
    HAZLETT VS. THE ALLEGHENY INSURANCE CO.
    Where the oharter of an insuranoe company requires the insurance contracts to be in writing, a verbal contract is not binding on the company.
    Error to Common Pleas of Allegheny County, No. 180 October and November Term, 1873.
    This was an action on the case to recover for the loss of the steamboat “Carrie,” on a verbal contract of insurance. Hazlett called at the office of the insurance company and desired to get an insurance on the freight list, if the same had not already been insured by another part owner in St. Louis. Plaintiff testified that he agreed to notify the company if other insurance had been effected. The insurance company’s officers testified that the risk was not to attach until notified that the other insurance was not effected. No premium had been paid. Hazlett proceeded to St. Louis and found that the steamboat had been lost and had not been previously insured. He then, after the loss notified the company, and subsequently brought suit. The charge of the Court was as follows:
    Gentlemen of the Jury: There is no doubt in my mind that a contract of insurance with contingencies connected with it, such as is claimed by the plaintiff, would be valid at common law, without there is some law prohibiting its taking effect, without being reduced to writing. For the present we charge you it is valid without being reduced to writing. The plaintiff claims this insurance was effected the second time he went to the office, previous to going to St. Louis, the understanding and agreement being that it was to take place immediately, and whether it was to continue depended upon what action had been taken by Mr. Kountz, who was managing .the affairs of the boat at St. Louis; if he had insured the interests of the party, then there was to be no contract, and oí that fact the plaintiff was to notify defendant if he received information while here, and if not, when he reached St. Louis.
    The allegation of the defendant is, this was not the agreement; that all these things took place with regard to the general matters, that thé parties were there, talked' about the rate of insurance, fixed upon the rate of premium, etc., and they generally concurred, but they say their understanding of the agreement was that this insurance was not to take effect immediately, but when they received notice as to how the matter stood with Mr. Kountz, and then, and not till then, was the risk to attach. In this case, although it may seem a very small matter, the difference is very radical, because if the theory of the defence is correct, the loss having occurred before any notice was given, and before the policy was to take effect, of course the plaintiff cannot recover. But if the contract was the other way, and the policy was to take effect immediately, provided Mr. Kountz had not insured, which it appears he had not, this policy would be outstanding at the time of the loss, and treating this notice as sufficient, which we shall do at present, the plaintiff would be entitled to recover.
    The points and the answers were as follows :
    plaintiff’s points.
    The Court is requested to charge to the jury,
    1. That if they believe from the evidence that the plaintiff on or about the 3rd day of April, 1868, applied to the Insurance Company, defendants, to insure one-fourth of the freight list of the steamer “Carrie,” then on a trip from St. Louis to Fort Benton on the Missouri river; that it was there and then agreed that the said company would take said risk, at the same, rate of premium that was charged by the Western Insurance Company for a similar insurance on'the same freight list in favor of Andrew Ackley; and that the said risk should take effect if Captain Kountz had not insured said freight list at St. Louis: that said Kountz had not so‘insured the said freight list, and that the said steamer was sunk on the said trip, and her freight whollj' lost; then they should find for the plaintiff, and their verdict should be for the amount of the insurance, less the premium shown by the evidence to have been paid by Andrew Ackley in the Western Insurance Company, together with the interest from the date of loss till date.
    Affirmed pro forma and question reserved.
    2 That in deciding whether to accept the story of the plaintiff or the defendants, the jury have a right to compare the probability of the two stories, and to consider whether it was likely that Captain Hazlett would have been satisfied with an arrangement that would have left him without insurance until he would get to hear from’St. Louis and send word back to Pittsburgh.
    Affirmed.
    3. That the law does not require, a contract of insurance to be in writing, nor does it require the payment of the premium .before the loss ; and that if the jury believe that Captain Hazlett insured his interest in the steamer’s freight list, on the same terms and conditions that subsisted between Andrew Ackley and tbi© Western Insurance Company, they should find for the plaintiff the amount of the insurance testified by plaintiff’s witness, less the amount of the premium, together with interest thereon till date.
    Affirmed proforma and question reserved.
    dependant’s points.
    1. That the alleged contract of insurance upon which the plaintiff seeks to recover, not being in writing or print, but being wholly verbal, was null and void, and there can be no recovery on-the cause. .
    Eefused proforma, and question' reserved, see plaintiff’s 3rd point.
    2. That under the plaintiff’s own evidence he was bound to give the defendant Company notice whether or not Captain Kountz had effected insurance at St. Louis, and this notice he was to give either before he left Pittsburgh or when he reached St. Louis; and having by his own testimony shown that he did not give such notice, he is not entitled to recover.
    Refused pro forma, and question reserved, see plaintiff’s 1st point.
    3. That the order which the plaintiff states he gave Capt. Kountz upon the defendant Company, and which said Kountz testifies he presented to said Company upon his return to Pittsburgh, was not such notice as the plaintiff was bound to give the defendant, according to his own version of the alleged contract.
    Refused pro forma, and question reserved, see plaintiff’s 1st point.
    May 19, 1873, verdict for plaintiff for $3,050.40, subject to opinion of the court on the question of law reserved.
    On September 19, 1873, the court entered judgment in favor of defendant on the reserved point in the following opinion per
    Stowe, J.
    The questions of law reserved in this case are raised by the plaintiff’s first and third points and by the defendant’s first, second and third points, and are :
    1st. Whether a verbal contract of insurance, such as specified in plaintiff’s first point, is binding upon defendant, and entitles plaintiff to recover in this action; and
    2d. Whether plaintiff having agreed, at the time the said contract was entered into, to notify the defendant either before he left Pittsburgh or upon his arrival at St. Louis, whether an insurance had been effected by Captain Kountz, the boat having been lost before plaintiff arrived at St. Louis, a draft or order on the defendant for the amount of the insurance money and a demand for it is a sufficient compliance with such agreement.
    Upon the first question, I think the law under the charter of defendant is clearly with defendant.
    Upon the second question, I am by no means free from doubt, but that the matter may come squarely before the Supreme Court, in case I should err upon the first question, I have concluded to rule it also in favor of defendant, and hold that a demand for the amount of policy, less premium, such as stated by plaintiff, was not sufficient notice as to whether Captain Kountz had insured at St. Louis, which plaintiff had agreed to give.
    Judgment is therefore directed to be entered for defendant upon both the reserved questions of law non obstante veredicto, upon payment of verdict fee.
    Hazlett then took a writ of error complaining of the judgment of the court below.
    
