenceforth inoperative.
    It appeared that before the property in question was shipped, there had been over $750,000, in the aggregate, at risk.

      It was held at special term that J. Day & Co. had no authority to make the defendants insurers for more than $750,000 in. the aggregate; that as this limit was reached before the cotton in question was shipped, their powers were exhausted, and the plaintiff consequently was from that time uninsured by the defendants; that the plaintiff’s contract of insurance could not be treated as existing anterior to the 1st of February, 1854, and binding for the future; that on that day J. Day & Co. had no authority to make such a contract, and therefore the defendants were not liable for the cotton in question, and the plaintiff’s complaint was dismissed.
    The decisions of the Judge were duly excepted to. It did not appear from the facts as found, whether $750,000 of risks, in the aggregate, had attached under the certificate issued to the plaintiff from the time of its renewal, and under like certificates of a prior date including specific risks, prior to shipping the cotton in question. Some portions of the correspondence between the defendants and J. Day & Co., and some additional facts, are stated in the opinion of the Court.
    From the judgment entered on the decision, dismissing the plaintiff’s complaint, the present appeal is taken.

      Charles 0 ’ Conor and William Curtis Noyes, for appellants.
    I. The relation between the defendants and J. Day & Co. was manifestly that of principal and agent. It is constantly so recognized in terms by the Company, and no other legal name can be given to it. The printed form of a Policy was used in framing the agent’s letter of attorney or charter of authorization. And in respect to the alleged limit upon their power, the question is, did the use which was made of that printed form convey, with sufficient clearness to bind third persons, the idea that the agent’s power to insure was limited to the sum of $250,000 in the aggregate.
    H. The letter of attorney does not express or convey any such idea. Its true reading is: We hereby authorize J. Day & Co., for us' and in our name, to grant certificates of insurance, covering property to be indorsed hereon by J. Day & Co., at rates to be fixed by them, subject to conditions contained in such certificates, and not inconsistent with the terms of this form. This was, in effect, writing a power of attorney to insure on the face of a pattern Policy, the terms of which, so far as applicable, were to be impliedly incorporated with all certificates issued under it. (Devaux v. J'Anson, 5 Bing. N. C., 519 ; Lord Ellbuborough in Robertson et al. v. French, 4 East, 140, 141.)
    IIL If the Company and J. Day & Co. understood this $250,000 to be a limit upon the aggregate amount of insurances to be granted by the latter, such understanding on their part would not bind or in any way affect the person insured. The insured did not so understand the paper, and they may lawfully claim the benefit of its true construction.
    IY. The Company did not so understand it when the Policy was issued.
    Y. The Company & J. Day & Co. may possibly have understood this $250,000 entry as a limit upon the power of the latter, binding them in like manner as private instructions bind an agent. They could not have had a clear conception that it bound certificate holders.
    YI. It is impossible that the Company or J. Day & Co. could ever have had an intelligent and practical conception that such limit existed and could be enforced in the way now attempted against persons obtaining certificates from J. Day & Co. J. Day & Co. themselves issued the open certificates which were altogether indefinite in amount, and they knew that there was no other method in which the business could be done.
    The Company had explicit notice that the business was done under such open certificates as early as January 27, 1853. Indeed, as insurers they are chargeable with notice of the course of trade; and, besides, it is to be presumed from the evidence that they were well acquainted with it. Insurers are chargeable with notice of the course of that trade in which the insurance is effected. (1 Phil. on Ins., §§ 119, 140, 141; Eyre v. Marine Ins. Co., 5 Watts & Serg., 122, and cases therein cited; 8 Pet. R., 582.) Ignorance for so long a time of the business openly carried on by their agents in their name and for their account and profit, if it really existed, would have amounted to gross negligence on the part .of the Company, and sufficient to charge them with constructive notice. (Gansevoort v. Williams, 14 Wend., 139, 140; Williamson v. Brown, 15 N. Y. R., 359.) In ¿respect :to this sup posed limitation of power, the contracts of insurance, evidenced by these open certificates, must take effect at the time of their issue. As contracts of insurance, they could not have their inception at the time when the particulars were given, for that was always after the risk was known to have 'terminated.
    As contracts of insurance they could not have their inception at the time of the commencement of the risk, i. e., the loading of the goods on board; for that construction would produce the utmost uncertainty and confusion. Ko certificate holder would ever know whether he was insured or not until an account was taken of all the doings of all the certificate holders. The agents would never know when the limit was reached. One applying for insurance would have no means of ascertaining whether or not the limit was already reached. The very first taker of a certificate might have his insurance superseded by a subsequently insured person procuring his goods to be first shipped. This construction might lead in any case to the singular result attained in this. A contract of insurance, perfectly valid when made, would be supplanted by the subsequent act of the insurer’s agent.
    Instead of its being a far-fetched and indeed unwarrantable deduction from the peculiar structure of an awkward and inartificial document, if it had been plainly and directly expressed that the agent’s power of insuring was limited to the amount of $250,000 in the aggregate, the absurd consequences to which it must lead, in such a business as that under consideration, would prove that the contracting parties did not intend the very thing . they said. When such stipulations are made, they are treated as mutual mistakes and disregarded. (1 Phil. on Ins., § 6, and note; id., §§133, 135, 137, 125; 1 Greenl. Ev., 278; Alsager v. St. Katherine's Dock Co., 14 Mees. & Welsb., 799 ; Kemble v. Farren, 6 Bing., 141; 6 House of Lords’ Cas., 139.)
    VII. There can be no pretense that the alleged limit was exceeded on the T5th Kovember, 1853, when the plaintiff obtained his certificate. The defendants’ agents could not, by subsequent insurances, divest the plaintiff of his already established right; and, consequently, the inquiry at the trial as to the state of the account between J. Day & Co. and their power "of attorney on the 1st February, 1854, was altogether irrelevant.

      .YU! If such an account could be taken, the sums underwritten by J. Day & Co., for themselves or their correspondents, should be deducted. They had no authority to grant such insurances. (N. Y. Central Ins. Co. v. National Protection Ins. Co., 4 Kern., 85.)
    IX. The case made by the complaint was fully proved.. The defendants should have been decreed to deliver a valid Policy of insurance, and to pay the loss, with interest and costs;. consequently the judgment of the Special Term should be reversed. (Perkins v. Wash. Ins. Co., 4 Cow., 645; Carpenter v. Mutual Safety Ins. Co., 4 Sandf. Ch. R., 408; Tayloe v. Mer. Fire Ins. Co., 9 How. U. S. R., 390; Union Mutual Ins. Co. v. Commercial Mutual Ins. Co., 8 Law R., N. S., 610; Trustees First Baptist Church v. Brooklyn Fire Ins. Co., 18 Barb., 69.)

