Opinion
February, 1904.
Henry Melville, for appellant.
Philip Lindsley, for respondent.
The action was brought to recover the premium upon a policy of insurance issued by the plaintiff to the defendant on the 5th day of June, 1902, for one year. The defense was payment of the premium to one Carroll, the broker by whom the application for the policy had been made and to whom the plaintiff had delivered the policy, and who in turn delivered it to the defendant's broker in Ohio, where defendant then resided. After receipt of the premium by Carroll, less the commission deducted by the defendant's resident broker, Carroll absconded without making payment of said premium to plaintiff.
Upon the trial it was proved without contradiction that Carroll acted as broker in effecting insurance written by the plaintiff company in a great number of instances, and in each instance the plaintiff received through Carroll the amount of the premium, less his commissions, or where the premium was received in full, had paid the commissions to Carroll. It also appeared from the deposition of Mr. Elliott, the Ohio broker, that Carroll, the defaulting broker, had previously on other occasions done business with him on behalf of the plaintiff. Upon these facts, the justice below rendered a judgment in favor of the plaintiff, proceeding evidently upon the theory that Carroll was the agent of the defendant, and that payment by the defendant to him did not discharge its obligation to the plaintiff.
If credit was extended to any one, plaintiff extended such credit to Carroll. No demand was made upon the defendant for the premium, until sometime in November, 1902. Under these circumstances, not only did the plaintiff vest Carroll with such apparent authority as would have justified the defendant in paying him the premium, but the only inference properly deducible from the undisputed facts is that actual authority existed in Carroll to receive such premium on the plaintiff's behalf.
The case is distinguishable from Citizen's Fire Insurance Co. v. Swartz, 21 Misc. 671, in that it failed to appear in that case that the absconding broker had ever had any other transaction with the insurance company, than the one involved in the suit; or that it had paid or promised to pay him any commission, or had any acquaintance with him further than that arising from the negotiations concerning the one policy there involved. On the other hand, the case is more analogous to that of the Greenwich Insurance Co. v. Union Dredging Co., 14 Daly, 237, in which, in spite of a provision in the policy to the effect that if the premium be paid to any person or persons other than the duly appointed and authorized agent of the company, such payment shall be at the sole risk of the assured, a broker to whom the defendant had paid the premium was held the agent of the plaintiff, upon it being made to appear that the plaintiff kept a regular account with the broker, and that it extended credit to the broker, as evidenced by the giving of the policies to him for delivery.
We think that the justice erred in awarding judgment for the plaintiff.
Judgment reversed and new trial ordered, with costs to the appellant to abide the event.
FREEDMAN, P.J., and GILDERSLEEVE, J., concur.
Judgment reversed and new trial ordered, with costs to appellant to abide event.