
    Columbus Dry Goods Company, Respondent, v. Globe and Rutgers Fire Insurance Company, Appellant.
    First Department,
    February 3, 1911.
    Insurance — renewal of policy — issuance of policy by another agent — when insurei liable on policy as first renewed.
    Where, prior to the expiration of a fire insurance policy, the insurer’s agent in the city of New York executed a “ binder” effecting a renewal of the policy, which was accepted by the insured, the insurer is liable for its proportionate share of a subsequent loss on all property covered by that policy, although another agent representing the insurer in another State where the property was located, having represented that even if the policy were renewed through the New York agent it would have to "ccme to'him for signature, delivered a new policy on the date that the old policy expired, which did not cover as much property as was covered by the old policy renewed by the “binder,” where there is no evidence that it was accepted by the insured as a compliance with the obligation of the insured to renew the former policy.
    Evidence examined, and held,-sufficient to sustain a finding that the policy issued by the foreign agent was not accepted by the insured as a renewal of the former policy.
    The insurer by issuing the additional policy, even if it were accepted by the insured, cannot contend that there was more insurance on the property than the parties intended, where there was no restriction on the amount of insurance ■ the insured could take. The second policy, if binding, simply relieved the othei insurance companies from, part of their obligation to the insured.
    Scott and Clarke, JJ., dissented, with opinion.
    Appeal by the defendant, the Globe and Rutgers Fire Insurance Company, from a judgment of the Supreme. Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 20th day of May, 1910, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 24th day of May, 1910, denying tlie defendant’s motion for a new.trial made upon the minutes.
    
      Charles D. Cleveland, for the appellant.
    
      Chester A. Jayne, for the respondent.
   Ingraham, P. J.:

The plaintiff is a corporation organized under the laws of the State of New Jersey and operated and maintained a store in the city of Columbus, O.. The defendant is an insurance company organized under the laws of the State of New York. The plaintiff had, among other insurance upon its property in Columbus, O., two policies issued by the defendant for $2,500 each. Policy No; 222,243' was dated March 2, 1904, was to continue for one year from the 11th of March, 1904, to the- 11th of March, 1905, and covered “ store and office furniture, fixtures and furnishings, counters, shelving, show cases ” and other personal property in “ the five-story-an.d basement brick, metal, roofed building, situate and known as Nos. 168 to 178 North High Street, Columbus, Ohio.” This insurance expiring on the 11th of March, 1905, a representative of Messrs. Weed & Kennedy, insurance brokers in the city of New York and who were plaintiff’s agents, took to the office of the company what was called a “binder” to obtain a renewal of this insurance. Before the lltli of March, 1905, when this policy then upon the plaintiff’s property expired the representative of the defendant in charge of the defendant’s business signed this binder thereby accepting a renewal of this policy No. 222,243, for $2,500. This was some days before March 11,. 1905. This binder provided: “The undersigned accept the above and make the same binding from foregoing written date, subject to conditions of Policies issued by respective companies.” And on that was written “ G." R. [defendant company] Amount 2,500 Accepted J. IT. P.,” who was James II. Perry in the employ of the defendant, and it is not disputed but that he had authority to accept insurance. At or before the time this binder was signed a formal application for a renewal of policy No. 222,243 was delivered to the defendant and it is on this application that the binder was signed. No. notice was given to Weed & Kennedy or the plaiiitiff that the defendant refused to renew this policy until after the fire, which occurred on the 24th-of March, 1905. On May 15, 1905, the plaintiff submitted proofs of loss claiming $1,678.52, stating-that the amount - of property damaged by the fire on March 24, 1905, was $24,000, the total amount of insurance on the property including the policy in question was $35,745, and the proportion of loss to the. defendant under this'policy was, as before stated, $1,678.52.

