Samuel H. Hartshorne, Plaintiff and Appellant, v. The Union Mutual Insurance Company, Defendants and Respondents.
The defendants, an Insurance Company located in New York, executed and delivered to J. Day & Co., of Apalachicola, Florida, a Marine Policy, being in form a Cargo Policy, numbered 784,) by which they in terms, “ on account of whom it may concern, to cover only property which may be indorsed hereon, by said J. Day & Co., loss, if any, payable to the parties named in the certificate granted by said J. Day & Co., and subject to conditions contained therein, and not inconsistent with .the terms of this Policy, do make insurance, * * lost or not lost, at and from ports and places to ports and places, on cotton,” &c. $250,000 was written on the margin of the Policy as the sum insured! With this Policy the defendants delivered to J. Day & Co. blank certificates, to be issued to persons who might contract for insurance under the Policy; which certificates state that the person named in them, respectively, is insured by the defendants; and they also delivered to J. Day & Co. a let,ter of instructions, which states, inter alia, that said certificates are each of them considered by the defendants “ as representing a Policy issued by the Company itself.”
November 14. 1853, the defendants, by a written certificate of that daté, extended the sum insured'by Policy No. 784, an additional $250,000. On the 28th of October, 1853, the defendants issued a further policy, (numbered 993,) for $250,000 to J. Day & Co., in form like that numbered 784.
J. Day & Co. pasted the Policy No.'784 in a large book, (called their Policy Book,) entered in it the substance of each certificate issued' by them, and the fact and date of issuing it, and also the aforesaid certificate of renewal of Policy No. 784, and the further Policy No. 993. The risks attaching during each month under the certificates, as these amounts were ascertained, were entered in said Policy Book, and numbered consecutively as entered, in a column in which specific risks were also entered and numbered as entered.
On the 15th of November, 1852, J. Day & Co. issued to the plaintiff one of said certificates, indefinite as to amount, thereby insuring, under Policy No. 784, cotton to be shipped by persons, and at and from places named therein, consigned to the plaintiff. This certificate was renewed November 15, 1853, by an indorsement made thereon by J. Day & Co., (and entered in said Policy Book,) continuing the insurance until July 1, 1854. The cotton in question, which was covered by the terms and embraced within the insurance stipulated by the certificate issued to the plaintiff, was shipped on the 1st and 2d of February, 1854, and on the 3d was totally lost by the perils insured against. Early in February, 1854, it was ascertained that all risks taken from the commencement of the business, including specific risks, *539exceeded §750,000 in the aggregate prior to the time the cotton in question was shipped. This suit was brought to recover the value of the cotton shipped February 1 and 2, 1854, and the complaint was dismissed, on the grounds that J. Day & Oo. could not make valid contracts exceeding $750,000 in the aggregate, and that when the risks actually taken had reached that sum, all certificates of insurance previously issued became inoperative and void. On appeal it was held:
1. That the certificate so issued to the plaintiff was the contract of the defendants, and obligatory from the time of its delivery.
2. That such certificate covered the cotton in question.
3. That, as between the plaintiff and third persons subsequently insured, whether insured under similar certificates issued, or upon specific risks taken subsequent to the issuing of the plaintiff's certificate, the plaintiff’s contract, being first in point of time, gives him priority of right, and that he is to be protected in preference to them, even if it be held that J. Day & Co. could not bind the defendants for sums exceeding $750,000 in the aggregate. That J. Day & Co. having, by the certificate issued to the plaintiff, insured all cotton described therein to be thereafter shipped to him, could not deprive him of the benefit of that insurance by subsequently insuring others.
4. That, without deciding the question whether J. Day & Co. could make valid contracts of insurance for sums exceeding $750,000 in the aggregate, the judgment should be reversed and a new trial granted.
(Before Bosworth, Ch. J., and Woodruff and Moncribf, J. J.)
Heard, June 11;
decided, December 31, 1859.
This is an appeal by the plaintiff from a judgment dismissing his complaint. The action was tried before Mr. Justice Hoffman without a jury, in October, 1855. It is brought to recover for a total loss upon a contract of insurance’ alleged to have been made between the plaintiff and the defendants on the 15th of November, 1853, and which, by its terms, was to continue in force until July, 1854. The loss in question occurred early in February, 1854, and there is no question as to the fact of a loss or of its amount. The main question is, whether the property so lost was in fact insured by the defendants.
The contract of insurance was made in Apalachicola, Florida, by J. Day & Oo., as agents of the defendants. The powers of J. Day & Oo., a firm doing business at Apalachicola, arose in this wise:
The defendants executed and delivered to J. Day & Go., a Cargo Policy, (No. 784,) dated October 27, 1852, in favor of J. Day & Co. for $250,000, in terms, “ on account of whom it may *540concern, to cover only property which may be indorsed hereon by J. Day & Co., loss, if any, payable to the persons named in the certificates granted by said J. Day & Co., and subject to conditions contained therein, and not inconsistent with the terms of this Policy.”
