
    SOLMS against THE RUTGERS FIRE INSURANCE COMPANY.
    
      Court of Appeals ;
    
      March Term, 1867.
    Parties in Action on Insurance Policy.—Mistake.—• Indorsement as to Payment oe Loss.
    The mistake of naming one who has no interest, as the insured in a policy of fire insurance, is cured by an indorsement, made by the secretary with notice of such mistake, stipulating that the loss, if any, is to be payable to a mortgagee named.
    A recovery may be had in the name of the real party in interest in such a case, for the indorsement may be regarded as a new contract of insurance with him.
    Whether the owner of property insured can recover, if the policy was, by mistake, made payable in terms to another person,—query ?
    
    Appeal from a judgment-.
    In 1856, Charlotte Quisse owned a house and some furniture, occupied and used by her, in Westchester county, upon which she desired insurance for four thousand dollars. She employed her husband, A. H. Quisse, to obtain such insurance, and gave him fifty dollars to pay the premium. The husband went to New York, and made application to the Stuyvesant Company for the whole amount of insurance, informing the company that it was to be insured for Charlotte Quisse, who own- d the property. The company agreed to make the insurance, and received from him the fifty dollars for the premium. The Stuyvesant Company, not wishing to assume the whole risk, applied to the defendants, who agreed to insure twenty-one hundred dollars of the amount.
    About a week afterwards, A. H. Quisse, the husband, called again, and the Stuyvesant Company gave him two policies upon the property, one for $2,100, executed by the defendant, and one for $1,900, executed by itself, both insuring A. H. Quisse, the husband, instead of Charlotte, the wife. A. H. Quisse did not know this, but spoke about there being two policies, when he expected but one ; but was assured defendant’s company was good, and that it was all right, and he took the policies.
    The mistake in the policies remained undiscovered by Charlotte and A. H., until Charlotte was called upon for additional security for the mortgages given by her, when she took both policies to Mr.' Thorne, the attorney of the mortgagees, who at once discovered the error, knowing that the title was in Charlotte, and informed her thereof, at which time she employed him to procure them to be corrected, and authorized him to have, in addition, the los - ses made payable to the respective mortgagees—the policy in question being intended for the benefit of Mary Entwistle. Thorn gaye the policies to a clerk to go to the offices and get them arranged in accordance with the wishes of Mrs. Quisse. The clerk proceeded with the policy in question to the defendants’ office, and presented the same to defendants’ secretary, and informed him that the property in question belonged to Mrs. Quisse, and that she wanted the loss, if any, made payable to Mrs. Mary Entwistle. The secretary indorsed on the policy the loss payable as requested, and returned the policy to the clerk, who received it, supposing it all right. The secretary made no verbal reply to the request of the clerk, and did nothing except as above stated.
    The property insured was afterward, and during the term of the policy, destroyed by.fire, and Charlotte Quisse and Mary Entwistle each assigned their claim to the plaintiff, who brought this action against the defendant for the recovery of the amount insured.
    Upon the trial the only question was whether a recovery could be had, for the reason that the insurance was to A. H. Quisse, the husband, and the title was in Charlotte, the wife. The cause was tried before a jury, and the judge, upon the plaintiff’s proofs, dismissed the complaint upon defendants’ motion, to which plaintiff excepted. Judgment was entered in accordance therewith, and after affirmance thereof by the general term of the superior court, the plaintiff appealed to this court. The decision of the superior court, which is now reversed, is reported in 8 Bosw., 578.
    
