Fabbri v. Mercantile Mutual Insurance

The application to the defendant for insurance was for a sum not exceeding $10,000 in gold. The defendant signified its acceptance of the application by writing upon it “ binding. ’ ’ About the same time that this application was made, applications were made to other insurance companies, for insurances upon the same property, which applications were accepted in a similar way. The aggregate amount of insurance sought by the plaintiffs was $152,000, and was to cover a cargo then in progress of shipment. In neither case was the amount of risk which either company took definitely fixed. It was proved upon the trial, and the referee has found, that there had existed, and was then existing, between the plaintiffs and the several insurance companies referred to, including the defendant, a practice and course of dealing, in effecting marine insurance upon property belonging to" the plaintiffs, where the precise value thereof was hot known, at *93the time the application for insurance thereon was made, by which the plaintiffs were accustomed to make written applications, like those made in the instances referred to, being in different sums, and amounting in the aggregate to what the plaintiffs supposed might be the value of the property which would be at risk; and such applications were accepted and made binding for such indefinite sums, with the understanding that when the value of the property at risk should be ascertained, the amount so insured should be declared and apportioned, so that the amount insured by each should bear the same proportion to the property actually at risk as it bore to the aggregate of all the indefinite insurances thereon; and that after the amount had been so ascertained and fixed, a policy in the form then in use, was issued by the respective underwriters, for the precise sum so ascertained and adjusted as aforesaid.

It also appears, and the referee has so found, that the value of the property intended to be insured was not known to the plaintiffs, at the time said application was made.

It is not disputed by the defendant, that the contract created by the acceptance of the application, as explained by evidence of the practice mentioned, would render the defendant liable for a proportionate amount of the loss in this case, notwithstanding the clause of prior insurance contained in the policies used by it; and such, no doubt, is the rule of law. But the defendant contends that the evidence of the practice mentioned was inadmissible. We think otherwise. It is true the evidence did not prove any general usage; nor was it given for that purpose. It was given to show what was the actual contract between the parties to the action. And we think, within settled rules, it was not only competent, but absolutely essential for that purpose. (1 Duer on Ins. p. 263, § 57. Bourne v. Gatliff, *9411 Clark & Fin. 45. Bliven v. New York Screw Co., 23 How. 421. Allen v. Merchants’ Bank, 22 Wend. 215. Van Santvoord v. St. John, 6 Hill, 157.)

The defendant’s objection to the testimony of Hazen, even if well founded, would not warrant us in reversing the decision of the referee. There being sufficient evidence, without his testimony, to sustain the judgment, the error, if any, of the referee, admitting that testimony, was not injurious to the defendant. (The People v. Gonzales, 35 N. Y. 59.)

The judgment should be affirmed, with costs.