
    Isaac S. Israelson, Respondent, v. Harry Pushae Williams, Appellant.
    Second Department,
    February 11, 1915.
    ^Principal and agent — fire insurance agent — negligence — failure to notify insurer of prior insurance — liability of agent — settlement of prior action by principal.
    A fire insurance agent employed to negotiate a policy who, having knowledge that his principal’s property is already insured, procures and delivers to his principal another policy containing a clause that it is void in case of other insurance not expressly permitted in the new policy, is guilty of negligence and hable to his principal, or his assignee, for the resulting loss.
    The failure of the principal to examine the policy delivered by his agent and discover the defect does not exonerate the agent, or constitute a waiver of his claim, for waiver can only exist where there is knowledge on the part of the person making the waiver.
    Although the principal having brought suit on the policy against the insurer, discontinued the same and accepted a small sum paid by the insurer to “ buy peace, ” the transaction did not inure to the benefit of the agent, for he was not the agent of the insurer, if the money was not paid by the insurer in recognition of any liability and the amount received was deducted from the amount of the plaintiff’s claim against his agent.
    Appeal by the defendant, Harry Pushae Williams, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Queens on the 19th day of March, 1914, upon the decision of the court, both parties having moved for the direction of a verdict at the close of the case.
    
      Frederick W. Bitter [Emile E. Rathgeber with him on the brief], for the appellant.
    
      Adolph Feldblum, for the respondent.
   Per Curiam:

The defendant appeals from a judgment rendered against bim in an action tried in Queens county. The trial came on before a jury. At the close of the plaintiff’s case both sides rested and both made motions for a direction of a verdict, which was directed subject to the opinion of the court in favor of the plaintiff. Before a judgment was entered the case was reopened and further testimony taken and the trial was continued before the court alone, which made findings and directed judgment for the plaintiff. Exceptions thereto were filed by the defendant.

The theory of the plaintiff’s action is to recover damages for a breach of duty on the part of the defendant. The defendant was an insurance broker. The plaintiff’s assignor, Wilson, owned a house at Eastport, L. I. Wilson made application to Williams to negotiate a policy of fire insurance on the East-port property, and instructed him that there was already insurance on the property. Williams, the defendant, procured a policy from the Concordia Eire Insurance Company, and delivered it to Wilson. This policy, however, contained a clause that it should be void if there was any other insurance on the property at the time it was issued, unless such additional insurance was permitted - expressly. Wilson claims he did not know of this clause until after a fire took place and his house was destroyed. The plaintiff claims that the defendant became liable for the amount of the fire loss within the limits of the Concordia Insurance Company’s policy because Williams, the defendant, with full knowledge of the facts, negligently performed his duties as Wilson’s agent in negotiating that policy. Williams, the defendant, was called as a witness by the plaintiff. Wilson’s testimony is as to the application to Williams for a policy and what he directed bim to do. It appeared that Wilson brought suit on the policy against the Concordia Company, and that after some delay he discontinued this action and his attorneys received $250 from that company for the discontinuance of the action. The questions then before the court were, (a) whether Wilson had given the information as to other insurance to Williams; (b) whether Wilson had waived his rights against Williams by failing to examine the policy delivered by Williams; (c) whether Wilson’s action against the Concordia Insurance Company and its discontinuance on terms did not exonerate Williams from any liability to Wilson. The court decided against Williams as to the first two questions, and reopened the case as to the third. It made a memorandum explaining its views on the entire case, especially the third question. After the additional testimony was taken it appeared that Williams was not the agent of the Concordia Company; that the Concordia Company had resisted liability; that the money paid for a discontinuance was not paid in recognition of any liability and no release was taken, but was paid to “ buy peace ” and, as the Concordia Company’s counsel termed it on the witness stand, as “blood money,” simply to cut off the expenses of numerous trips to Biverhead and the hiring of local counsel there. The court allowed a reduction of plaintiff’s claim to the extent of the $250 received from the Concordia Company.

The defendant’s contentions on this appeal are: (1) Wilson should have examined the policy when Williams gave it to him and discovered the defect, and that his failure to do so was negligence per se and exonerated Williams, his agent; (2) Wilson having kept the policy without complaining of it or rejecting it, waived his rights against the defendant. There are other points raised which are simply reiterations of these two in other forms of statement. Likewise it is urged that the judgment is against the evidence.

The appellant cites many cases where, in actions between the insured and the insurer, it was held that an acceptance of an insurance policy by the insured, without • mutual mistake or fraud, bound the insured. Doubtless this contention is correct, if applicable to the case at bar. Here, however, the action is not between the insured and the insurer, but between the insured and his own agent for a breach of duty to fulfill instructions. The respondent cites a number of authorities to the effect that Wilson had the right to rely upon a presumed obedience to his instructions on the part of * his skilled agent, and was not negligent in taking steps to investigate the matter. We think the respondent is right on this point. Nor, as we think, do the facts show any waiver on the part of Wilson, for a claim of waiver must rest upon knowledge on the part of the person said to have waived, and that element is absent here.

As to the .weight of evidence, it is plain that the trial court gave great care to this case. (Vide mem. supra.) The transaction between Wilson and the Concordia Company did not inure to the benefit of Williams. He was not the agent of that company, but Wilson’s agent. The money was not paid in recognition of any liability.

The judgment should be affirmed, with costs.

Jenks, P. J., Thomas, Carr, Stapleton and Putnam, JJ., concurred.

Judgment affirmed, with costs.  