      Thomas Darlington, for the plaintiff, appellant.
    —I. Before and without reference to the transaction on November 7, 1856, when defendants’ policy was delivered to them for correction, a valid contract of insurance existed between Mrs. Quisse, the owner, and the defendants. (1.) Defendants, by allowing themselves to be offered by the Stuyvesant Company as one of the insurers to fulfill a contract already made, virtually offered to adopt that contract, and by the acceptance of that offer and the receipt of the premium, they actually became parties thereto, and occupied the same position as if they had contracted from the commencement. The time when they came into the contract is not material; from that time they were bound to the same party that had contracted with the Stuyvesant Company, viz : Mrs. Quisse. (a.) The original application to the Stuyvesant Company to insure Mrs. Quisse as owner of certain property for $4000, and acceptance and payment of the premiums constituted a valid contract of insurance. The property, interest, amount, and rate were all fixed, and the contract executed on the part of the assured. Had a loss occured that night, the Stuyvesant Company would have been obliged to pay it. This oral contract was determinable upon the delivery of a policy which should correctly express its terms in writing, and the assured corrld compel the delivery of such a policy (Kelly v. Commonwealth Ins. Co., 10 Bosw., 82 ; Angell on Ins., §§ 35, 68, and cases cited ; Whitaker v. Farmers’ Ins. Co., 29 Barb., 312). (5.) Defendants offered to the assured, through the Stuyvesant Company, to act as substitutes for the Stuyvesant Company, to assume part of their contract, (c.) By authorizing the Stuyvesant Company to offer their policy to the party to be insured, in substitution for the Stny vesant Company, in the contract of insurance already made, the defendants made the Stny vesant Company their agents for that purpose, and are bound by the acts of the Stny vesant Company in so doing. (cZ.) Even if any mistake existed (which the appellant denies), the defendants, as between themselves and the assured, are es-topped from setting up that they were misinformed as to the terms of the insurance they thus offered to assume. They cannot set up a mistake on their part after the owner has accepted and acted upon the faith of the only offer made to her. (3.) The defendants, if any misinformation was received by them, in relation to the insurance they intended to effect, received the same through their own agents, and are bound by communications made to the latter (McEwen v. Montgomery Co. Ins. Co., 5 Hill, 101 ; Sexton v. Same, 9 Barb., 191 ; Masters v. Madison Co. Ins. Co., 11 Barb., 624 ; Bunten v. Orient Ins. Co., 8 Bosw., 448).
    II. The acts of the defendants’ secretary, after information that Mrs. Quisse was the owner had been given him, cured any prior misunderstanding between the parties, or any defect in the policy, and rendered the contract between Mrs. Quisse and the defendants perfect.
    III. No acquiescence by the assured in a mere misdescription could affect the contract, and there was no such acquiescence in this case. Neither Mr. nor Mrs. Quisse could read the policy ; as soon as they discovered the error they sent to have it corrected, and Mr. Thorne and his clerk did not notice, from simple inadvertence, that the correction was not made in writing.
    IV. Hence the plaintiff was clearly entitled to relief in this action. If the policy sufficiently expressed the contract between the parties, the action was properly brought upon that instrument. If it did not sufficiently express that contract, the action was maintainable without regard to the policy, or the policy might have been reformed and enforced. (1.) The policy sufficiently expressed the contract. Falsa demonstratio non nocet (Greenl. on Ev., §§ 291, 301, and the cases there cited). (2.) If the policy does' not so express it, the oral contract is still in existence, and enforceable against them (10 Bosw., 82, before cited). (3.) Or, still regarding the policy as defective, it may be reformed and enforced, because it does not correctly set forth the contract it was intended by both parties to express ; and it makes no difference that the mistake urns not discovered until after a loss (Bunten v. Orient Ins. Co., 8 Bosw., 448 ; Carpenter v. Mutual Safety Ins. Co., 4 Sandf. Ch., 408 ; Lightbody v. N. A. Ins. Co., 23 Wend., 18.
    Y. Whatever relief plaintiff was entitled to, he should receive in this action. Relief is to be given consistently with the facts stated, although it be not the relief specifically demanded. It is unimportant whether the action was brought specifically to reform and enforce the policy, or to recover for the loss independently of the policy, or to enforce the policy without reformation. The amended complaint states fully the facts of the case, an answer has been interposed, and the court below was bound to grant the plaintiff any relief, legal or equitable, to which the proof of those facts showed him to be entitled (Code, § 275 ; Emery v. Pease, 20 N. Y., 62 ; New York Ice Co. v. Northwestern Ins. Co., 23 Id., 357; Marquat v. Marquat, 12 Id. [2 Kern.], 336).
    
      Livingston M. Miller, for the defendants, respondents.
    —I. The contract of insurance is personal, and no action can be maintained unless the assured had an interest at the time of the insurance (Barker v. The Marine Ins. Co., 2 Mas., 369 ; Graves v. Boston Marine Ins. Co., 2 Cranch, 419 ; De Forest v. Fulton Fire Ins. Co., 1 Hall, 84.
    II. The policy of insurance cannot be varied, but may be reformed upon due allegation and proof of either fraud or mistake, by which the party really insured was therein designated by a wrong name : in other words, it must be proved that Charlotte Quisse was the person with whom the defendants made their contract, and through the fraud or mistake of the defendants, they made a policy, which did not set forth their contract. This implies identification of the party, whom they undertook and agreed to insure with Charlotte Quisse. Of this there is no evidence whatever.
    III. There is no evidence whatever that the defendants ever agreed to insure Charlotte Quisse, or were requested to insure her, or ever heard of her, before making the policy, or would have been willing to issue the policy to her.
    IV. Neither the Stuyvesant Insurance Company nor the plaintiff’s witness, Burnett, were the agents of the defendants for any purpose. They were the agents of the plaintiff’s assignor.
    V. If they were in any sense such agents, they certainly were not agents to insure, and the utmost claimed by the plaintiff is that the Stuyvesant Company and Burnett had notice that Charlotte Quisse wanted to get insurance. It is not pretended that the defendants had any such information.
    VI. The indorsement of Nov. 7, 1856, simply made the mortgagee the appointee of the person insured, and did not change the nature of the contract (Grosvenor v. Atlantic Ins. Co., 17 N. Y., 391.)
    VII. The plaintiff’s assignor, Mary Entwistle, had full information of the nature of the policy, and her rights under it, when she accepted it with the indorsement of Nov. 7, 1856.
   Grover, J.