      Wm. M. Fvarts, for respondents..
    I. The defendants placed in the hands of J. Day & Co. an open Policy to the amount of $250,000.. This Policy was open to take in such specific risks,, conformed, to its terms, as from time to time the assured,, by agreement with: J„ Day & Co. therefor, should procure to be indorsed thereon.
    1. This Policy gave an opportunity of insurance, in - the aggregate,, to its limit in amount, and not beyond. The sum once filled,, there was no room for further insurance under the Policy.
    2. Ho actual contract of insurance arose under this Policy until the assured, the subject of insurance and the premium, were ascertained, and the risk thus insured was indorsed on the Policy.
    3. The .Policy, as placed in the hands of J. Day & Co., differed in no respect from an open Policy for an equal sum issued to an assured by name, so far as respects the amount for which the defendants undertook to become insurers.
    4. The only difference was, that instead of the assured being determined as a party to the Policy, J. Day & Co., named as the assured, were authorized to fill up the Policy with ysks, conformed to its terms, for other and various parties.
    II. There was no agency, or show, or credence of agency, to J. Day & Co. to effect insurance with defendants, beyond the faculty of admitting risks upon the Policy, according to its terms and within, in the aggregate, its amount.
    The power of adjusting losses did not extend, or purport to extend, the power of insuring.
    The furnishing by defendants, to J. Day & Co., of a tariff of premiums or of blanks, whether of certificates of insurance or of orders for payment of losses, has no significance on the point of authority to insure.
    III. The Policy of insurance, the whole instrument by and upon which J. Day & Co. either could effect or assumed to effect insurance with the defendants, was exhibited to the plaintiff at the outset, and was fully understood by him.
    IY. At and before the inception of the risk of the plaintiff, by this suit now sought to be indorsed upon one or the other Policy of the defendants, the insurance opened by the defendants in the name of J. Day & Oo. for distribution to assured to be named, was fully taken up ; the Policies being exhausted, there was no space or opportunity for a contract of insurance to arise upon the plaintiff’s risk under them or either of them ; beyond the Policies, J. Day & Co. had no authority and no show or pretense of authority.
    1. If the Policy “ 993 ” be treated as an extension of the previous Policy, and constituting an unbroken line of insurance of which the risks in the order of entry formed a continuous series, (as they are numbered, in fact, on the book,) the whole aggregate of the Policies had been filled before this risk of the plaintiffs had its inception.
    2. If the plaintiff seek to ascribe this risk to the first Policy, “784,” as extended by the additional grant of $250,000, that Policy and its extension had been exhausted before the inception ■of this risk.
    Y. The open certificate, so called, granted by J. Day & Go. to the plaintiff, purported to effect no insurance for the plaintiff, except as indorsements should be made upon the plaintiff’s insurance book by J. Day & Co. under the described Policy (No. 784.)
    1. No certificate granted by J. Day & Co. could entitle the plaintiff to insurance under the defendants’ Policies'beyond their .amount, nor except in conformity with .their .terms.

      2. The only construction of this open certificate, so called, which can help the plaintiff, would be an exclusive appropriation of the whole Policy to his risks by reason of the prior date of this open certificate, but not of his risks, as they from, time to time became insurable and supplied a premium.
    3. This construction is inadmissible: (1.) as unsupported by the language or purport of the certificate itself; (2.) as equivalent to a conversion of the Policy into a private Policy of the plaintiff, thus frustrating the whole plan and scheme of the intended insurance; (3.) as involving an absurd subjection of the defendants’ interest to the plaintiff’s occasions without consideration; (4.) as negatived by the whole course of the business, as conducted by all parties with the knowledge of each.
    4. The true purport of the open certificate, its design and office were to give the plaintiff the right to have his risks, proving conformable to the certificate and the Policy, indorsed upon the Policy, as they should severally have their inception. The contingency that the Policy might, at the inception of some future risk, be exhausted, and so not cover such future risk, was apparent, and necessarily was at the hazard of the plaintiff.
    It is the ordinary hazard of the holder of an open Policy that shipments may be at risk, without timely advice, beyond the limit of his open Policy.
    VI. The case is governed by well settled rules of the law of agency. The defendants have exercised every degree of caution in setting forth the true position of J. Day & Co. distinctly and unequivocally, and the plaintiff has been misled by no act or omission of defendants.
    The loose method of transactions between plaintiff and J. Day & Co., was never made known to or countenanced by the defendants. (2 Duer on Ins., ch. xii, §§ 44-53.)
   By the Court—Bosworth, Ch. J.

The primary and main object, if not the sole object, of confiding to J. Day & Co. the powers vested in them was, that third persons might obtain insurance upon cargoes by application to them, with like force and effect as upon an application to the defendants themselves; and that J. Day & Co. might execute and deliver to all persons, applying to and contracting with them as agents of the defendants, authentic evidence that such persons were insured by the defendants as effectually and absolutely as by a formal Policy issued by the defendants themselves, and were insured against the risks described in the certificates issued and delivered by J. Day & Co. to the persons thus insured.

The defendants’ letter to J. Day & Co. of the 27th of October, 1852, states the object of the defendants in delivering the Marine and Eire Policies which it accompanied, and the use to be made of the certificates furnished therewith, and declares that “the certificates are to be used as evidence for the assured that the risks described by them are covered by the Policy in your” (J. Day & Co.’s) “hands, and are^onsidered by us in fact as representing a Policy issued by the Company itself, subject to all the conditions of the same, and, in case of loss, payable in like manner.”

This letter of instructions also states that “we” (the defendants) “ have not named a limit in the Marine Policy, knowing the great difficulty you would have in fixing an amount with the parties for whom you would be called upon to insure; but it is our wish that you should not incur a liability for more than $10,000 by any one first-class boat, nor more than $5,000 by any other craft.” On the 15th of November, 1852, J. Day & Co., on being applied to, as such agents, by the plaintiff, for insurance, issued to the plaintiff a certificate signed by them, (the certificate being one which the defendants had furnished to J. Day & Co., to be signed and delivered by them as such agents,) which certificate declares that the plaintiff “ is insured by the said Union Mutual Insurance Company” * * “ on cotton shipped per good steamboats, from points on the Chattahoochee river to Apalachicola, and consigned to ” the plaintiff, “ valued at....., per indorsements made in book by J. Day & Co., on board the.....,......master, at and from ____to.....; time of sailing....., bills of lading dated......” On the back of this certificate, J. Day & Co., on the 15th of November, 1853, made and signed an indorsement in these words, viz.: 1

“ The foregoing Policy is hereby renewed, to cover all cottons, as per the body of the Policy, from the 15th of November, 1853, to 1st July, 1854.

“ Apalachicola, 15th Nov., 1853. J. Day & Co.
“See parties’ names in book annexed.”

This certificate, when received, was pasted in, or attached to, a book kept by the plaintiff, in which he entered the cargoes intended to be protected and covered by the certificate from time to time, when informed of the fact of cotton having been actually shipped, consigned to him, and he exhibited to J. Day & Co., monthly, such certificate and book and the entries therein made. The entries were made in pencil by the plaintiff in the first instance, and were written over by J. Day & Co., on being found to be correct. They, at the same time, entered in the book in which they had pasted Policy No. 784 . the goods thus ascertained'to have been at risk and the amount of premium payable for insurance thereon under the said certificate. At the time of issuing and delivering the said certificate to the plaintiff, they made an entry in their book in which they had pasted Policy No. 784, stating the grant of the said certificate, the purpose for which it had been issued, and also entered, at the time, the fact of its renewal from the 15th of November, 1853, to the 1st of July, 1854.

Was the said certificate a valid contract between the plaintiff and the defendants, at the moment it was issued and delivered by J. Day & Co. to the plaintiff? Could the latter, as a matter of right, recover upon and by reason of it for a loss of property described as insured by it, in a case in which no question could arise as to J. Day & Co. having insured to a larger amount in all than Policy No. 784 authorized?

By the terms of the Policy (No. 784,) it was “to cover only property which may be indorsed hereon by said J. Day & Co.” It covers “ all kinds of lawful goods,” &c., “laden or to be laden” on board any good vessel or steamer, &c.

“ The premiums on risks to be fixed at the time of indorsement ; and such clauses to apply as the Company may insert, as the risks are successively reported.”

“ This Policy to be deemed continuous, unless otherwise directed by either party; thirty days’ notice being given to the assured to enable risks which had already attached previous to the receipt of notice by J. Day & Co. to terminate."

If a Policy, in form like this one, had been issued directly by the defendants to the plaintiff, and such Policy had stated that it yms to cover only property which may be indorsed hereon by the President of the Union Mutual Insurance Company,” and the President of the Company, subsequent to its execution and delivery, had indorsed thereon, viz., “ This is to cover all cotton shipped per good steamboats from points on the Chattahoochee river to Apalachicola, and consigned to S. H. Hartshorne,” I think it would not be doubted that the Company would be liable for a loss of cotton coming within the description contained in such indorsement.

