Queen Ins. Co. of America v. Union Bank & Trust Co.

Citations

• 111 F. 697
• 49 C.C.A. 555
• 1901 U.S. App. LEXIS 4419

Syllabus

<p>1. Insurance-Avoidance of Policy for Breach of Conditions—Estoppel.</p> <p>Where the owner of a marketable commodity applies to an agent of an insurance company for insurance thereon, stating his purpose to obtain a warehouse receipt for the property, and to give such receipt, together with the policy, to a third party, as security for a loan, and has the loss made payable to the lender as his interest may appear, the insurer is charged with knowledge of such purpose, and, after issuing the policy, cannot avoid the same on the ground that the procuring of the warehouse receipt and the pledging of the same effected a change in the ownership of the property which rendered the policy void by its terms.</p> <p>2. Same—Agency—Effect of Custom.</p> <p>The owner of property applied to a firm of insurance agents, representing a number of companies, for insurance tliercon. The firm,—not desiring to write the insurance in one of its own companies,—in accordance with a custom prevailing among the insurance agents of the city, turned the application over to the agent of defendant, who issued the policy and delivered it to the firm, whieli pasted its business card thereon and delivered it to the insured, collecting the premium, which was paid to defendant; the commissions being divided between the two agencies, as was the custom. The transaction was in good faith, and the insured knew no other agent therein than the firm. Held, that the firm was not his agent in the transaction, hut the agent of defendant, which must be presumed to have had knowledge of the custom, and, by receiving the premium and assuming the risk, ratified the agency of the firm through whom the application was received in accordance with such custom.</p> <p>8. Same—Action on Policy—Parties Plaintiff.</p> <p>Although under the state practice a creditor to whom a loss under an insurance policy is made payable as his interest may appear may maintain an action thereon in his own name, the debtor in whose name