—The plaintiff showed no right to relief upon the ground that there was a mistake in making out the policy originally by the defendant. Although the evidence showed that the application made for insurance upon the property, to the Stuyvesant Company, by A. H. Quisse, was for insurance in behalf of Charlotte Quisse, the owner of the property, yet there was no evidence tending to show that any such application was made by that company to the defendants, nor but that the defendants made the policy in strict accordance with, the application and agreement entered into. It is clear that no recoveiycould be had upon the policy as made, because A. EL QítíS'lé was the party thereby insured, and he had no interest in the property, either at the time of making the insurance, or at any time thereafter, and consequently had sustained no loss, and therefore had no claim for indemnity.

The ground entitling the plaintiff to relief, if any, was the presentation of the policy to defendants’ secretary, by the clerk of Thorne, the clerk at the time informing the secretary that Charlotte Quisse owned the property, and wanted the loss, if añy, made payable to Mary Entwistle. The secretary must be presumed to have understood this, as there was no contradictory evidence. The taking the policy, and making an indorsement thereon making the the loss payable as requested, without expressing any dissent to regarding the policy as a valid one in behalf of Charlotte Quisse, the owner, must be regarded as an agreement on his part to make a valid policy to her upon the property. The company had already received the premium for a valid insurance upon the property, to the amount expressed in the policy. It had executed and delivered a policy, supposed to be valid, but which, through mistake, probably of the Stuyvesant Company, was a mere nullity. This transaction with the clerk, unexplained, required the finding of an agreement by the defendant to insure Charlotte Quisse, the owner of the property, in consideration of the premium already received.

Whether the secretary supposed the policy was made to her originally, as the assured, and believed the remark of the clerk, that she owned the property and desired the loss made payable to Mrs. Entwistle, to show that the change in that respect was desired by the assured ; or whether, through inadvertence, the correction was omitted, does not appear, nor is it material. At any rate, the assent of the secretary to an agreement to insure Mrs. Quisse does appear.

It is well settled that an agreement by parol to insure, and to make out a policy, when the terms are all understood, is binding upon the insurer, and will be enforced in the courts. In this case, I think, this agreement of the secretary was a valid contract, binding upon the company, and that, as the evidence stood at the time of' the motion to dismiss the complaint was made, the plaintiff was prima facie entitled to recover. The judge , therefore, erred in dismissing the complaint.

The judgment should be reversed, and a new trial ordered.

Hunt, J.

—This was an action brought in the superior court of the city of Yew York, by the plaintiff, as assignee of Mary Entwistle and Charlotte Quisse, to recover for a loss by fire. In April, 1856, Charlotte Quisse, who was the owner of the property insured, sent her husband, A. H. Quisse, to Yew York, to procure an insurance upon the property, and gave him the money with which to pay the premium. He applied to the Stuyvesant Insurance Company, informed them that the property was his wife’s, that she wanted it insured for $4,000, and that she had sent him with $50 to get the insurance. The company accepted the risk, and received the money: the policy was to be afterwards delivered. The next day one Burnett, who was an insurance broker both for the Stuyvesant Company and the defendants, and in the employ of both for the purpose of procuring applications and negotiating policies, and who acted for the defendants in this respect in procuring the insurance in question, made a survey of this property, at the request of the Stuyvesant Company. Burnett knew that the property was owned by Mrs. Quisse, and on this occasion was informed that the insurance was desired for her; as both Mr. and Mrs. Quisse testified. Burnett testified that Quisse said he wished the insurance in his own name. Before the policy was issued, Burnett, with the assent of the Stuyvesant Company, informed the defendants of the application, who agreed to take half the risk, and paid Burnett for procuring the insurance. The name of the person insured was written “A. H. Quisse,” in both policies. About a week elapsed before the delivery of the policy. The Quisses, were Germans, and ignorant. On the 7th of November the error in the policies was discovered, and a clerk was sent from the office of an attorney to inform the companies of the error, and to procure a memorandum of correction, and that the loss was to be payable to the mortgagee named. In the case of the Stuyvesant Company, the memorandum was correctly made. Upon the policy of the defendants, the memorandum was made in these words: “Nov. 7, ’56, loss, if any, payable to Mary Entwistle.” The evidence was uncontradicted that the company was at the time informed of the error in the name of the party insured. On the 24th of December the property was destroyed by fire. Afterwards, Charlotte Quisse assigned all her interest in the policy to Mary Entwistle, and the latter assigned to the plaintiff. At the close of the testimony, the defendants moved for a nonsuit, which was granted, and the judgment thereon was affirmed at the general term of the first district. The plaintiff appeals to this court.