There was indorsed upon Policy No. 784, at the time the certificate of insurance was delivered to the plaintiff by J. Day & Co., the following entry, to which some modifications in the valuations appear to have been added at subsequent dates, viz.:

“Nov. 15, 1852. Certificate granted to S. H. Hartshorne, to cover all cotton shipped per good steamboats from points on the Chattahoochee river to Apalachicola, by or for account of the following parties, and consigned to S. H. Hartshorne: valuation per bale annexed to each name.
“ Eire risk at Apalachicola three days after landing:
1W. T. Simpson from Eufaula, valued at $50 per bale.
“ Roberts & Locke, “ J. M. Morrison, “L. J. Leaird,
“L. F. Stow,
“D. Morris,
^ tS S *c3 a? 5 « »
§ | § S
“ “ 50 “
“ “ “ 50 “
“ “ “ 45 “
“ “ “ 50 “
“ Georgetown, “ 50 “
“ Harrison & Godwin, from Eufaula, valued at invoice.
“ J. M. Hamilton & Co., “ “ “ $50 per bale.
“ G. A. Roberts, “ “ “ 45 “
“J. P. Adams, valuation at $50 per bale—increased from December 14, 1853.
“Above reduced to $45 per bale, from date of Feb. 4, 1854.”

At the time of the renewal of the certificate held' by Hartshorne on the 15th of November, 1853, there was indorsed on Policy (No. 784) by J. Day & Co., underneath the indorsement made thereon (on the 15th of November 1852,) the following, viz.:

“Nov. 15, 1853.
“The above certificate renewed from this date to 1st July, 1854.
“J. Day &' Co.”

Thus, there was indorsed on the Policy, that “cotton” was insured by it under the certificate issued to the plaintiff; the names of the persons who were to ship it; the place where they resided; the name of the consignee; the voyage to be made; the class of steamers on which the property was to be shipped, and the per bale valuation of the cotton so insured.

“Property,” viz.: cotton thus described and identified, was “indorsed hereon (on the Policy) by said J. Day & Co.,” on the 15th of November, 1852, as insured by it; and the Policy in terms declares that the Policy is to “cover property which may be indorsed hereon by said J. Day & Co.”

The certificate issued to the plaintiff, when read in connection with the indorsement thus made on the Policy, is very intelligible.

It reads thus: “Entered this date, on Policy (No. 784) issued by the Union Mutual Insurance Company of the city of New York, sundry amounts per indorsements made in book accompanying this certificate by J. Day & Co., on account of sundry parties whose names appear on book, payable in case of loss,” &c., “on cotton shipped,” &c. The “sundry parties” are the persons whose names were specified in the indorsement made on Policy No. 784, and which names were also written in the “book accompanying this certificate."

The Policy No. 784, the certificates and letter of instructions furnished with it by the defendants to J. Day & Co., when considered separately or together, indicate no intent of the defendants, that J. Day & Co. should not make contracts of insurance in this manner; nor do they furnish any warrant for saying that the indorsement which J. Day & Co. made on the 15th of November, 1852, on the Policy (No. 784) was not as definite and as full in its particulars as it was contemplated by the defendants they might have occasion to make, in transacting their business within the limits of the powers intended to be conferred.

The Policy (No. 784) insured goods “laden or to be laden,’ and the contract evidenced by the certificate by its reference to and embodiment of the provisions of Policy No. 784, as part of such contract, makes it a valid contract between the plaintiff and the defendants.

The letter of the 27th of October, 1852, states as a reason why no limit has been prescribed as to the amount of insurance which could be rightfully.granted (upon cargo in any one boat, to any person or persons under the Mariné Policy,) that the defendants knew “the great difficulty you” (J. Day & Oo.) “would have in fixing an amount with the parties for whom you would be called upon to insure.”

It appears, without contradiction, that for many years prior to the defendants conferring authority on J. Day & Oo. to make contracts of insurance for them, and during all the time that such authority existed and was exercised, the course of business was, that the consignees of cotton residing at Apalachicola “insured the cotton shipped to them by parties residing in the interior and sending it by the rivers to that place; that from the want of rapid communication with the interior, (the mails being carried by steamboats,) it was impossible to know when the cotton was shipped, (at the time of shipping it,) as the cotton would frequently arrive before or with the advices of its shipment, and that therefore the practice was and had been during all that period,” (some fifteen years,) “ in reference to open Policies, to regard all cotton shipped under the open Policies as covered by them, although the details of the specific shipments were not entered on the Policies.”

The defendants in their letter to J. Day & Oo. of the 15th of January, 1853, say: “We notice quite a large amount under Policy Ho. 14, but presume it will go down the river by a number of boats, and that you have limited the amount by any one boat at one time, not to exceed $10,000." .

J.- Day & Co., in their reply of the 27th of January, 1853, state that “it is very seldom that the amount of risk on any one steamer reaches over $5,000 or $6,000, by all the parties to whom we have given open Policies."

The defendants, in their letter to J. Day & Co. of the 14th of February, 1853, say: “If you can conveniently, we should be glad to have you specify in your returns the name and amount by each boat, and oblige,” &c.

J. Day & Co. replied on the 26th of February, 1853, that: “It would be difficult to give the amount of risk on any one particular trip of any boat. We could give the amount by any one boat for each month very easily.”

In answer to this, the defendants wrote to J. Day & Co. on the 7th of March, 1853, thus: We “ can only say that we wish you to use caution in accepting the river risks, keeping the amount by any one boat as small as you can consistently, and scattering the fire risks as much as possible. If at any time you find the returns larger than prudence would dictate on the premiums, &c., we can get reinsurance done here on advice from you.”

I think the defendants are chargeable with notice of the manner in which J. Day & Co. transacted business for them, and that there is nothing in it opposed to the apparent intent and expectations of the defendants in respect thereto at the time of employing them, as evidenced by the papers which .they furnished to J. Day & Co. as constituting their authority and indicating the course they were to pursue.

If this be a correct view, then it lollows that the certificate issued to the plaintiff by J. Day & Go. on the 15th of November, 1852, was from the time of issuing it a valid contract of insurance, and continued to be a valid and continuing contract, so long as by its terms, or by agreement between the parties, it continued in force.

All cotton of the description which it declares to be covered by it, is insured by it, and upon a loss occurring, the defendants are liable for it as the insurers.

If a valid contract, it could not be terminated by the mere fact that J. Day & Co., as the agents of the defendants, subsequently-made contracts of insurance with other parties and issued certificates to them.

If under all the certificates issued, property was put at risk of a larger aggregate amount or value than they could make valid contracts to insure, and if for that reason some of such certificates must be rejected, as made without authority, or treated as having become inoperative, I do not see on what principle a second contract is to override and defeat a prior contract between the Company and other parties valid when made, and existing in full force when the second one was entered into.

The Judge at Special Term treated the contract between the plaintiff and the defendants as having been, in effect, made when the cotton in question was shipped. He says: “ I consider the contract of insurance as to the cargo of the Alabama cannot be treated as in existence until this 1st day of February, 1854, at the earliest.”

The cotton which was shipped by this boat was not at risk, it is true, until it was put on board. But a valid contract was made certainly as early as the 15th of November, 1858, that all cotton which the shippers of the cotton in question should ship between that date and the 1st of July, 1854, from the places named, consigned to the plaintiff, should be protected against the perils enumerated in Policy Ho. 784, and that the defendants would pay to the plaintiff the amount of any loss which should be suffered.

That fact was constructively known to every person to whom J. Day & Go. subsequently granted certificates, or with whom they made contracts of insurance, who is chargeable with notice of the indorsements made on the pattern Policy, by J. Day & Co., of the grant of certificates under it.

It seems to me, therefore, that, if any party is to be defeated of his insurance on the ground of there being an aggregate limit of risks beyond which J. Day & Oo. could not bind the defendants, the one who obtained a certificate of insurance last took it at the hazard of its being inoperative by reason of the certificates previously granted, and the amount of property put at risk under them.

That he, as well as the Company, must recognize the rights of the holder of the certificate of insurance first granted—a certificate constituting a valid contract between the parties to it when made, and not to be avoided (if avoided at all) on the sole ground of a subsequent contract with himself in the same form, and of his individual acts under it.

I cannot understand on what principle a contract between A and B, valid in all respects, and under which both are at the time acting, and by which A, in such an event as has happened, is entitled to recover a certain sum of B, can be defeated or impaired by force of a subsequent contract between B and 0, and anything 0 may do under it.