By the terms of this Policy, the defendants make insurance “ at and from ports and places to ports and places, on cotton,” * * and “ upon all kinds of lawful goods and merchandises laden or to be laden on board any good vessel or vessels, steamer or steamers,” &c. The premiums to be at the same rates as charged by other good companies or agencies, to be governed as near as may be by the tariff of premiums furnished with such Policy to J. Day & Co., “the premiums on risks to be fixed at the time of indorsement, and such clauses to apply, as the Company may insert, as the risks are successively reported.” An indorsement on the Policy declares that “this Policy is to be deemed continuous unless otherwise directed by either party, thirty days’ notice being given to the assured, to enable risks which had already attached previous to the receipt of notice by J. Day & Co. to terminate.”
The defendants delivered with this Policy, to J. Day & Co., a letter of instructions and blank certificates, to be filled up by J. Day & Co., and to be delivered by them to persons whom they might agree to insure under the Policy. The Policy itself J. Day & Co. pasted in a book, in which book they entered, under correct dates, the fact of their having granted insurance and certificates to the several persons with whom they subsequently made contracts of insurance.
On' the 15th of November, 1852, the plaintiff applied to J. Day & Co., as such agents, for insurance, and J. Day & Co. signed and delivered to him one of the certificates, and at the same time indorsed on Policy (No. 784) by entering in the book in which it was pasted, the following, viz.:
“ Certificate granted to S. H. Hartshorne to cover all cotton shipped per good steamboats, from points on the Chattahoochee river, by or for account of the following parties, and consigned to S. H. Hartshorne, valuation per bale annexed to each name. Eire risk at Apalachicola three days after landing.”
*541Then follow the names of ten persons or firms who were to so ship cotton, and against the name of each of said persons was the name of the place from which he was to ship and the agreed valuation of each bale he might ship.
Having made this indorsement on the Policy, J. Day & Co. filled up and signed one of the blank certificates furnished to them by the defendants, and delivered it to the plaintiff. It is in these words:
“UNION MUTUAL INSURANCE COMPANY OP N. Y.
“ E. S. Lathrop, President.
“Jno. S. Tappan, Vice-President.
“Ferdinand Stagg, Secretary.
“ Certificate No. 1.
“Apalachicola, Nov. 15, 1852.
“Entered this day on Policy No. 784, issued by the Union Mutual Insurance Company, of the city of New York, sundry amounts, per endorsements made in books accompanying this certificate, by J. Day & Co., on account of sundry persons whose n'ames appear on book, payable in case of loss to S. H. Hartshorne, on cotton shipped per good steamboats from points on the Chattahoochee river to Apalachicola, and consigned to S. H. Hartshorne, valued at, per indorsements made in book by J. Day
& Co., on board the ....,____master, at and from .... to----;
time of sailing____; bills of lading dated ... The said S. H.
Hartshorne, therefore, is insured by the said Union Mutual Insurance Company, lost or not lost, for the said sum of, per indorsement, dollars as above.
“ Binding. J. Day & Co.”
In the letter of instructions accompanying the Policy and certificates, when delivered to J. Day & Co., the defendants say: “ These Policies are granted in the form presented, for the purpose of enabling you to take risks for other parties under the same, and the certificates are to be used as evidence for the assured that the risks described by them are covered by the Policy in your hands, and are considered by us, in fact, as representing a Policy issued by the Company itself, subject to all the conditions of the same, and in case of loss, payable in like manner.”
*542According to the course of business, the plaintiff’s consignors of cotton shipped it on steamers at the points on the Chattahoochee river named in the certificate, consigned to him; and as a generál thing information of the fact of shipment could not be received by the plaintiff before the arrival of the cotton, as the same steamer which carried the cotton, also carried the mail containing advices of the shipment.
The certificate granted to the plaintiff was pasted in a small book which he kept, and as each cargo arrived, he entered in this book the date of such arrival, the quantity, and by whom shipped; and at the end of each month presented this book to J. Day & Co., whereupon the amount payable for premiums was ascertained and then or soon thereafter paid. The amount of property thus ascertained to have been at risk during the month, was then efitered by J. Day & Co., as of that date in their Policy Book, that is, in the book in which Policy (No. 784) was pasted.
This course was pursued with respect to every person to whom J. Day & Co. issued one of these certificates. And these certificates were treated as open and continuing Policies, covering all goods shipped thereafter, from time to time, answering the description contained in the certificates. J. Day & Co. also took specific risks, and these were entered in their said Policy Book under the dates when they were respectively taken.
By the 14th of February, 1853, it was ascertained that $250,-000, in the aggregate, had been at risk under Policy (No. 784,) and the defendants sent to J. Day & Co. a paper reading thus:
“MARINE.
“ Office of the Union Mutual Insurance Company.
, . “ New York, February 14, 1853.
“An additional sum of $250,000 is hereby granted upon' Policy No. 784, issued to J.. Day & Co., of Apalachicola, subject to the same terms and conditions as the original insurance under our letter of instructions.
“ Jno. S. Tappan, Vice-Pres't.
“ Ferdinand Stagg,. Séc'y."