      George Shiras, Esq., for plaintiff in error
    argued that a verbal contract of insurance is binding; Hamilton vs. Lycoming Insurance Co., 5 Barr 339; Trustees vs. Brooklyn Insurance Co., 18 Barb 69; Carpenter vs. Safety Ins. Co., 4 Sandford Ch., 408. The company would still be liable on the agreement to issue the policy, though the statute requires the formal insurance policies to be in writing, &c.; Commercial Ins. Co. vs. Union Ins. Co., 19 Howard 321; Sanborn vs. Firemans Ins. Co., 16 Gray 448; New England Ins. Co. vs. DeWolf, 8 Pick 13; McCullough vs. Eagle Ins. Co., 1 Pick 278; Perkins vs. Washington Ins. Co., 4 Cowen 445; Walker vs. Ins Co., 56 Maine 371.
    This company could “make arrangements, and even parol promises, as to the terms on which a policy shall be issued,, so that a Court of Equity will compel the company to execute the contract specifically ; and where the loss has happened, to avoid circuity of action, the chancellor will enter a decree directly for the amount of an insurance for which the company ought to have delivered! their policy properly attested Constant vs. Allegheny Insurance Co., 1 Am. Law Reg., N. S., 119; same case 3rd Wallace 313. A corporation cannot avoid its contract by pleading want of compliance with the statute; Thornton vs. Western Ins. Co., 7 Casey 529; Washington Ins. Co. vs. Colton, 26 Conn. 42; Clark vs. Middleton 19 Mo. 53.
    
      M. N. Acheson and W. G. Hawkins, Jr., Esqs., contra.
    
    There was no verbal contract completed. No notice was given, prior to loss, which was a condition precedent. A condition precedent must be strictly performed; Thayer vs. Ins. Co., 10 Pick 323; Insurance Co. vs. Stauffer, 9 Casey 397; Hughey vs. Tindall, 18 C. B. 98; Bradley vs. Ins. Co., 3 Am. R. 121; Simpson vs. Ins. Co., 2 Wright 250; Insurance Co. vs. Johnson, 11 Harris 72.
    The company could not make a verbal policy of insurance ; for' by its charter it is subject to the insurance act of April 2, 1856, P. L. 211, the 10 Section of which is as follows:
    “That in execution of the several powers that may be conferred on such companies respectively, they are hereby empowered to make, execute, and perfect such contracts, bargains, agreements, policies, and other instruments as shall or may be necessary, and as the nature of the case may require ; and every such contract, bargain, policy and other agreement shall be in writing or print under the corporate seal, and signed by the President, or in his absence, inability to serve, by the Vice President, or other officer in that event designated by the by-laws, and shall be duly attested by the Secretary or other proper officer of the company, who may be in like manner designated.”
    A violation of this provision would work a forfeiture of charter; Act of April 2, 1856, Sect. 21. Both plaintiff and defendants are presumed to have known this; East Aughan R. vs. R. R. Co., 11 C. B. 175. The corporation can do- nothing except what is authorized by its charter; Bank of Penna. vs. Commonwealth, 7 Harris 144; Henning vs. Insurance Co., 4 Am. R. 332; Head vs. Insurance Co., 2 Cranch 127; Fowler vs. Scully, 22 P. F. S. 466. A contract in violation, of law is null; Bank vs. Owens, 2 Peters 528; Mitchell vs. Smith, 4 Dall 269; Metcalf on Contracts, 259.
   The decision of the court below, was affirmed by the Supreme Court, on October 19, 1874, in the following opinion:

Per Curiam.

This case turns on the terms of the reserved question, that being all that is before us. The question reserved was, whether a .verbal contract of insurance such as specified in the plaintiffs first point, is binding on the defendant, and entitles the plaintiff to recover in this action. Contracts of insurance are expressly required by the defendants’ charter to be in writing, under the seal of the corporation and signature of the President or Vice President. The point referred to in the reservation does not raise a question of estoppel. It is not averred that the premium was paid and that the plaintiff had no knowledge of the charter requirement, nor is notice to the defendant of non-insurance in St. Louis averred in the point, though it is set forth as part of the transaction that the insurance should take effect if Capt. Kountz had not so insured the freight in St. Louis. This implies it was not to take effect if he had insured there. Notice of non-insurance was therefore essential to fix the defendants finally for payment. There being no sufficient ground of estoppel alleged the case fell back according to the terms of the reservation upon the mere binding effect of a verbal contract for insurance, and this the charter answers in the negative. The second question does not arise.

Judgment affimed.  