Crawford v. Transatlantic Fire Insurance Co.

California Supreme Court Aug 28, 1899 No. L. A. No. 540Published

Before: Britt

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Holding. The court held that the trial court erred by admitting hearsay testimony regarding statements made by the defendant's agents after the insurance transaction was complete, as such statements were not part of the res gestae.

Issues

Whether the insurance policy was effectively executed and binding on the defendant prior to the fire.
Whether declarations made by the defendant's agents after the insurance transaction were admissible as evidence against the defendant.

Disposition. reversed

Quotations verified verbatim against the opinion

“The main question for determination was whether all the acts of said agents, taken together, amounted to an execution of the policy, so that it became obligatory on the defendant.”

“Such evidence was only hearsay and was incompetent.”

Synopsis

Fire Insurance—Delivery oe Policy After Fire—Prior Agreement eor Effective Policy.—A fire insurance policy may be delivered after the occurrence of a fire, if it purports to take effect prior to occurrence, and is the memorial of a prior parol contract for such a policy agreed to in its essentials, and which the parties intended should take effect as stated in the' policy. In such case, it seems that the policy may have taken effect without actual delivery to the insured or his agent.

Id.—Absence of Prior Agreement—Nonliability for Premium.— In the absence of such a prior agreement as would bind the insurance company and render the insured person liable for the premium, the delivery of the policy after the building bad been destroyed by fire, to the knowledge of the parties, could not give any effect to the instrument.

Id.—Action Upon Policy—Evidence—Acts and Declarations of Agents—Res Gestae.—In an action upon such policy, all of the acts and declarations of the agents of the fire insurance company which might characterize their intent while they were engaged in the business of the insurance, and until the delivery of the policy, are admissible against the insurance company as part of the res gestae.

Id.—Subsequent Narrations—Hearsay.—The declarations of the agents of the defendant, made at a time subsequent to the delivery of the policy or when they were not acting for the defendant in any business connected therewith, and which were not part of the res gestae, but are mere narration or illustration of their past conduct, are incompetent hearsay.

BRITT, C. Action on a policy of fire insurance, which in terms purports to be the contract of defendant, and to insure a certain stable building, the property of plaintiff Crawford, to the amount of one thousand dollars, for the period of one year, commencing at noon of May 2, 1897. The defense is that the instrument was not executed by defendant, and never took effect as its contract. For the purposes of the trial the parties stipulated that from April 1, 1897, to May 15, 1897, one Roberts and one Barrett “were and each of them was the agent of the defendant, and authorized to execute said policy, if it was executed.” It appeared in evidence for plaintiffs that said Roberts was a traveling agent for defendant, and said Barrett was its local agent at the town of San Luis Obispo, where said building was situated; that as the result of some oral negotiations'between Crawford and both of said agents on April 30, 1897, Roberts on that day prepared and signed said policy and left it with Barrett, Crawford having agreed to accept the same and pay the premium thereon; on the following day, May 1st, Barrett sought Crawford for the purpose of delivering the policy, but failing to find him, Barrett kept the document over May 2d, which was a Sunday, and while it was so in his possession, on Sunday night, the building was destroyed by fire; on May 3d, after the fire, Barrett delivered the policy to a certain bank, to be held by the bank as Crawford’s agent. A few days later Crawford offered to pay the premium on the pol[611]icy to said agents, but they declined to receive it. On behalf of defendant, there was evidence tending to show that Crawford refused the proposal of said agents to insure the building and to issue said policy, and that the same was prepared without his consent, Barrett expecting to induce him to accept it; and that the delivery to the bank after the fire was (it seems) but provisional, pending other arrangements. There was a verdict and judgment for plaintiffs.

The main question for determination was whether all the acts of said agents, taken together, amounted to an execution of the policy, so that it became obligatory on the defendant. If the policy—as the evidence for plaintiffs tended to show—was the memorial of a contract which in its essentials had been agreed upon by parol before the fire, and which the parties intended should take effect according to its terms on the 2d of May at noon, then certainly the subsequent delivery was sufficient to make the defendant liable on the instrument; its liability thereon probably attached even without actual delivery to the insured or his agent. (Lightbody v. North American Ins. Co., 23 Wend. 18; Davenport v. Peoria etc. Ins. Co., 17 Iowa, 176; Franklin Insurance Co. v. Colt, 20 Wall. 560; Yonge v. Equitable etc. Soc., 30 Fed. Rep. 902.) If, however—as the evidence for defendant tended to show—there had been before the fire no agreement that defendant should insure the building and issue its policy accordingly, such an agreement as would have made Crawford liable for the premium, then it is equally plain that delivery of the policy after the building had been destroyed, to the knowledge of the parties, could not impart to the instrument any effect whatever. (Civ. Code, secs. 2527, 2528; Clark v. Insurance Co., 89 Me. 26; People v. Dimick, 107 N. Y. 13.)

Crawford v. Transatlantic Fire Insurance Co.

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