J. Day & Co. pasted this renewal in their said Policy Book, and continued the business of insuring as before..
*543On the 28th of October, 1853, the defendants issued and delivered to J. Day & Co. a Cargo Policy (numbered 993) for $250,-000, in the same form as the first, delivered it to one of the firm then in New York, .who took it to Apalachicola, arriving there about the 20th of November. The fact of its having been issued was communicated by letter, which reached Apalachicola at an earlier date. The Policy was pasted in the same book as the first, and J. Day continued to insure as before.
On the 15th of November, 1853, J. Day & Co. indorsed on the plaintiff’s said certificate (of November 15,1852,) as follows:
“ The foregoing Policy is hereby renewed to cover all cottons as per the body of the Policy from the 15th of November, 1853, to 1st July, 1854.
“J. Day & Co.
“ Apalachicola, 15 Nov., 1853.
“ See parties’ names in book annexed.”
At the same date they entered in their Policy Book the fact of having granted this renewal.
Early in February, 1854, it was ascertained that all the property which had been at risk from the commencement of the business, under the certificates which had been granted, including the specific risks taken, exceeded $750,000; the aggregate sum named in the two Policies and the extension of the first. The cotton in question was shipped on the 1st and 2d of February, 1854, on the steamer Alabama, and on the 3d the vessel and cargo were wholly consumed by fire.. It is to recover for that cotton, that this action is brought.
The defendants insist that J. Day & Co. had no power to make them insurers for more than $750,000 in the aggregate.
That as between the persons to whom certificates of insurance had been- granted, those whose property was first put at risk had the priority of right without regard to- the time when their insurance was effected; and that when risks amounting in all to $750,000 had been ascertained and indorsed on the Policy, the powers of J. Day & Co. were exhausted, and these outstanding certificates became thenceforth inoperative.
It appeared that before the property in question was shipped, there had been over $750,000, in the aggregate, at risk.
*544It was held at special term that J. Day & Co. had no authority to make the defendants insurers for more than $750,000 in. the aggregate; that as this limit was reached before the cotton in question was shipped, their powers were exhausted, and the plaintiff consequently was from that time uninsured by the defendants; that the plaintiff’s contract of insurance could not be treated as existing anterior to the 1st of February, 1854, and binding for the future; that on that day J. Day & Co. had no authority to make such a contract, and therefore the defendants were not liable for the cotton in question, and the plaintiff’s complaint was dismissed.
The decisions of the Judge were duly excepted to. It did not appear from the facts as found, whether $750,000 of risks, in the aggregate, had attached under the certificate issued to the plaintiff from the time of its renewal, and under like certificates of a prior date including specific risks, prior to shipping the cotton in question. Some portions of the correspondence between the defendants and J. Day & Co., and some additional facts, are stated in the opinion of the Court.
From the judgment entered on the decision, dismissing the plaintiff’s complaint, the present appeal is taken.
Charles 0 ’ Conor and William Curtis Noyes, for appellants.
I. The relation between the defendants and J. Day & Co. was manifestly that of principal and agent. It is constantly so recognized in terms by the Company, and no other legal name can be given to it. The printed form of a Policy was used in framing the agent’s letter of attorney or charter of authorization. And in respect to the alleged limit upon their power, the question is, did the use which was made of that printed form convey, with sufficient clearness to bind third persons, the idea that the agent’s power to insure was limited to the sum of $250,000 in the aggregate.
H. The letter of attorney does not express or convey any such idea. Its true reading is: We hereby authorize J. Day & Co., for us' and in our name, to grant certificates of insurance, covering property to be indorsed hereon by J. Day & Co., at rates to be fixed by them, subject to conditions contained in such certificates, and not inconsistent with the terms of this form. This *545was, in effect, writing a power of attorney to insure on the face of a pattern Policy, the terms of which, so far as applicable, were to be impliedly incorporated with all certificates issued under it. (Devaux v. J'Anson, 5 Bing. N. C., 519 ; Lord Ellbuborough in Robertson et al. v. French, 4 East, 140, 141.)
IIL If the Company and J. Day & Co. understood this $250,000 to be a limit upon the aggregate amount of insurances to be granted by the latter, such understanding on their part would not bind or in any way affect the person insured. The insured did not so understand the paper, and they may lawfully claim the benefit of its true construction.
IY. The Company did not so understand it when the Policy was issued.
Y. The Company & J. Day & Co. may possibly have understood this $250,000 entry as a limit upon the power of the latter, binding them in like manner as private instructions bind an agent. They could not have had a clear conception that it bound certificate holders.
YI. It is impossible that the Company or J. Day & Co. could ever have had an intelligent and practical conception that such limit existed and could be enforced in the way now attempted against persons obtaining certificates from J. Day & Co. J. Day & Co. themselves issued the open certificates which were altogether indefinite in amount, and they knew that there was no other method in which the business could be done.
