Sanborn v. Fireman's Insurance

82 Mass. 448

Opinion

Hoar, J.

Footnotes

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1. The first ground of objection to the verdict is, that a contract of insurance can only be made in writing. No principle of the common law seems to require that this contract, any more than other simple contracts made by competent parties upon a sufficient consideration, should be evidenced by a writing. No statute of Massachusetts contains such a requirement. Upon principle, therefore, we can find no authority in courts to refuse to enforce an agreement which the parties have made, if sufficiently proved by oral testimony. On the contrary, there are decisions which recognize contracts of insurance resting in parol. M’ Culloch v. Eagle Ins. Co. 1 Pick. 280. Kennebec Co. v. Augusta Insurance & Banking Co. 6 Gray, 204. Commercial Mutual Marine Ins. Co. v. Union Mutual Ins. Co. 19 How. 318; affirming S. C. 2 Curt. C. C. 524. Hamilton v. Lycoming Mutual Ins. Co. 5 Barr, 339. Some of the text writers, indeed, express a doubt whether valid insurance could be made, except in writing. Mr. Duer, in his treatise on insurance, remarks that “ in this country there is no statute in any of the states, that requires that the contract of insurance shall be in writing; and upon the principles of the common law, an unwritten, or in technical language, a parol agreement, is doubtless sufficient; but as the usage of a written contract has long and universally prevailed, it has probably acquired the force of law, and it is doubtful whether an action upon a contract, merely oral, would now be sustained.” 1 Duer Lis. 60. See also 1 Phil. Ins. § 8. In Smith v. Odlin, 4 Yeates, 468, Chief Justice Tilghman expressed a doubt whether a valid insurance could be made otherwise than in writing; and in Cockerill v. Cincinnati Mutual Insurance Co. 16 Ohio, 148, it was held that it could not.

But in 1 Parsons Marit. Law, 19, the opposite opinion is stated. In Sanford v. Trust Fire Ins. Co. 11 Paige, 556, Chancellor Walworth discusses the question without deciding it, the inclination of his opinion seeming to be in favor of the validity of the oral contract. And it was so held by the court of appeals in Trustees of First Baptist Church v. Brooklyn Fire Ins. Co. 19 N. Y. 305. It is not easy to see the force of the reasoning which would infer, that, because parties usually make their contract in one way, it would be void when they choose to make it in another, equally good at common law*, and not prohibited by any statute. In determining whether, in any case, a complete and perfect contract had been made, the circumstance that a contract in writing was contemplated, and had not been executed, would certainly be entitled to a great weight. Real Estate Mutual Fire Ins. Co. v. Roessle, 1 Gray, 336.

2. The next objection is, that the defendants had no authority to make the oral contract declared on, because they were by their charter authorized only to make contracts by the signature of their president or of such other person as their rules and by-laws should direct. The case chiefly relied on to support this position is that of Head v. Providence Ins. Co. 2 Cranch, 127. But while the principle which that case declares, that a corporation, being the mere creature of law, can have no powers but such as are derived from the act which creates it, is undoubtedly a sound one, the application of the principle has been very much modified in other cases. Bank of Columbia v. Patterson, 7 Cranch, 299. Mechanics’ Bank of Alexandria v. Bank of Columbia, 5 Wheat. 326. Bank of United States v. Dandridge, 12 Wheat. 69. New England Marine Ins. Co. v. De Wolf, 8 Pick. 56. Foster v. Essex Bank, 17 Mass. 497. Tayloe v. Merchants’ Fire Ins. Co. 9 How. 390. Commercial Mutual Marine Ins. Co. v. Union Mutual Fire Ins. Co. 19 How. 318. We cannot think that a provision in the charter of an insurance company, authorizing contracts authenticated by the signature of a particular officer, and without any words of restriction, should generally be' construed to limit the powers of the company, and to prevent them from making contracts within the ordinary scope of their chartered powers. On the contrary, the phraseology of those statutes respecting the execution of policies should be regarded as consisting simply of enabling words, not restraining the power which they confer to make contracts, of which the policies are the evidence. 19 How. 321, before cited.

3. The objection that the agent had only power to issue policies, and not otherwise to make contracts binding on the defendants, comes within the same rule of construction. His power of attorney authorized him “ to effect insurance,” and “ for this purpose to survey risks, fix the rate of premium, and issue policies of insurance, signed by the president,” &c. We are of opinion that this gave him authority to make the preliminary contract, as well as to issue the policy. He was not a special agent, employed merely to receive and transmit proposals to his principal, but had power to do whatever the company could do in effecting insurance; and it appeared by the evidence of the defendants that he was furnished with policies signed in blank, to be filled up and issued at his discretion.

4. We are of opinion that the contract was to be performed within a year, and is therefore not included in the provisions of the fifth clause of the Rev. Sts. c. 74, § 1. When time is spoken of, any act is within the time named that does not extend beyond it.

5. We think there was evidence, competent for the consideration of the jury, that the risk was to commence at the time the contract was made.

6. No authority is cited in support of the proposition that the omission to make an entry of a contract in a book kept by one party is evidence, in favor of that party, that no contract was made. Such an entry constituted no part of the contract, and the plaintiff had no knowledge of the habit of the defendants’ agent in that respect, and could not be affected by it. It was clearly inadmissible.

Judgment on the verdict for the plaintiff.

Hoar, J. sat through the rest of this term, and Dewey, J. did not sit again except as hereafter mentioned.