Upon these facts, it is not disputed but that the defendant would have been liable Upon this policy. The defendant’s defense to this claim is based on the following 'facts: At the time in question the defendant had an agent in Columbus, O., who had authority to issue policies of insurance. About a week prior to March 11, 1905, the defendant’s agent in Colunibus called upon the plaintiff and told its manager that he wssHlie agent of the defendant in Columbus; that the plaintiff haWa policy expiring on the eleventh of March that had formerly been placed in New York, and that he, the agent, would ^like to have the privilege of writing the business himself. The .ihauager told the defendant’s agent to come back on March eleventh, and on that day the defendant’s agent had another conversation with the manager. He then called the manager’s ¿attention to the fact that this- policy expired at noon of that day; that the plaintiff also had another policy expiring in April which policy the agent would also like to take care of, and the manager then instructed the agent to write up two policies to take the place of those expiring. The manager stated that this business had been placed by Weed & Kennedy, of New York, and they rather expected that they would renew the business in New York, when the agent told the manager that even if they did renew it in New York it would have to come to the Columbus agent of the defendant for signature, and the manager then directed the agent to “write the business.” On the agent’s return to his- office before noon he had a new policy written out and mailed it to the plaintiff. This policy of insurance was numbered 256,463 and was introduced in evidence. It did not purport to be a renewal of any other policy, and did not cover the fixtures and other property that was covered by policy No. 222,243 which expired on the eleventh of March and which had been renewed by the defendant at the request of Weed & Kennedy in New York. The premium on this policy issued on March 11, 1905, issued in Columbus, was paid.

The defendant’s agent in New York testified that he signed this binder some days before March eleventh, so that at the time of these occurrences in Columbus the defendant had absolutely accepted a renewal of policy No. 222,243, which, as before stated, insured the office furniture, fixtures and furnishings. That, it seems to me, was a completed transaction which renewed that policy. The policy issued by the defendant, in Columbus on March eleventh was not in form a renewal of policy No. 222,243 ; did not cover the same property, and it., seems to me was clearly not the policy of insurance that the parties as between themselves had agreed to make, namely, a renewal of policy No. 222,243 covering the fixtures. What both the plaintiff and defendant undertook to do was to renew policy No. 222,243. That wás^accomplished by this binder which was signed in New York and'W|iich then became an actual existing obligation of the defendant. ^ After this was signed and the renewal of policy No. 222,243. had become an accomplished fact the defendant’s agent in Columbus asked the plaintiff in Columbus, without any communication wiifii the defendant in New York, to place the insurance through him\ and sent to the' plaintiff a policy of insurance which undoubtedly was expected would take the place of policy No. 222,243 which expired on the eleventh of March. It did not," however, take the place of that policy and was not, therefore, a compliance with the obligation of the defendant to issue a policy in renewal of policy No. 222,243. There is no evidence that it. was accepted by the plaintiff as a compliance with the defendant’s obligation to issue a renewal of that policy. It seems to me that if the new policy issued on March 11,1905, in Columbus, O., was issued by mistake the defendant could have repudiated that policy and might not have been liable on it. Assuming that the fact that its agent in Columbus issued a policy which was not a renewal of the policy which the- defendant agreed to renew; which covered different property; which was.not a compliance with the obligation it had undertaken in New York some days before to renew policy No. 222,243, was sufficient to justify the defendant in rescinding that policy as issued under a mistake of fact) it was not a defense to the obligation assumed by the defendant in the execution of this binder to renew the policy covering the fixtures which but for a renewal of that policy was not covered by insurance. Assuming, however, there was a question of fact as to whether this policy issued in Columbus, O., was accepted as a renewal of policy No. 222,243, the court submitted that question to the jury and at the request of the defendant charged that the sole question for them to detérmine was whether the policy issued and delivered to the plaintiff by the agent of the defendant at Columbus on March 11,1905, was intended to be a renewal of the former policy or new business; that if they found, that the policy was a renewal they should find for the defend, ant. The court further charged the jury at the request of the defendant that if the policy delivered on March 11, 1905, was intended to be a renewal of the former policy the jury must find for the defendant, and this instruction was repeated in several requests which were presented by the defendant and charged. The jury found a verdict for the plaintiff and thus found that the policy delivered in Columbus was not issued as a renewal of policy No. 222,243 and was not received by the plaintiff as such a renewal, and if this finding was sustained by the evidence, which I think it was, it seems to me there can be no doubt but that the plaintiff was entitled to recover.