The plaintiff’s contract is first in point of time, and he has precedence, therefore, in point of right.

If the aggregate limit of $750,000 had not been reached at the time the property insured by the plaintiff was lost, I do not understand it to be intimated in the opinion delivered at Special Term that the plaintiff would not be entitled to recover. If he would be, it would not be for the reason that any contract was made at the time the cotton in question was shipped; but his right to recover would rest on the grounds that the contract of the 15th of November, 1853, (treating the time of the renewal as its true date,) was a legal and valid contract of insurance, and that there had been a loss from the perils which it insured against. If there was not a valid contract of insurance from and after the time the certificate was delivered and renewed, then it follows that the plaintiff never had any property insured by force of his transactions with J. Day & Co.; for he never made any contract except such as the certificate granted and the Policy to which it refers express and create.

To hold that the certificate first granted is a valid contract of insurance, and is to be deemed continuous until terminated by notice from the Company, or by agreement of the parties, and to also hold that, while both parties are acting under it as a valid and subsisting contract, it must be treated as inoperative from the moment that J. Day & Co. ascertain that, under certificates subsequently granted in like form to others, over $750,000 worth of property has been put at risk in such sense that property subsequently shipped will not be protected by it, would, as I think, disappoint the expectations and intentions which all parties to the contract must have had and acted upon at the time it was made.

Whether, on the occurrence of the fact that more than $750,000 worth of property was at risk, the powers of J. Day & Co. had been exceeded in such wise that those who shipped under the certificates last granted could not recover in case of loss, is a question which it is unnecessary to decide now.

But, if any person thus insured is to be treated as uninsured on the mere ground that an aggregate limit was prescribed beyond which the defendants could not be bound by the acts of J. Day & Co., such persons are to be ascertained by taking the dates of the contracts to insure, in the inverse order of the times when they were severally made.

Jewett, J., in Truscott v. King, (2 Seld., 157,) states that “the principle is well settled that a mortgage or judgment maybe taken and held as security for future advances and responsibilities to the extent of it, when that forms a part of the original agreement between the parties; and the future advances will be covered by the mortgage or judgment in preference'to the claim under a former intervening incumbrance, with notice of the agreement.”

The report of that case does not disclose that any member of the Court dissented from that part of his opinion. If that be the rule, then it may be said in this case by the plaintiff, to every one whom the defendants, subsequently insured through the agency of J. Day & Co., that you had notice by the -indorsements made on the Policy, when you obtained insurance under it, that, by a valid contract, made on the 15th of November, 1858, I was insured from that date until the 1st of July, 1854, for all cotton that might be shipped, as described and provided in and by the indorsement then made on the Policy, between those periods. It was your folly, or at your own risk, that you relied upon a Policy that might become inoperative by reason of the aggregate risks under it and previous contracts of insurance exceeding $750,000 in all, while your own property was exposed to peril.

It is very obvious that this mode of making contracts of insurance is ill adapted to protect parties at Apalachicola desiring insurance on property situated like that in question, and who must be insured, if at all, by open Policies by which property shipped after the granting them would be covered; especially as, in many instances, it could not be known that the Policy had attached to specific property until the voyage insured against had been performed.

If, in such a case, all property shipped after over $750,000 in' value was at risk would be uninsured, (although it was unknown to any one when the last shipments were made that such aggregate had been reached,) them it-follows that those holding certificates would have no means of ascertaining, after the business had been prosecuted in this mode for a brief period: of time, either by application to J. Day & Co. or otherwise, whether expected consignments, covered by the terms of the contracts made, would be protected or not.

And in case of shipments made at different ports on the day when the aggregate limit was thereby reached and exceeded, the rights of parties would depend on the hour or fraction of the hour at which such last shipments were made. And so, too, if this view be correct, J. Day & Co., by taking a definite risk which would fill up the supposed limit of $750,000, on the morning the cotton in. question was shipped and before it was shipped, would thereby cancel and annul the contract between the plaintiff and defendants, which contract, but for such act, would remain in full force, and protect the cotton in question.

It seems to us that the contract first made gives priority of right, if all the assured are not to be protected; and, as the adoption of that rule makes a new trial necessary, it would be out of place to attempt to settle, in this case, what rule must obtain between the defendants and those with whom they made contracts at a later date. If any case arises in which it shall be established that, by allowing the claims for losses of those who insured at a later period, the defendants will bo held to have been liable for risks in the aggregate to an amount exceeding $750,000, that will furnish the appropriate occasion to decide the question of the defendants’ liability in such a contingency.

We think the judgment should be reversed, and a new trial granted, with costs to abide the event.

Ordered accordingly.


source: Caselaw Access Project

license: Public Domain

text:
    Stewart S. Haff, (who prosecuted with John Lyon,) Plaintiff and Respondent, v. Benjamin Blossom and Charles W. Blossom, Defendants and Appellants.
    Where the owners of property sell and deliver it to third persons by whom, it is received and enjoyed under a written agreement signed by the vendors and vendees, and such agreement is, in form and terms, that the vendors and vendees “ constitute and appoint B. and W. to appraise” the property, and “bind themselves each to the other to abide by their valuation of the same, at which” (the vendors) “agree to sell the same to” the vendees, and the latter “agree to buy the same ” of the vendors; and in case B. and W. “should be unable to agree in their valuation, they shall select a disinterested party, as usual in such cases, to assist them in the appraisement;"’ and where B. and W. being unable to agree, selected a third person, and the three met together and examined the property, and two of them agreed upon a valuation, the vendors are entitled to recover the sum so agreed upon, although such third person was selected upon an 'agreement between him and B. and W. that he should fix the value and they would concur in it, provided that agreement was abandoned, and the three did in fact meet and examine the property together, with a view to determine its fair value, and the value so agreed upon was fixed in good faith, and expressed the honest ■ judgment of the two who concurred in respect to it.
    (Before Bosworth, Oh. J., and Hoffman and Monorief, J. J.)
    Heard, December 7;
    decided, December 31, 1859.
    This is an appeal by the defendants from a judgment in favor of the plaintiff, Haff, entered upon the verdict of a jury. The trial was had before Boswobth, Ch. J., and a jury, on the 7th of March, 1859. John Lyon and Stewart S. Haff are the plaintiffs upon the record; and Benjamin Blossom and Charles A. Blossom are the defendants.
    The action was brought to recover the price of certain sheds sold and delivered by the plaintiffs to the defendants.
    The plaintiffs, being the owners of certain sheds, entered into a written agreement with the defendants in these words, viz.:
    “We hereby constitute and appoint James B. Barney and William S. Wright to appraise the sheds and fixtures now on the premises foot of Montague street, Brooklyn, known as Lyon & Half’s Haval Store Yard, and bind ourselves each to the other to abide by their valuation of the same, at which we, Lyon & Haff, agree to sell the same to Benjamin Blossom & Son; and we, Benjamin Blossom & Son, agree to buy .the same of Lyon & Haff It being hereby agreed that in case the appraisers named above should be unable to agree in their valuation, they shall select a third and disinterested party, as usual in such cases, to assist them in the appraisement.
    “ Witness our hands this 25th day of April, 1854.
    “ (Signed)
    “ Benjamin Blossom & Son,
    “ Lyon & Haff.”
    The complaint sets forth the agreement, and alleges that Barney and Wright, being unable to agree upon a valuation, selected one Robert White to assist them in the said appraisement; that the three met and examined the property, and that Wright and White agreed that its value was $2,250, and signed a written certificate to that effect, dated August 21, 1854; that the defendants refuse to pay the plaintiffs the price so fixed, or any part thereof; and it prays judgment for $2,250 and interest from August 21, 1854.
    The defendants gave evidence tending to show that when White was selected to act, he was selected upon an agreement between Barney and Wright that he should fix the valuation, and that they should agree to it whatever it might be.
    The plaintiffs also gave evidence tending to show that, as matter of fact, the three met together and examined the property with a view, by means of an actual examination, to agree upon the value, and that the sum agreed upon by Wright and White was fixed in good faith as a result which they believed to be just.
    There was some evidence that when the three were last together Wright agreed to communicate to the plaintiffs a proposition then made by Barney, and to see him again in relation to it.
    The defendants proved, under a supplemental answer which they had been allowed to file, that on the 29th of January, 1859, the defendants settled with Lyon, and paid him in full for his half interest in the present cause of action, and released him therefrom, it being part of such agreement that “ Stewart S. Haff be permitted to proceed with said action, or settle the same as he may choose, as to one-half of the cause or claim on which said action is founded,” &c
    The Judge was requested to charge:
    1. If, when the appraisers were last together, they separated agreeing to meet again, Wright and White had no power in the absence of Barney, or without notifying him of the time of meeting, to make an appraisal.
    2. That Wright and Barney had no power to select White, and agree that his appraisal should govern, and if they did so, then there has been no valid appraisal, and the plaintiffs cannot recover.
    3. That if the jury find that the appraisal was made in accordance with the terms of the agreement, that the jury are to find for one-half only of the appraisal with interest, in favor of the plaintiff Haff, and that they shall find for the defendants as against the plaintiff Lyon.