The Company had explicit notice that the business was done under such open certificates as early as January 27, 1853. Indeed, as insurers they are chargeable with notice of the course of trade; and, besides, it is to be presumed from the evidence that they were well acquainted with it. Insurers are chargeable with notice of the course of that trade in which the insurance is effected. (1 Phil. on Ins., §§ 119, 140, 141; Eyre v. Marine Ins. Co., 5 Watts & Serg., 122, and cases therein cited; 8 Pet. R., 582.) Ignorance for so long a time of the business openly carried on by their agents in their name and for their account and profit, if it really existed, would have amounted to gross negligence on the part .of the Company, and sufficient to charge them with constructive notice. (Gansevoort v. Williams, 14 Wend., 139, 140; Williamson v. Brown, 15 N. Y. R., 359.) In ¿respect :to this sup *546posed limitation of power, the contracts of insurance, evidenced by these open certificates, must take effect at the time of their issue. As contracts of insurance, they could not have their inception at the time when the particulars were given, for that was always after the risk was known to have 'terminated.
As contracts of insurance they could not have their inception at the time of the commencement of the risk, i. e., the loading of the goods on board; for that construction would produce the utmost uncertainty and confusion. Ko certificate holder would ever know whether he was insured or not until an account was taken of all the doings of all the certificate holders. The agents would never know when the limit was reached. One applying for insurance would have no means of ascertaining whether or not the limit was already reached. The very first taker of a certificate might have his insurance superseded by a subsequently insured person procuring his goods to be first shipped. This construction might lead in any case to the singular result attained in this. A contract of insurance, perfectly valid when made, would be supplanted by the subsequent act of the insurer’s agent.
Instead of its being a far-fetched and indeed unwarrantable deduction from the peculiar structure of an awkward and inartificial document, if it had been plainly and directly expressed that the agent’s power of insuring was limited to the amount of $250,000 in the aggregate, the absurd consequences to which it must lead, in such a business as that under consideration, would prove that the contracting parties did not intend the very thing . they said. When such stipulations are made, they are treated as mutual mistakes and disregarded. (1 Phil. on Ins., § 6, and note; id., §§133, 135, 137, 125; 1 Greenl. Ev., 278; Alsager v. St. Katherine's Dock Co., 14 Mees. & Welsb., 799 ; Kemble v. Farren, 6 Bing., 141; 6 House of Lords’ Cas., 139.)
VII. There can be no pretense that the alleged limit was exceeded on the T5th Kovember, 1853, when the plaintiff obtained his certificate. The defendants’ agents could not, by subsequent insurances, divest the plaintiff of his already established right; and, consequently, the inquiry at the trial as to the state of the account between J. Day & Co. and their power "of attorney on the 1st February, 1854, was altogether irrelevant.
*547.YU! If such an account could be taken, the sums underwritten by J. Day & Co., for themselves or their correspondents, should be deducted. They had no authority to grant such insurances. (N. Y. Central Ins. Co. v. National Protection Ins. Co., 4 Kern., 85.)
IX. The case made by the complaint was fully proved.. The defendants should have been decreed to deliver a valid Policy of insurance, and to pay the loss, with interest and costs;. consequently the judgment of the Special Term should be reversed. (Perkins v. Wash. Ins. Co., 4 Cow., 645; Carpenter v. Mutual Safety Ins. Co., 4 Sandf. Ch. R., 408; Tayloe v. Mer. Fire Ins. Co., 9 How. U. S. R., 390; Union Mutual Ins. Co. v. Commercial Mutual Ins. Co., 8 Law R., N. S., 610; Trustees First Baptist Church v. Brooklyn Fire Ins. Co., 18 Barb., 69.)
Wm. M. Fvarts, for respondents..
I. The defendants placed in the hands of J. Day & Co. an open Policy to the amount of $250,000.. This Policy was open to take in such specific risks,, conformed, to its terms, as from time to time the assured,, by agreement with: J„ Day & Co. therefor, should procure to be indorsed thereon.
1. This Policy gave an opportunity of insurance, in - the aggregate,, to its limit in amount, and not beyond. The sum once filled,, there was no room for further insurance under the Policy.
2. Ho actual contract of insurance arose under this Policy until the assured, the subject of insurance and the premium, were ascertained, and the risk thus insured was indorsed on the Policy.
3. The .Policy, as placed in the hands of J. Day & Co., differed in no respect from an open Policy for an equal sum issued to an assured by name, so far as respects the amount for which the defendants undertook to become insurers.
4. The only difference was, that instead of the assured being determined as a party to the Policy, J. Day & Co., named as the assured, were authorized to fill up the Policy with ysks, conformed to its terms, for other and various parties.
II. There was no agency, or show, or credence of agency, to J. Day & Co. to effect insurance with defendants, beyond the *548faculty of admitting risks upon the Policy, according to its terms and within, in the aggregate, its amount.
The power of adjusting losses did not extend, or purport to extend, the power of insuring.
The furnishing by defendants, to J. Day & Co., of a tariff of premiums or of blanks, whether of certificates of insurance or of orders for payment of losses, has no significance on the point of authority to insure.
III. The Policy of insurance, the whole instrument by and upon which J. Day & Co. either could effect or assumed to effect insurance with the defendants, was exhibited to the plaintiff at the outset, and was fully understood by him.