It is stated that by reason of the fact that the defendant issued this additional policy in Columbus for $2,500 there was more insurance on the property than either party intended. It does not seem to me, that this necessarily follows. There was no restriction on the defendant as to the amount of insurance that it should take upon this .property. The loss was less than the amount covered by the insurance on the property and' it made no difference to the plaintiff whether this policy issued by the defendant in Columbus was accepted as a valid policy of insurance or not for it was fully covered on its stock by the other insurance. Accepting as valid the policy issued Oil March 11, 1905, in Columbus, simply relieved other insurance companies from part of the obligation to the plaintiff under their policies. The continued existence, however, of policy No. 222,243 was essential to the protection of the plaintiff, as but for that policy its fixtures were not insured. The plaintiff was bound in its proof of loss to the various insurance companies which had risks upon its stock to state the facts in relation to the policy issued in Columbus, and the fact'that the defendant accepted the obligation under that policy certainly sho*uld not estop the plaintiff from enforcing this policy on its fixtures. If the defendant had repudiated the policy issued in Columbus on March 11, 1905, then the insurance could have been ad justed so that the other companies could have been compelled to pay the total amount of loss. As before stated, it was entirely immaterial to the plaintiff whether the defendant admitted liability upon that policy or repudiated it. When the policy of March eleventh was actually issued there was nothing said about the amount of insurance on the stock and fixtures and nothing was said on the question as to whether or not there should be an increase of insurance. Flor does-it anywhere appear that the plaintiff was ever notified that the limit of insurance which the' defendant would place upon its property was $5,000. This binder in suit was also included in the list of . insurance furnished to the adjusters and upon which the adjustment was made and before any word came from the defendant repudiating the obligation under this binder, the adjustment with all the' insurance companies had been made and the amount for which each insurance company was liable had been accepted. The result is that if the defendant succeeds in this defense the plaintiff will lose a portion of the insurance which it supposéd it had upon the premises and which loss could have been avoided if the defendant had promptly repudiated the Columbus policy.

We think, therefore, that the verdict of the jury was sustained by the evidence and the judgment and order appealed from should be affirmed.

Laughlin and Miller, JJ., concurred ; Clarke ánd Scott, JJ., dissented.

Soott, J. (dissenting):

Defendant appeals from a judgment entered upon a verdict, and - from an order denying a motion for a new trial.

The circumstances of the case are peculiar, and the net result will be, if this judgment be finally affirmed, that the plaintiff will have recovered upon three contracts of insurance for $2,500 each, although it did not intend to take out, and the defendant did not intend to* issue more than- two contracts, and neither party knew or understood or believed, when the loss occurred, that more than two contracts had been entered into. The plaintiff owns a dry goods store in Columbus, O. Prior to the year 1905 the defendant, whose office is in the city of Flew York, had carried insurance to the extent of $5,000 upon plaintiff’s property in Columbus. This insurance was represented by two policies, one of which, for $2,500 and hereinafter referred to as Policy A, covered plaintiff’s stock, and the other, also for $2,500, hereinafter referred to as Policy B, covered plaintiffs furniture and fixtures. Policy A, covering the stock, expired April 7, 1905, and Policy B,-covering the furniture and fixtures, expired on March 11, 1905. It had been plaintiffs custom to intrust the taking out and renewal of its insurance to the firm of Weed & Kennedy who were insurance brokers in the city of Hew York.

Sometime prior to March 11, 1905, defendant’s local agent in Columbus applied to plaintiff to permit him to renew the two policies above referred to, which after some demur, plaintiff consented to. Accordingly on March 11, 1905, the day on which Policy B expired, defendant’s Columbus agent made out two new policies which were sent to and received by plaintiff and retained by iti These new policies were undoubtedly intended as renewals of Policies A and B, but, probably by mistake, the insurances were transposed. A policy, hereinafter termed Policy C, was dated March 11, 1905, and so written as to cover plaintiff’s stock, although the former policy upon stock did not by its terms expire until April 7, 1905. A policy, hereinafter termed Policy D, was dated April 7, 1905, and so written as to cover plaintiff’s furniture and fixtures, although the former policy upon furniture and fixtures expired by its terms on March 11, 1905. The.result was that plaintiff was insured on its stock for $5,000 until April 7, 1905, and until that date was uninsured, by this defendant, as to its furniture and fixtures. It is reasonable to assume that this result flowed from some mistake, but whether that mistake was the fault of plaintiff or of defendant’s local agent it is impossible to say, and is probably immaterial. At all-events.the plaintiff, as has been said, accepted and retained the new policies, and, later on,' when a loss had. occurred, made proofs of loss and accepted payment under both policies covering the stock, viz., Policies A and G.