      4. That1 if Wright concurred with White, because he supposed that he was bound by the appraisal of White, then the appraisal is not binding.
    The Judge then charged as follows:
    “The plaintiffs are entitled to recover $1,275, and interest from August 21st, 1854, or nothing.
    “If Wright and Barney were unable to agree, and thereupon selected Robert White to assist them in the appraisement, and the three met together and examined the property, and White and Wright, as the result of the examination, and of the deliberation had by and between the three, united in and agreed upon the sum of $2,550 as a fair and just valuation of the property, the plaintiffs are entitled to recover. But if White was selected by Wright and Barney to fix the value, and if Wright and Barney agreed that they would be bound by White’s valuation, and so told him; and if he, acting under this selection, and for such purpose, fixed the sum of $2,550 as the value, then he acted in a manner not authorized by the agreement of the 26th of April, 1854, and under powers which that paper did not authorize Barney and Wright to confer, and the appraisal signed by White and Wright is void, and there can be no recovery in this action.”
    (To this instruction the plaintiffs’ counsel excepted.)
    “ The parties have a right to an appraisal made upon the honest effort of the three to fix a just valuation, based upon such information as- they deemed useful in coming to a correct conclusion, and upon an interchange between them of the views which they severally thought should influence them in determining such value.
    “ But although the jury may be of the opinion that White was selected under an agreement or understanding between Wright and Barney, that he should determine the value, and they would be bound by his valuation, yet if the evidence satisfies you that the three afterwards met and examined the property with a view to and for the purpose of determining its value, and that the valuation of $2,550 was finally assented to and agreed upon by Wright, because such, in his judgment, was a fair and just value of the property ; and also, that such was the opinion and judgment of White, then the appraisal is valid, and the plaintiffs are entitled to recover.”

      (To this part of the charge the defendants’ counsel then excepted.)
    The Court declined to submit to the jury the proposition, embraced in the first request, and to such refusal the defendants’ counsel excepted.
    The jury rendered a verdict against the defendants for $1,681.11 in favor of plaintiff Haff.
    The evidence material to the questions covered by the exceptions taken, is stated in the opinion of the Court
    Judgment having been entered on the verdict, the defendants appealed from it to the General Term.

      G. Dean, for appellants, (defendants.)

      A. J. Willard, for respondent, (plaintiff.)
   By the Court—Bosworth, Ch. J.

This-action-is-brought to recover the value of certain sheds and fixtures sold and delivered by Lyon & Haff to the defendants.. There is no controversy as to the fact of a sale and delivery of the property, or as to the terms of the contract. The sum, or price to- be paid was not agreed upon by the parties..

The contract of sale provided a mode of ascertaining the price to be paid, and if that has been ascertained in the maimer provided, the plaintiffs are entitled to recover.

Ho point was made at the trial or on the argument of the appeal, that Barney and Wright were not unable to agree. There can be none that they did not select White to act in the matter.

Wright testifies that he and Barney “ agreed to call in Robert White,” and they two-went to see him. “I told him we could not agree, then read the agreement signed by the parties, and asked if he would serve ;■ he objected at first; we both persuaded him to go ; we went and examined the premises; he told us he would let us know his valuation next morning—what his opinion was.” The next morning the three met again and compared opinions and separated.

“ A few days'after this, Barney, White and myself met again at the shedk;- White said he could not vary from his first valuation ; that they were worth the full amount; we examined the sheds.”

Barney's testimony is, that he, Wright and White met twice on the matter of agreeing upon a valuation of the sheds, and that White said, on the occasion of the second meeting, that “ he could not alter his appraisal.”

White’s testimony is to the same effect.

Tire fact is established, therefore, by the concurring testimony of the three, that they all met together to examine the sheds, and did examine them, and separated. The next morning they met again, mentioned their respective valuations, and then separated. After this the three had another meeting on the subject, and White told them he should adhere to his valuation, viz., $2,550. Wright, who originally valued them at $2,275, testifies that he subsequently changed his opinion, and regarded them worth $2,550 when he signed the certificate with White. The certificate of valuation signed by the two is in a proper form, and imports that the valuation was made in the manner prescribed by the contract of sale.

The jury found a verdict for one-half of the amount of the valuation; the defendants having, pending the suit, settled with Lyon as to one-half of the claim.

Unless some of the defendants’ exceptions are well taken, the verdict should not be disturbed.

The defendants excepted to the refusal of the Court to submit to the jury the proposition embraced in their request to the Court to charge, that “if, when the appraisers were last together they separated agreeing to meet again; Wright and White had no' power, in the absence of Barney, or without notifying him of a time of meeting, -to make an appraisal.”

It is enough to say of this exception, that there was no evidence entitling the defendants to have that question submitted.

Barney testifies that at the last meeting had by the three, he proposed to Wright that the sheds should be appraised at one-third of their cost, and they went into an office in the yard of the premises to reduce to writing an agreement which he understood had been come to, on the basis of that proposition. But they found that they had misunderstood each other as to that -matter, or at all events differed about it. He says, “We then separated understanding that Wright was to see the plaintiffs, and we meet again.” It is obvious that if Wright was to see the plaintiffs, he was to see them about the proposition which Barney had made, and the future meeting, if any, was to be between him and Wright to learn the plaintiffs’ views.

White testifies that nothing was said to him on that occasion “ about meeting again.” He, of course, did not agree to meet with the others again, nor have any intimation that another meeting was desired by either of them. Barney, at the most, testifies that he “understood” they were to meet again, but he does not testify that anything was said about another meeting.

Wright says, “ I might have said to Barney I would see my parties about thisthat is, about the proposition to pay one-third of the original cost of the sheds. The testimony of Robins and White tends to show that Wright was to see the plaintiffs relative to this proposition.

I do not think this testimony would justify a jury in finding that, when the appraisers were last together, they separated agreeing to meet again.” If this view be correct, then there should not be a new trial, because of the refusal to submit this question to the jury.

The exception taken to the concluding part of the charge, is attempted to be supported on the ground that- if White was selected under an agreement between Wright and Barney, that he should determine the value and they would be bound by it, the selection for such a purpose was a void act, and he was not authorized to act at all.

The proposition charged was, that although he may have been so selected, yet if this agreement or understanding was abandoned, and if they did in fact meet and examine the property together, with a view to determine, and for the purpose of determining its value, and if the certificate was signed in good faith, as expressing the honest judgment of the two thus formed, the appraisal is valid.

It seems to us, that from the time the three met and together examined the property with a view, by their joint action, to reach a valuation which, in their opinion, was just-, White was in fact selected “ to assist them in the appraisement.”

If it be assumed that the jury may have found the question of fact covered by the first branch of the charge in favor of the defendants, then it must be taken as true that they also found that the three, nevertheless, “ afterwards met and examined -the property with a view to and for the purpose of determining its value, and that the valuation of $2,550 was finally assented to and agreed upon by Wright, because such, in his judgment, was a fair and just value of the property, and also that such was the opinion and judgment of White.”