IY. At and before the inception of the risk of the plaintiff, by this suit now sought to be indorsed upon one or the other Policy of the defendants, the insurance opened by the defendants in the name of J. Day & Oo. for distribution to assured to be named, was fully taken up ; the Policies being exhausted, there was no space or opportunity for a contract of insurance to arise upon the plaintiff’s risk under them or either of them ; beyond the Policies, J. Day & Co. had no authority and no show or pretense of authority.
1. If the Policy “ 993 ” be treated as an extension of the previous Policy, and constituting an unbroken line of insurance of which the risks in the order of entry formed a continuous series, (as they are numbered, in fact, on the book,) the whole aggregate of the Policies had been filled before this risk of the plaintiffs had its inception.
2. If the plaintiff seek to ascribe this risk to the first Policy, “784,” as extended by the additional grant of $250,000, that Policy and its extension had been exhausted before the inception of this risk.
Y. The open certificate, so called, granted by J. Day & Go. to the plaintiff, purported to effect no insurance for the plaintiff, except as indorsements should be made upon the plaintiff’s insurance book by J. Day & Co. under the described Policy (No. 784.)
1. No certificate granted by J. Day & Co. could entitle the plaintiff to insurance under the defendants’ Policies'beyond their .amount, nor except in conformity with .their .terms.
*5492. The only construction of this open certificate, so called, which can help the plaintiff, would be an exclusive appropriation of the whole Policy to his risks by reason of the prior date of this open certificate, but not of his risks, as they from, time to time became insurable and supplied a premium.
3. This construction is inadmissible: (1.) as unsupported by the language or purport of the certificate itself; (2.) as equivalent to a conversion of the Policy into a private Policy of the plaintiff, thus frustrating the whole plan and scheme of the intended insurance; (3.) as involving an absurd subjection of the defendants’ interest to the plaintiff’s occasions without consideration; (4.) as negatived by the whole course of the business, as conducted by all parties with the knowledge of each.
4. The true purport of the open certificate, its design and office were to give the plaintiff the right to have his risks, proving conformable to the certificate and the Policy, indorsed upon the Policy, as they should severally have their inception. The contingency that the Policy might, at the inception of some future risk, be exhausted, and so not cover such future risk, was apparent, and necessarily was at the hazard of the plaintiff.
It is the ordinary hazard of the holder of an open Policy that shipments may be at risk, without timely advice, beyond the limit of his open Policy.
VI. The case is governed by well settled rules of the law of agency. The defendants have exercised every degree of caution in setting forth the true position of J. Day & Co. distinctly and unequivocally, and the plaintiff has been misled by no act or omission of defendants.
The loose method of transactions between plaintiff and J. Day & Co., was never made known to or countenanced by the defendants. (2 Duer on Ins., ch. xii, §§ 44-53.)
By the Court—Bosworth, Ch. J.
The primary and main object, if not the sole object, of confiding to J. Day & Co. the powers vested in them was, that third persons might obtain insurance upon cargoes by application to them, with like force and effect as upon an application to the defendants themselves; and that J. Day & Co. might execute and deliver to all persons, applying to and contracting with them as agents of the defendants, *550authentic evidence that such persons were insured by the defendants as effectually and absolutely as by a formal Policy issued by the defendants themselves, and were insured against the risks described in the certificates issued and delivered by J. Day & Co. to the persons thus insured.
The defendants’ letter to J. Day & Co. of the 27th of October, 1852, states the object of the defendants in delivering the Marine and Eire Policies which it accompanied, and the use to be made of the certificates furnished therewith, and declares that “the certificates are to be used as evidence for the assured that the risks described by them are covered by the Policy in your” (J. Day & Co.’s) “hands, and are^onsidered by us in fact as representing a Policy issued by the Company itself, subject to all the conditions of the same, and, in case of loss, payable in like manner.”
This letter of instructions also states that “we” (the defendants) “ have not named a limit in the Marine Policy, knowing the great difficulty you would have in fixing an amount with the parties for whom you would be called upon to insure; but it is our wish that you should not incur a liability for more than $10,000 by any one first-class boat, nor more than $5,000 by any other craft.” On the 15th of November, 1852, J. Day & Co., on being applied to, as such agents, by the plaintiff, for insurance, issued to the plaintiff a certificate signed by them, (the certificate being one which the defendants had furnished to J. Day & Co., to be signed and delivered by them as such agents,) which certificate declares that the plaintiff “ is insured by the said Union Mutual Insurance Company” * * “ on cotton shipped per good steamboats, from points on the Chattahoochee river to Apalachicola, and consigned to ” the plaintiff, “ valued at....., per indorsements made in book by J. Day & Co., on board the.....,......master, at and from ____to.....; time of sailing....., bills of lading dated......” On the back of this certificate, J. Day & Co., on the 15th of November, 1853, made and signed an indorsement in these words, viz.: 1
“ The foregoing Policy is hereby renewed, to cover all cottons, as per the body of the Policy, from the 15th of November, 1853, to 1st July, 1854.
“ Apalachicola, 15th Nov., 1853. J. Day & Co.
“See parties’ names in book annexed.”