While these transactions were taking place in Columbus, Weed & Kennedy in Hew York, a few days before March 11, 1905, applied to defendant at its main office for a renewal of Policy B, and received what is known in insurance parlance as a “ binder,” being a memorandum to the effect that the company has agreed to issue a policy. Ordinarily a “binder” becomes effective at once, and the property is deemed to be insured from the moment the binder is issued, standing in place of a policy until a formal policy is actually issued. When a “ binder ” is issued,, as in this case, as evidence of an agreement to renew an outstanding policy, it manifestly becomes effective, as a contract of insurance, only upon the expiration of the former policy, just as a formal renewal policy would become effective only upon the expiration of the policy to be renewed. The effect of the “ binder ” in the present case was that the defendant agreed to renew Policy B on furniture and fixtures upon the expiration of that policy on March 11, 1905, so that the “ binder ” became effective as a policy of insurance, if' at all,- upon March 11, 1905, at the same time that Policies C and D were delivered to plaintiff in Columbus. The plaintiff having adjusted its loss and received payment under both Policies A and 0 now sues for the loss on furniture and fixtures under the “ binder.” A fire occurred on plaintiff’s premises on March 24, 1905. Policy D covering furniture and fixtures, but which was so drawn as not to become effective until April 7, 1905, was surrendered and canceled. Plaintiff made proofs of loss and was paid under Policies A and C, both covering stock. It also made proofs of loss under the “ binder,” but these proofs were rejected and returned, and defendant’s adjuster refused to take part in the adjustment of losses oil the furniture and fixtures.

It is quite evident that this whole history comprised a chapter Of mistakes, commencing with the error in making out the policies in Columbus. It is clear that the new policies taken out there were intended to.be renewals of the former policies, and it is apparent that Weed & Kennedy had no intention of. taking out- additional insurance on the, furniture and fixtures, but meant merely to-renew the former policy, so that we have the case of an attempt in two ■places to renew the same policy. If the renewals had been accurately made in Columbus so that a new policy had -beenissued there covering furniture and fixtures and dated March 11, 1905, and Weed & Kennedy , at the same-time, and in ignorance of the Columbus renewal, had taken out a renewal “ binder ” in Kew York; it is probable that ho one would have contended for an instant that defendant had agreed to issue two policies of $2,500 each upon the furniture and fixtures, for it would be apparent that the case was one of two persons seeking to renew the same policy. This case seems to me to be identical in principle. When the mistake was made in the renewals of the policies in.Columbus, if it'was a mistake, the plaintiff undoubtedly could have had the mistake corrected. By its failure to seek a correction and by subsequently proving a. loss upon both policies, the old and the new, which covered the stock, it adopted the mistake and consented to the renewal of the policy expiring on March 11, 1905, on furniture and fixtures, by a policy covering stock. It was its duty to have notified its agents in Hew York that it had determined to renew the policies in Columbus, and the defendant should nob be mulcted because the plaintiff neglected this duty. Having elected to renew the policies inColumb.us the authority of the Hew York agents to effect the. renewal was necessarily revoked, notwithstanding they had not been apprised of the fact. The defendant’s liability, if it was liable, must rest upon contract, and it is essential to the validity of a contract that the minds of the parties shall have met. It is clear beyond contradiction, as it seems to me, that the minds of these parties never met upon the proposition that plaintiff should be insured upon three policies for $2,500 each.

The judgment and order appealed from should be reversed and a new trial granted, with costs to appellant to abide the event.

Clarke, J., concurred. , .

Judgment and order affirmed, with costs.  