I think the judgment is erroneous. Mrs Quisse paid to the defendants her money for an insurance upon her property. The defendants received her money, intending so to insure her, and supposing they had insured her to the amount of $2,100. If they had any knowledge of the error, and intended to receive or to retain her money, allowing her to suppose that she had a valid insurance, when they understood it to be otherwise, they were guilty of a fraud which will afford them no protection. That the mistake of the name was a mere mistake, and that it was the mistake of the defendants’ agent, Burnett, was proven by the testimony of both Mr. and Mrs. Quisse. On a non-suit, all disputed facts are to be assumed in favor of the plaintiff. This is, therefore, to be assumed as the true state of the case. Burnett knew that the property was that of Mrs. Quisse, and was informed, while examining-the same on behalf of the defendants, that the insurance was desired in the name of Mrs. Quisse. The defendants knew, not only what the property was, its nature and character, "but knew who made the application, and who was the party desiring the insurance. The knowledge of their agent was the knowledge of the defendants (McEwen v. Montg. Co. Ins. Co., 5 Hill, 101 ; Masters v. Mad. Co. Ins. Co., 11 Barb)., 624 ; Bunten v. Orient Ins. Co., 8 Bosw., 448 ; affirmed court of appeals, not reported). I think all these circumstances establish a contract on the part of the defendants with Mrs. Quisse, and that if the property had been destroyed, intermediate the receipt of their portion of the premium, by the defendants, and the issuing of their policy, the defendants would have been liable to her for the $2,100. The evidence of Mr. Quisse, who testifies that he made the application to the company in that form, and of Mr. and Mrs. Quisse, who testify that they so informed the defendants’ agent while he was ex amining the premises, and the retention of the money by the defendants with that knowledge, gave all the essen tials of a valid contract of insurance in favor of the party so applying and paying (Kelly v. The Com. Ins. Co., 1 Bosw., 82; Whitaker v. Farmers’ Ins. Co., 29 Barb., 312 Angell on Ins., § 35, and cases cited ; Johnson v. Talman, in court of appeals, not reported).

The transaction which took place when the error was discovered, I think also relieves the case from its difficulty. It is not pretended that there was any error in the character of the risk, the amount of the premium, or, at that time, in the name of the individual to be insured. The defendants were distinctly informed that there was an error in the name of the party insured-; that it should be Charlotte Quisse, instead of A. H. Quisse ; that the former was the owner of the property; and they were desired to correct it, or to make a suitable memorandum upon the subject. They made a memorandum, consenting to the assignment desired, but containing nothing on the subject of the erroneous name of the person insured, and handed back the policy. It was distinctly proven that they were informed of the error at this time. What was the intention, and what was the legal effect of this return of the policy, with a consent indorsed that the loss should "be paid to Mar/ Entwistle ? The intent could. honestly be no other than to redeliver the policy after this information, and to insure anew the property described. If the defendants can be supposed to have reasoned with themselves that “ there was an error, we will say nothing about it, we will keep the premium and avoid a liability if a loss should occur,” the well-settled principles of law and morality would compel the indemnity to the party claiming. The defendants will be compelled to perform the contract, as they allowed the other party to understand it, and to suppose that they understood it. I doubt not that the intention of the defendants, in returning the policy to Mrs. Quisse’s agent, uncorrected, after being advised of the error, was to reissue and redeliver the same, disregarding the error, and such was its legal effect. The act of the defendants was either a trick, unworthy of a respectable company, or it was a statement to Mrs. Quisse that she might regard her policy as valid notwithstanding the error, and that if any loss occurred, it should be paid to Mrs. Entwistle in the same manner as if the correct names were there inserted.

On this point, the argument in the court below was to the etfect that these acts were only proof, either that the defendants did not understand that any request was made to them to alter the policy, or if they did so understand it, they refused it, as they had a right to do.

The evidence was distinct that the request was made to the secretary of the" company, and there was no pretense, in fact, that it was not understood. If the secretary had so testified, a question would have been presented for the consideration of the jury, and, if they had found with the defendants on that question, it would have ended the point. Neither is it just to say that, if they did understand it, the company refused the request to make the alteration, as they had a right to do. On the contrary, they assumed to grant it, allowed and induced the assured to understand that the matter was entirely ■satisfactory to them, and never intimated a refusal or dissatisfaction, until called upon to make good the loss. If they had refused the correction, the assured could have supplied the want of a new insurance. They did not, however, refuse, and cannot now justify themselves on that ground.

I think a new trial should be ordered.

Judgment reversed, and new trial ordered.  