They have found such to be the facts, having before their minds the further instruction that “the parties have a right to an appraisal made upon the honest effort of the three to fix a just valuation, based upon such information as they deemed useful in • coming to a correct conclusion, and upon an interchange between them of the views which they severally thought should influence them in determining such value.”

Such joint action of the three, with such motives and for such purposes, is, so far as White is concerned, the action of a third party selected by Barney and Wright “to assist them in the appraisement,” and presents a case in which those two have acted, in spirit and substance, as the contract for determining the price prescribed.

The judgment and order appealed from should be affirmed. Judgment affirmed.


author: By the Court—Slosson, J.

text:
    Israel T. Potter, Plaintiff and Appellant, v. Ziba H. Kitchen, Defendant and Respondent.
    1. In an action for a breach of the covenant of seisin in a conveyance of land, where the breach was assigned in the complaint by negativing the words of the covenant, and the answer averred the contrary, (viz., that the defendant was, at, &c., the true and lawful ownerj &c.,) in the exact words of the covenant: Held, that the defendant held the affirmative of the issue and the burden of proof, and must prove his title. Accordingly, where, upon tlie trial of such an issue, neither party offers any evidence, the plaintiff is entitled to judgment.
    (Before Hoffman, Slosson and Woodruff, J. J.)
    Heard November 9;
    decided, December 31, 1859.

      Appeal from a judgment rendered for the defendant on the decision of a Referee.
    The action is for the recovery of damages for the alleged breach of the covenants in a deed from the defendant to the plaintiff, purporting to convey certain land in the State of Illinois, (the N. W. qr. sec. No. 13, town. 8, south, range 3, west of the fourth principal meridian in the Military Bounty Tract,) “being the same tract of land as conveyed by Abel Thompson to Moses Ward by deed,” dated, &c., “ and by Moses Ward conveyed to the said Ziba H. Kitchen," (the defendant,) by deed dated, &c.
    The covenants were as follows:
    “And the said Ziba H. Kitchen doth, for himself, his heirs, executors and administrators, covenant and grant to and with the party of the second part, his heirs and assigns, that he, the said Ziba H. Kitchen, now is the true, lawful and right owner of all and singular the above described land and premises, and of every part and parcel thereof, with the appurtenances thereunto belonging ; and that the said land and premises, or any part thereof, at the time of the sealing and delivery of these presents, are not incumbered by any mortgage, judgment or limitation, or by any incumbrance whatsoever by which the title of the said party of the second part, hereby made or intended to be made for the above described land and premises, can or may be changed, charged, altered or defeated in any way whatsoever. And also that the said party of the first part now hath good right, full power, and lawful authority, to grant, bargain, sell and convey the said land and premises in manner aforesaid.”
    The complaint set forth the deed and covenants, and alleged the breach of the covenant in the following terms, viz.:
    “ That the defendant has not kept his covenants aforesaid in said indenture contained, but has broken them in this, that the defendant, neither at the time of sealing and delivering said indenture, was or has been the true, lawful or right owner of all or of any part of the said described lands and premises, or of the appurtenances thereunto belonging, and that the said defendant, at the time aforesaid, had not good right, full power or lawful authority to grant, bargain, sell or convey the said land and premises in manner aforesaid, or in any manner, but, on the contrary thereof, the title to said land and premises, at the said time of the sealing and delivery of said indenture, was in some person or persons other than the said defendant, and who had not conveyed the same to the said Abel Thompson, from whom the defendant, in and by his said indenture, professed to have derived title to said land and premises.
    “ Wherefore,” &c.
    The defendant, by his answer to the complaint,
    “Denies that he has broken or failed to keep any covenant therein contained, and he states that he was, at the time of the making and delivery of said deed, the true and lawful owner of said premises therein described, and of every part thereof, and had good right, full power, and lawful authority, to grant and convey the same, and he denies that the title to said premises or any part thereof was, at the time of his making said deed, in any- other person or persons, as untruly stated in said complaint.”
    The cause was referred to Charles A. Peabody, Esq., and was tried on the 23d of May, 1859. The plaintiff produced and read the deed mentioned in the complaint, containing the covenants above stated.
    The defendant offered no evidence; and the Referee thereupon rendered and reported his finding and decision,
    “ That the plaintiff has not proved the allegations in his complaint to the effect that the defendant, at the time of sealing and delivery of the deed therein mentioned, was not the owner of the land and premises in said complaint mentioned, and had not full power and authority to grant the same.
    “And, as a conclusion of law, he finds and reports that the plaintiff is not entitled to the relief demanded in his complaint, and that the defendant is entitled to judgment that the complaint herein be dismissed and to recover his costs of this suit.”
    From the judgment for the defendant entered upon this decision the plaintiff appealed to the General Term.

      & W. Chester, for plaintiff, (appellant.)
    I. In the very nature of the issue, the onus is on the party averring the ownership, right, or seizin. In conveying he professes to have title, and, of course, can show it. The negative is impossible of proof to the plaintiff. He has no means of ascertaining the title. The defendant must be supposed to know his own title, and it belongs to him to establish it.
    If the onus were on the plaintiff, it would not suffice to prove that A B had a deed to the property: he must prove a perfect title in A B. That is, he must prove an affirmation inconsistent with the affirmative averment of the defendant.
    IT. It is well settled that, in declaring in an action upon such covenants, the plaintiff has nothing more to do than to negative the words of the covenant. The defendant, in answer, affirms them. If it were incumbent on the plaintiff to prove an ownership or seizin in some other person, or an eviction, then it would be necessary, as a matter of course, to aver this in his pleading. The contrary has been decided, on motion, by one of the Justices of this Court in this case, and has been settled law for hundreds of years. (Stevens N. P., 1083; Bradshaw's Case, 9 Co., 60 [b] ; Jenk. Cent., 305, Case 79; Abbott v. Allen, 14 John., 248.)
    The Court to be sure add, “ It must be understood that we decide the question of pleading only, without expressing a definite opinion as to the evidence which may be requisite to maintain the defendant’s plea of seizin, &c. There may, perhaps, be ground for a solid distinction between a case where the covenant of seizin is accompanied by a transfer of actual possession, and a case where the premises are, in fact, vacant.’’
    That is, the question of pleading is the question presented for the Court’s decision. The onus prbbandi is necessarily involved in this, and the decision that the affirmative of the issue must be taken by the defendant results from the onus probandi being, in the nature of the case, upon him. But the Court do not undertake to say how much or what kind of proof it is necessary for the defendants to produce to maintain their plea. In some of the States it had been held that a seizin in fact was sufficient to remove the onus. It has been since settled in this State that a seizin in law is demanded by the covenant of seizin. (4 Kent’s Com., 479, marg. paging; Rickert v. Snyder, 9 Wend., 420; Hamilton v. Wilson, 4 Johns., 72; Morris v. Phelps, 5 Johns., 49, 54; McCarty v. Leggett, 3 Hill, 134; Bingham v. Weiderwax, 1 Comst., 509.)
    The case of Kennedy v. Newman, (1 Sandf. S. C. R., 187,) has been referred to by the Referee as sustaining his decision. It has no such effect or remote tendency. The only question raised was as to what proof was necessary to establish a legal sale. There does not appear to have been any issue upon the covenant of seizin—no issue except as to the legality of the sale.
    III. The Referee having erred on the law of the case, the plaintiff is entitled to have the decision set aside and judgment entered in his favor, or to have a new trial.