*551This certificate, when received, was pasted in, or attached to, a book kept by the plaintiff, in which he entered the cargoes intended to be protected and covered by the certificate from time to time, when informed of the fact of cotton having been actually shipped, consigned to him, and he exhibited to J. Day & Co., monthly, such certificate and book and the entries therein made. The entries were made in pencil by the plaintiff in the first instance, and were written over by J. Day & Co., on being found to be correct. They, at the same time, entered in the book in which they had pasted Policy No. 784 . the goods thus ascertained'to have been at risk and the amount of premium payable for insurance thereon under the said certificate. At the time of issuing and delivering the said certificate to the plaintiff, they made an entry in their book in which they had pasted Policy No. 784, stating the grant of the said certificate, the purpose for which it had been issued, and also entered, at the time, the fact of its renewal from the 15th of November, 1853, to the 1st of July, 1854.
Was the said certificate a valid contract between the plaintiff and the defendants, at the moment it was issued and delivered by J. Day & Co. to the plaintiff? Could the latter, as a matter of right, recover upon and by reason of it for a loss of property described as insured by it, in a case in which no question could arise as to J. Day & Co. having insured to a larger amount in all than Policy No. 784 authorized?
By the terms of the Policy (No. 784,) it was “to cover only property which may be indorsed hereon by said J. Day & Co.” It covers “ all kinds of lawful goods,” &c., “laden or to be laden” on board any good vessel or steamer, &c.
“ The premiums on risks to be fixed at the time of indorsement ; and such clauses to apply as the Company may insert, as the risks are successively reported.”
“ This Policy to be deemed continuous, unless otherwise directed by either party; thirty days’ notice being given to the assured to enable risks which had already attached previous to the receipt of notice by J. Day & Co. to terminate."
If a Policy, in form like this one, had been issued directly by the defendants to the plaintiff, and such Policy had stated that it yms “ to cover only property which may be indorsed hereon by the President of the Union Mutual Insurance Company,” and the *552President of the Company, subsequent to its execution and delivery, had indorsed thereon, viz., “ This is to cover all cotton shipped per good steamboats from points on the Chattahoochee river to Apalachicola, and consigned to S. H. Hartshorne,” I think it would not be doubted that the Company would be liable for a loss of cotton coming within the description contained in such indorsement.
There was indorsed upon Policy No. 784, at the time the certificate of insurance was delivered to the plaintiff by J. Day & Co., the following entry, to which some modifications in the valuations appear to have been added at subsequent dates, viz.:
“Nov. 15, 1852. Certificate granted to S. H. Hartshorne, to cover all cotton shipped per good steamboats from points on the Chattahoochee river to Apalachicola, by or for account of the following parties, and consigned to S. H. Hartshorne: valuation per bale annexed to each name.
“ Eire risk at Apalachicola three days after landing:
1W. T. Simpson from Eufaula, valued at $50 per bale.
“ Roberts & Locke, “ J. M. Morrison, “L. J. Leaird,
“L. F. Stow,
“D. Morris,
^ tS S *c3 a? 5 « »
§ | § S
“ “ 50 “
“ “ “ 50 “
“ “ “ 45 “
“ “ “ 50 “
“ Georgetown, “ 50 “
“ Harrison & Godwin, from Eufaula, valued at invoice.
“ J. M. Hamilton & Co., “ “ “ $50 per bale.
“ G. A. Roberts, “ “ “ 45 “
“J. P. Adams, valuation at $50 per bale—increased from December 14, 1853.
“Above reduced to $45 per bale, from date of Feb. 4, 1854.”
At the time of the renewal of the certificate held' by Hartshorne on the 15th of November, 1853, there was indorsed on Policy (No. 784) by J. Day & Co., underneath the indorsement made thereon (on the 15th of November 1852,) the following, viz.:
“Nov. 15, 1853.
“The above certificate renewed from this date to 1st July, 1854.
“J. Day &' Co.”
*553Thus, there was indorsed on the Policy, that “cotton” was insured by it under the certificate issued to the plaintiff; the names of the persons who were to ship it; the place where they resided; the name of the consignee; the voyage to be made; the class of steamers on which the property was to be shipped, and the per bale valuation of the cotton so insured.
“Property,” viz.: cotton thus described and identified, was “indorsed hereon (on the Policy) by said J. Day & Co.,” on the 15th of November, 1852, as insured by it; and the Policy in terms declares that the Policy is to “cover property which may be indorsed hereon by said J. Day & Co.”
The certificate issued to the plaintiff, when read in connection with the indorsement thus made on the Policy, is very intelligible.
It reads thus: “Entered this date, on Policy (No. 784) issued by the Union Mutual Insurance Company of the city of New York, sundry amounts per indorsements made in book accompanying this certificate by J. Day & Co., on account of sundry parties whose names appear on book, payable in case of loss,” &c., “on cotton shipped,” &c. The “sundry parties” are the persons whose names were specified in the indorsement made on Policy No. 784, and which names were also written in the “book accompanying this certificate."
The Policy No. 784, the certificates and letter of instructions furnished with it by the defendants to J. Day & Co., when considered separately or together, indicate no intent of the defendants, that J. Day & Co. should not make contracts of insurance in this manner; nor do they furnish any warrant for saying that the indorsement which J. Day & Co. made on the 15th of November, 1852, on the Policy (No. 784) was not as definite and as full in its particulars as it was contemplated by the defendants they might have occasion to make, in transacting their business within the limits of the powers intended to be conferred.
