
    Washington Belt et al., App’lts, v. The American Central Insurance Co., Resp’t.
    
      (Supreme Court, General Term, First Department,
    
    
      Filed December, 1893.)
    
    Insurance—Fire co-insurance.
    A change may be made in the co-insurance clause during the running of the policy, if authorized by the insured’s agent and ratified by himself.
    Appeal from a judgment entered on a decision of the special term.
    The defendant is a corporation organized under the Laws of the State of Missouri, and in July ‘ and August, 1892, Ackerman, Deyo & Hilliard were its general ag'ents in the city of Hew York, with power to bind it by contracts of insurance. During this period Brown & Skinner were insurance brokers in the city of Hew York, who were employed by the plaintiffs to procure insurance on their property. July 14th, 1892, the defendant, in consideration of $52.50, through Ackerman, Deyo & Hilliard, insured the plaintiffs’ wool, under policy Ho. 5,934,416, for one year against loss by fire in a sum not exceeding $5,000. Attached to the policy was a stipulation called an eighty per cent, co-insurance clause, of which the following is a copy:
    “ H. Y. Standard Percentage Co-Insurance Clause.
    “If, at the time of the fire, the whole amount of insurance on the property covered by this policy shall be less than eighty per cent, of the actual cash value thereof, this company shall, in case of loss or damage, be liable for only such portion of such loss or damage as the amount insured by this policy shall bear to the said eighty per cent, of the actual cash value of such property.”
    The policy, with the clause attached, was delivered to Brown & Skinner, the agents of the plaintiffs.
    Afterwards the plaintiffs improved the building wherein the property was stored, by reason of which they claimed that they were entitled to have the premium reduced, and on the 26th of August, 1892, their agents, Brown & Skinner, delivered this and other policies issued by Ackerman, Deyo & Hilliard to them for the purpose of having the premium reduced.
    On the delivery of the policy, Ackerman, Deyo & Hilliard delivered a binding slip, of which the following is a copy :
    “Hew York, August 25, 1892.
    “We, the undersigned insurance companies, do hereby insure Belt, Barber & Co. for the amount set opposite our respective names. Subject to the conditions of standard fire insurance policy of the State of Hew York. On stock of wool contained in 120 and 122 Wooster street, H. Y. City, as per policies left with companies for a reduction of the rate.
    “Binding this 26th day of August, at noon.
    “(This memo, to be void on delivery of policies at this office.)
    “Accepted. , Amount.
    “ Company.
    “ 593,416. American Central. $5,000.”
    August 27th, 1892, the property insured was burned. About ten days after the fire the policy was returned to Brown & Skinner, who delivered it to the plaintiffs. When returned it was indorsed as follows:
    “Aug. 22, ’92, rate reduced to 63 per cent, for improvements under slip Ho. 1,483, return premium $18.78 therefor.
    “A. D. & H.”
    The eighty per cent, co-insurance clause was detached and the following clause was substituted in its place:
    “ H. Y. Percentage Co-insurance Clause.
    “ If at the time of the fire, the whole amount of insurance on the property covered by this policy shall be less than the actual cash value thereof, this company shall, in case of loss or damage, be liable for such portion of such loss or damage as the amount insured by this policy shall bear to the actual cash value of such property.
    “Attached to and forming part of policy Ho. 593,416.
    “A. D. & H, Ag’ts,
    “(Signature for Company).”
    When the policy was returned, the binding slip was rendered to Ackerman, Deyo & Hilliard.
    On the 26th of October, the plaintiffs and the insurance companies interested agreed that the damage occasioned by the fire was $87,000. „
    On the 27th of October, 1892, the plainitffs verified and served upon the defendant proofs of loss, by ■ which they claimed $3,294.88, which the defendant, on the 7th of Hovember, 1892, paid, less a reduction for interest, and surrendered the policy, giving the following receipt:
    “$3,294.88. “Hew York City, Nov. 7, 1892.
    “ Received from American Central Insurance Company of St Louis, through Ackerman, Deyo & Hillard, agents, the sum of thirty-two hundred ninety-four and 88 100 dollars, in full settlement, compromise and discharge of all claims and demands for loss and damage -by fire on the 27th day of August, 1892, to the property by policy No. 593,416, Renewal No.--— issued at the agency of said company at New York city, and said policy is hereby surrendered and cancelled.
    “ Amount of loss............................... $3,294 88
    “Discount.................................... 32 94
    “Net draft..................................... $3,261 94
    “Belt, Butler & Co.
    “ W. H. Goldstein & Co.”
    The loss was adjusted upon the basis of a one hundred per cent, co-insurance clause, but had it been adjusted upon the basis of an eighty per cent, co-insurance clause the plaintiffs would have been entitled to receive $4,118.60, a difference of $823-72, to recover which sum this action was brought.
    
      William H. Hamilton, for app’lt; Michael H. Cardozo, for resp’t
   Follett, J.

When the policy was issued, the plaintiffs' agents knew that it had an eighty per cent, co-insurance clause attached, and what they knew the plaintiffs are deemed in law to have known. Knowing this, the'plaintiffs subsequently received the policy with the rate of premium reduced, a one hundred per cent co-insurance clause substituted, thereafter filed proofs of loss claiming on the basis of the one hundred per cent, co-insurance clause, were paid the full amount of their claim, and surrendered the policy. This, we think, amounted to a ratification of the substitution of the one hundred per cent, co-insurance clause, even if there were no previous authority to make the change, of which” there is some evidence in the case. The presumption arising from the evidence is that the change was either authorized or ratified. There was indorsed on the policy this memorandum:

“ 63 c.; Full Co-in. Cl.: Build, 65 : Stock, 10: Co. full clause.

The evidence tended to show that this indorsement was made by the clerk of Brown & Skinner before the policy was delivered to Ackerman, Deyo & Hilliard for a change of rate. If it were so made by the plaintiffs’ agents, it authorized the substitution of a full or one hundred per cent, co-insurance clause, for the eighty per cent, co-insurance clause. There is no evidence in the case which would sustain a finding that the change was secretly or fraudulently made. What negotiations, if any, were had between the agents which led to the reduction of the premium do not appear.

We think the evidence fails to establish a cause of action in favor of the plaintiffs, and that the judgment dismissing the complaint was right, and should be affirmed, with costs.

Yan Brunt, P. J., and Parker, J., concur.  