      Q. T. Jenks, for defendant, (respondent.)
    I. The burden of proof was on the plaintiff. (Rawle on Cov., pp. 87, 88; Grreenl. Ev., vol. 2, § § 236, 241; Kennedy v. Newman, 1 Sandf., 187.)
    In the case Abbott v. Allen, (14 Johns., 247,) (relied upon by plaintiff to show that the defendant held the affirmative of the issue.) the Court expressly say, in the last paragraph of the opinion, that they “ decide the question of pleading only,” and even on the question of pleading the case of Tallmadge v. Wallis, (25 Wend., 107, in the Court of Errors,) holds the opposite.
    In the present action, the breach is alleged both in the affirmative and in the negative, and the defendant, not the plaintiff, holds the negative of the issue to be tried.
    The complaint sets forth the covenant and assigns the breach by negativing the words of the covenant, and then continues: “but on the contrary thereof We title to said lands and premises at the said time, &c., was in some person or persons, &c., who had not conveyed the same to the said Abel Thompson, from whom,” &c.
    That part of the breach, then, which the defendant could traverse was the outstanding title affirmed by the plaintiff. This was traversed in the answer and put the affirmative of the issue, and the burden of proof on the plaintiff. (Findlay’s Archbold’s Nisi Prius, vol. 1, p. 370, marg. paging, and cases cited; 1 Greenl. Ev., § 74.)
    II. The rule contended for, imposing the onusprobandi in this case upon the defendant is, as respects the issue to be tried, admitted to be exceptional; and is urged upon the supposition that the grantor best knows of the title and can the most easily prove it.
    However the fact may have been previously to the recording acts in England and in this State, it is certain that under the .present laws affecting conveyances, the presumption now is, that the grantee’s facilities for ascertaining and proving any defect in the title are at least equal to those of the grantor, and that he possesses as much knowledge concerning it.
    Again, the grantee (plaintiff) must set forth the facts constituting his cause of action, and to do so he must know them. So in this case, the plaintiff Potter states, as a fact in his complaint, that the defendant was not seised, but that some other person not mentioned held the title, and this he swears to. So that it follows, that of the matter in issue, the plaintiff has as much, to say the least, knowledge as the defendant, and is able to prove the precise fact in controversy, the existence of which he has verified.
    It is believed that no case in this State has yet held that the burden is on the defendant in an action on the covenant of seizin, and there would seem to be no good reason why a man who gives a deed of a piece of property with the usual covenants should, by that act alone, expose himself to be brought into Court at any moment after the delivery of the deed, and there be compelled, without notice of the particular defect complained of, to furnish a complete abstract to the satisfaction of the Court. If this were so, in most cases of the sale of valuable property by a responsible grantor, it would be-worth the while of his grantee, even at the expense of the costs of suit, to obtain not only a perfect abstract of title, but a judicial decision upon the validity of his title, without the labor and expense attendant upon the examination of the title usually had at the time of purchase. "•
    The judgment should be affirmed, with costs.
   By the Court—Slosson, J.

The simple and only question presented by this appeal is, whether the plaintiff was bound, on these pleadings, to prove affirmatively want of title in the defendant, his grantor, or whether the affirmative of the issue was not with the defendant, to show title in himself at the time of the grant; in other words, on which party the burden of proof as to title rested.

The cause of action, is the breach by the defendant of his covenant of seizin, and the form adopted in this complaint of stating that cause of action, by alleging the breach in the words of the covenant itself, is all that would have been required under the old system of pleading.

So also the answer, in affirming title in the defendant in the words of the covenant, would have been a perfect plea in bar under the former system, and to this plea a replication reaffirming the allegation of want of title in the defendant, in the language of the complaint, without setting out in whom the title in fact was vested, would have been good. (Abbott v. Allen, 14 J. R., 248.)

Since the Code, every complaint must contain a statement of the facts constituting the cause of action. Whether an allegation of want of title in the defendant is an averment of a fact or of a conclusion of law, I will not stop to inquire; since the objection to the sufficiency of the complaint was neither taken by demurrer nor on the trial. Had such an objection been taken it might have presented, perhaps, a question of some difficulty. (Laurence v. Wright, 2 Duer, 673; Schenck v. Naylor, id., 675.)

The parties having gone to trial on these pleadings, the question is, with whom is the affirmative of the issue? The defendant contends that even if it be conceded that on a simple negation of seizin on one side, and affirmance of it on the other, in the language of the covenant, the affirmative would be with the defendant who asserts the title; yet the plaintiff in the present instance not having contented himself with such a simple statement of his cause of action, but having affirmatively alleged that the title “ was in some person other than the defendant,” and who had not conveyed the same to the party through whom, by the recitals in the deed, the defendant professes to have derived his title, is bound to show affirmatively the truth of his allegation.

If, without this allegation, the plaintiff would not have been obliged, in the first instance, to have proved title in some person other than the defendant, does the allegation throw that burden on him ?

I think the defendant is mistaken in his construction of this sentence. It is to be observed that it immediately follows the words in which the plaintiff negatives the language of the covenant, "and is prefaced with the expression, “but on the contrary thereof,” &c. We think that, in truth, it forms part of the general averment in which title is denied to be in the defendant, and was manifestly intended by the pleader to assert such want of title, in the double form of an assertion of a proposition and a denial of the contrary of it. The complaint was perfect without it, (or must, on this appeal, be assumed to be so;) and I do not think is hurt by it. If it had asserted in whom the title was, the consequences might have been different; but as it is, it is in reality but a denial of title in the defendant, and nothing more. Besides, all the reasons which, in this peculiar action, would throw the burden of proof on the defendant are as applicable, with this allegation in the complaint, as they would have been if it had no place in that pleading. If, by reason of it, the burden of proof was on the plaintiff, he would be obliged to prove an absolute title in some other party; whereas, as all the cases hold, he is not presumed to know the exact condition of the title of his grantor. This is the reason given in the books why the burden of proof is on the defendant. He has purchased in reliance upon the covenant of title; and when that is impeached or denied, the grantor is bound to assert and maintain it. In the language of the case in 14 Johnson’s Reports, “it is enough if he suspects the grantor’s title to be defective. He is not bound to wait in suspense until by possibility he can find out in whom the title really is.” If the defendant had no title when he made his conveyance, the covenant was broken the moment it was made, and for this reason, all that the plaintiff need allege is simply a breach of the covenant, by negativing the words of it. A breach of the other covenants can only be shown by matters occurring after they are made; and, hence, it is necessary to allege and prove such subsequent matters. The case of a breach of the covenant of seizin and the right to convey is, in respect to the order of proof, strictly exceptional.

I think the case of Abbott v. Alien, above cited, conclusive on this question; and to the same effect are numerous other authorities. The case of Marston v. Hobbs, (2 Mass., 433,) asserts the same thing. The rule is laid down in Bradshaw's case, (9 Coke’s R., 60,) and has been fully recognized by our own decisions; nor has any distinction been made between the case of a covenant of seizin in alease, which was Bradshaw's case, and that of a covenant in a deed in fee. Of both it is true that it lies more in the knowledge of the grantor what estate he hath than in that of the grantee.

In Abbott v. Allen, the breach was assigned generally in the words of the covenant—the conveyance being in "fee. The plea was that the defendant was lawfully seised, &c., in the words of the covenant, and the replication was, that the defendant was not seised, &c.; still following the words of the covenant, and repeating the allegation of the breach as laid in the complaint. The defendant demurred to the replication on the ground that it did not show in whom the title was, whereby the defendant was not seised, &c. The very point, therefore, which party was to allege, and consequently prove, the actual title, was involved, and the Court held the demurrer ill taken, and gave judgment for the plaintiff; and it seems, by a note at the foot of the case as reported, that they also gave judgment in the same manner, on the same question, in another case, not reported. (Sebeer v. Kimball.)

In Glinister v. Audley, (Sir Thos. Raymond’s R., 14,) on a demurrer to a similar replication, (the conveyance being in fee,) the point relied on was, that “ the plaintiff ought to have shown of what estate the defendant was seised, in regard he had departed with all his writings concerning the land, in presumption of law, and therefore the plaintiff well knew the titleand it was contended that it was not like Bradshaw's case, “ because there the covenant was with the lessee for years, who had not the writings;” but it was held .that the breach was well assigned according to the words of the covenant, and judgment was given for the plaintiff.

The case of Salman v. Bradshaw, (Cro. Jac., 804,) was on breach of covenant in a lease, the covenant being that the lessee had lawful estate to let for the term, the assignment of the breach was general in the words of the covenant, and held good.