The Policy (No. 784) insured goods “laden or to be laden,’ and the contract evidenced by the certificate by its reference to and embodiment of the provisions of Policy No. 784, as part of such contract, makes it a valid contract between the plaintiff and the defendants.
The letter of the 27th of October, 1852, states as a reason why no limit has been prescribed as to the amount of insurance which *554could be rightfully.granted (upon cargo in any one boat, to any person or persons under the Mariné Policy,) that the defendants knew “the great difficulty you” (J. Day & Oo.) “would have in fixing an amount with the parties for whom you would be called upon to insure.”
It appears, without contradiction, that for many years prior to the defendants conferring authority on J. Day & Oo. to make contracts of insurance for them, and during all the time that such authority existed and was exercised, the course of business was, that the consignees of cotton residing at Apalachicola “insured the cotton shipped to them by parties residing in the interior and sending it by the rivers to that place; that from the want of rapid communication with the interior, (the mails being carried by steamboats,) it was impossible to know when the cotton was shipped, (at the time of shipping it,) as the cotton would frequently arrive before or with the advices of its shipment, and that therefore the practice was and had been during all that period,” (some fifteen years,) “ in reference to open Policies, to regard all cotton shipped under the open Policies as covered by them, although the details of the specific shipments were not entered on the Policies.”
The defendants in their letter to J. Day & Oo. of the 15th of January, 1853, say: “We notice quite a large amount under Policy Ho. 14, but presume it will go down the river by a number of boats, and that you have limited the amount by any one boat at one time, not to exceed $10,000." .
J.- Day & Co., in their reply of the 27th of January, 1853, state that “it is very seldom that the amount of risk on any one steamer reaches over $5,000 or $6,000, by all the parties to whom we have given open Policies."
The defendants, in their letter to J. Day & Co. of the 14th of February, 1853, say: “If you can conveniently, we should be glad to have you specify in your returns the name and amount by each boat, and oblige,” &c.
J. Day & Co. replied on the 26th of February, 1853, that: “It would be difficult to give the amount of risk on any one particular trip of any boat. We could give the amount by any one boat for each month very easily.”
*555In answer to this, the defendants wrote to J. Day & Co. on the 7th of March, 1853, thus: We “ can only say that we wish you to use caution in accepting the river risks, keeping the amount by any one boat as small as you can consistently, and scattering the fire risks as much as possible. If at any time you find the returns larger than prudence would dictate on the premiums, &c., we can get reinsurance done here on advice from you.”
I think the defendants are chargeable with notice of the manner in which J. Day & Co. transacted business for them, and that there is nothing in it opposed to the apparent intent and expectations of the defendants in respect thereto at the time of employing them, as evidenced by the papers which .they furnished to J. Day & Co. as constituting their authority and indicating the course they were to pursue.
If this be a correct view, then it lollows that the certificate issued to the plaintiff by J. Day & Go. on the 15th of November, 1852, was from the time of issuing it a valid contract of insurance, and continued to be a valid and continuing contract, so long as by its terms, or by agreement between the parties, it continued in force.
All cotton of the description which it declares to be covered by it, is insured by it, and upon a loss occurring, the defendants are liable for it as the insurers.
If a valid contract, it could not be terminated by the mere fact that J. Day & Co., as the agents of the defendants, subsequently-made contracts of insurance with other parties and issued certificates to them.
If under all the certificates issued, property was put at risk of a larger aggregate amount or value than they could make valid contracts to insure, and if for that reason some of such certificates must be rejected, as made without authority, or treated as having become inoperative, I do not see on what principle a second contract is to override and defeat a prior contract between the Company and other parties valid when made, and existing in full force when the second one was entered into.
The Judge at Special Term treated the contract between the plaintiff and the defendants as having been, in effect, made when the cotton in question was shipped. He says: “ I consider the contract of insurance as to the cargo of the Alabama cannot be *556treated as in existence until this 1st day of February, 1854, at the earliest.”
The cotton which was shipped by this boat was not at risk, it is true, until it was put on board. But a valid contract was made certainly as early as the 15th of November, 1858, that all cotton which the shippers of the cotton in question should ship between that date and the 1st of July, 1854, from the places named, consigned to the plaintiff, should be protected against the perils enumerated in Policy Ho. 784, and that the defendants would pay to the plaintiff the amount of any loss which should be suffered.
That fact was constructively known to every person to whom J. Day & Go. subsequently granted certificates, or with whom they made contracts of insurance, who is chargeable with notice of the indorsements made on the pattern Policy, by J. Day & Co., of the grant of certificates under it.
It seems to me, therefore, that, if any party is to be defeated of his insurance on the ground of there being an aggregate limit of risks beyond which J. Day & Oo. could not bind the defendants, the one who obtained a certificate of insurance last took it at the hazard of its being inoperative by reason of the certificates previously granted, and the amount of property put at risk under them.