In Abbott v. Allen, the language of the Court is unqualified. The grantor, giving such a covenant, is not bound to deliver to his grantee the prior deeds and evidences of his title. The legal presumption is that he retains them. The grantee relies on the covenant of the grantor that he has a good title, “ and until the grantor discloses his title, he (the grantee) holds the negative merely, and is not bound to aver or prove any fact in regard to an outstanding title. Prima fade the grantee is to be presumed ignorant of the real state of the title. The grantor is not bound unless by suit to explain his title.”

The whole subject is reviewed in a learned note (10) in 2d Saunders’ Reports, 181, a., and the distinction between this and the other covenants in a deed pointed out, and the cases cited.

The case of Tallmadge v. Wallis, (25 Wend., 107,) is not in conflict with Abbott v. Allen. ' The only question in that case was whether a plea of want of seizin in the grantor was a good defense to an action on the bond for the purchase money, and it was held that it was not because such a plea did not show a total want of consideration, and therefore as a plea in bar was defective. Had it shown that the defendant had been evicted, or that the grantor, the plaintiff, had no estate in the premises, or that some other person had the entire estate, it would have gone to the whole consideration; but the plaintiff may have had no legal seizin in fee, and yet have had a title by occupancy, which passed under the deed, and thus furnished some consideration for the bond. The case arose on a demurrer to this ‘plea.

To the same effect is Whitney v. Lewis. (21 Wend., 131.)

The case of Kennedy v. Newman, (1 Sandf. Sup. C. R., 187,) is relied upon by the. defendant as showing that the affirmative of proof is with the plaintiff in this action. We are unable to perceive this. The suit was evidently on the covenant against incumbrances, and the incumbrance set up in the complaint and attempted to be proved, was a lien acquired by a purchaser at an assessment sale before the conveyance to the plaintiff, and which the plaintiff had bought off, and the Court held that the plaintiff had failed to establish all that was necessary to show a valid assessment, and a nonsuit was directed. The head note would seem to indicate that the action was on the covenant of seisin; but if it were, the question of who had the affirmative of the issue, could not have arisen, since the plaintiff set out the assessment sale and his settlement with the purchaser in his complaint, and the defendant pleaded no such assessment. Hnder such a state of pleadings, the burden of proof was necessarily on the plaintiff.

We think the Referee erred in his conclusions, and that there should be a new trial, costs to abide the event.

Judgment reversed, and new trial ordered accordingly.


text:
    John Weldon, Plaintiff and Respondent, v. The Harlem Railroad Company, Defendants and Appellants. J. Weldon and Wife, Plaintiffs and Respondents, v. The Harlem Railroad Company, Defendants and Appellants.
    1. In an action against a Railroad Company, to recover damages alleged to have been caused by the negligence of the defendants’ driver in the management of his team in taking it through a public street after it had been detached from a car it had been drawing, a verdict for the plaintiff will be set aside as contrary to evidence, where the testimony is uncontradicted that the manner in which the team was managed was such as had been
    ' pursued by this and other similar Companies for years without accident, and was considered by those engaged in such business as safe and discreet, especially where it is proved that the injury was caused by an unexpected and wanton assault by a third person upon the team, by which it was frightened and rendered unmanageable, and while frightened and unmanageable ran over the plaintiff.
    2. The Company is not responsible for such act of such third person, though he may have been at the time employed by it in some capacity, he not being at the time of such act actually attending to any business for which he had been employed, or acting in any matter in behalf of the Company.
    (Before Bosworth, Oh. J., and Hoffman and Moncrief, J. J.)
    Heard, December 8th;
    decided, December 31st, 1859.
    In each of the two cases of John Weldon, plaintiff, against the New York and Harlem Railroad Company, defendants, and John Weldon and Wife, plaintiffs, against the same Company, the defendants appeal from an order denying a motion for a new trial.
    The evidence was the same in the one action as in the other. The plaintiff and his wife, on Sunday evening,.December 21, 1856, while crossing Fourth avenue in New York city, between 27th and 82d streets, were run over by a span of horses belonging to the defendants, and then in charge of their driver, who was taking them from 27th street, where he had detached them from a car lie had been driving, to the stables of the Company.
    Reardon, the driver, was at the time riding one of the horses, and while thus taking them to the stables, one Butler, who had previously been employed by the Company as an extra man in the stables, struck the horses, frightening and making them unmanageable, by reason whereof they ran over and injured John Weldon and his wife. One action is brought to recover damages for injuries to the husband; the other to recover damages for injuries to the wife.
    Each plaintiff recovered a verdict, and in each case the defendants moved for a new trial. The motions were denied, and from the orders denying them the defendants appealed to the General Term. The two appeals were argued together. The evidence, as it was viewed by the Court, is succinctly stated in its opinion.

      0. W. iSandford,, for appellant.
    <?. Dean, for respondents.
   By the Court—Bosworth, Ch. J.

In these actions the evidence is the same in the one as in the other. In each the plaintiff obtained a verdict. In each the defendants moved for a new trial, on the ground that the verdict is against evidence, and that motion was denied. From the order denying it the defendants appealed to the General Term. The only question is, whether the verdict is so clearly against evidence that it is the duty of the Court to set it aside for that cause. The plaintiffs were run over, in the evening of the 21st of December, 1856, while crossing Fourth avenue, by a span of horses owned by the defendants, and at the time in charge of their driver.

The horses had been attached, in the afternoon of that day, to one of the short cars of the plaintiffs, running between 27th street and the Astor House, and had been detached from the car at 27th street, shortly prior to the accident, and the driver was, at the time of the accident, riding the off horse. The two horses were harnessed together, having between them the pole which is attached to the car when it is in use, and the whiffletrees were attached to the pole, and one end of the pole in the rear of the horses’ feet was on the ground. There was no negligence or mismanagement on the part of the driver, unless "it was negligence or mismanagement to go through the streets of the city with a span of horses as these were taken,

The driver was in the act of taking the horses from 27th street to the stable, which was in a street a short distance further up town.

The accident, was caused by a man by the name of Butler, who suddenly ran into the street and struck the off horse and continued to strike him until he was so frightened that the span moved so rapidly as to get out of Butler’s reach. Being thus frightened, they became unmanageable and ran over the plaintiffs.

Upon the question whether it was negligence or. mismanagement to drive a harnessed team through a street of the city in the manner and condition that this was, the evidence is uniform and uncontradicted that this method had been practised for years by this Company, and by the Hudson River Railroad Company, and that no accident had resulted from it: All the witnesses who had any practical experience in driving teams' thus harnessed, concurred in .opinion that, this method: was appropriate and safe, and less likely to result in-accidents .than an attempt to drive the. team walking behind or by the side, instead of riding-one of the horses,.

. On the, evidence before us,.we deem the conclusion just that the injury to the plaintiffs was caused by the misconduct of Butler ; that the mode practised to.drive and-manage the horses was not an act of negligence, and that the evidence resulting from the practice of it for years, shows- that it was a safé course, and one not fraught, with any danger ,of accident, from any causes which it was the..defendants' duty to anticipate ■ and provide against.

There is some, evidence that Butler had been employed by the defendants, prior to this time, in some subordinate capacity in or about their stables. "Whether he was or was- not employed by "them .at the time of the casualty, the evidence is not. definite.

There is no ground for pretending that at the time he struck one of these horses he was engaged in any actual service in behalf of the defendants, or in any business which- concerned them. . •

His misconduct was an act of wanton or thoughtless mischief, for the consequences of which the defendants (as the evidence now stands) are not responsible.

We cannot avoid the conclusion that the jury attached an undue importance to the fact that Butler had been and perhaps was, at the time, an employee of the defendants, although not at the time acting in the scope of his employment, or in fact attending to any business which concerned them.

Reluctant as we are to disturb the verdict of a jury upon a mere question of fact, yet we regard these verdicts as so entirely without evidence to support them, that it is our duty to grant a new trial.

The verdicts must be set aside, and a new trial granted, on payment of the costs of the trial, including the costs of perfecting the judgments. The costs of the appeals must be costs in the cause, and abide the event.

Ordered accordingly.