That he, as well as the Company, must recognize the rights of the holder of the certificate of insurance first granted—a certificate constituting a valid contract between the parties to it when made, and not to be avoided (if avoided at all) on the sole ground of a subsequent contract with himself in the same form, and of his individual acts under it.
I cannot understand on what principle a contract between A and B, valid in all respects, and under which both are at the time acting, and by which A, in such an event as has happened, is entitled to recover a certain sum of B, can be defeated or impaired by force of a subsequent contract between B and 0, and anything 0 may do under it.
The plaintiff’s contract is first in point of time, and he has precedence, therefore, in point of right.
If the aggregate limit of $750,000 had not been reached at the time the property insured by the plaintiff was lost, I do not understand it to be intimated in the opinion delivered at Special Term that the plaintiff would not be entitled to recover. If he would *557be, it would not be for the reason that any contract was made at the time the cotton in question was shipped; but his right to recover would rest on the grounds that the contract of the 15th of November, 1853, (treating the time of the renewal as its true date,) was a legal and valid contract of insurance, and that there had been a loss from the perils which it insured against. If there was not a valid contract of insurance from and after the time the certificate was delivered and renewed, then it follows that the plaintiff never had any property insured by force of his transactions with J. Day & Co.; for he never made any contract except such as the certificate granted and the Policy to which it refers express and create.
To hold that the certificate first granted is a valid contract of insurance, and is to be deemed continuous until terminated by notice from the Company, or by agreement of the parties, and to also hold that, while both parties are acting under it as a valid and subsisting contract, it must be treated as inoperative from the moment that J. Day & Co. ascertain that, under certificates subsequently granted in like form to others, over $750,000 worth of property has been put at risk in such sense that property subsequently shipped will not be protected by it, would, as I think, disappoint the expectations and intentions which all parties to the contract must have had and acted upon at the time it was made.
Whether, on the occurrence of the fact that more than $750,000 worth of property was at risk, the powers of J. Day & Co. had been exceeded in such wise that those who shipped under the certificates last granted could not recover in case of loss, is a question which it is unnecessary to decide now.
But, if any person thus insured is to be treated as uninsured on the mere ground that an aggregate limit was prescribed beyond which the defendants could not be bound by the acts of J. Day & Co., such persons are to be ascertained by taking the dates of the contracts to insure, in the inverse order of the times when they were severally made.
Jewett, J., in Truscott v. King, (2 Seld., 157,) states that “the principle is well settled that a mortgage or judgment maybe taken and held as security for future advances and responsibilities to the extent of it, when that forms a part of the original agreement between the parties; and the future advances will be covered *558by the mortgage or judgment in preference'to the claim under a former intervening incumbrance, with notice of the agreement.”
The report of that case does not disclose that any member of the Court dissented from that part of his opinion. If that be the rule, then it may be said in this case by the plaintiff, to every one whom the defendants, subsequently insured through the agency of J. Day & Co., that you had notice by the -indorsements made on the Policy, when you obtained insurance under it, that, by a valid contract, made on the 15th of November, 1858, I was insured from that date until the 1st of July, 1854, for all cotton that might be shipped, as described and provided in and by the indorsement then made on the Policy, between those periods. It was your folly, or at your own risk, that you relied upon a Policy that might become inoperative by reason of the aggregate risks under it and previous contracts of insurance exceeding $750,000 in all, while your own property was exposed to peril.
It is very obvious that this mode of making contracts of insurance is ill adapted to protect parties at Apalachicola desiring insurance on property situated like that in question, and who must be insured, if at all, by open Policies by which property shipped after the granting them would be covered; especially as, in many instances, it could not be known that the Policy had attached to specific property until the voyage insured against had been performed.
If, in such a case, all property shipped after over $750,000 in' value was at risk would be uninsured, (although it was unknown to any one when the last shipments were made that such aggregate had been reached,) them it-follows that those holding certificates would have no means of ascertaining, after the business had been prosecuted in this mode for a brief period: of time, either by application to J. Day & Co. or otherwise, whether expected consignments, covered by the terms of the contracts made, would be protected or not.
And in case of shipments made at different ports on the day when the aggregate limit was thereby reached and exceeded, the rights of parties would depend on the hour or fraction of the hour at which such last shipments were made. And so, too, if this view be correct, J. Day & Co., by taking a definite risk which would fill up the supposed limit of $750,000, on the morning the *559cotton in. question was shipped and before it was shipped, would thereby cancel and annul the contract between the plaintiff and defendants, which contract, but for such act, would remain in full force, and protect the cotton in question.
It seems to us that the contract first made gives priority of right, if all the assured are not to be protected; and, as the adoption of that rule makes a new trial necessary, it would be out of place to attempt to settle, in this case, what rule must obtain between the defendants and those with whom they made contracts at a later date. If any case arises in which it shall be established that, by allowing the claims for losses of those who insured at a later period, the defendants will bo held to have been liable for risks in the aggregate to an amount exceeding $750,000, that will furnish the appropriate occasion to decide the question of the defendants’ liability in such a contingency.
We think the judgment should be reversed, and a new trial granted, with costs to abide the event.
Ordered accordingly.