Globe & Rutgers Fire Insurance v. Liberty Bell Insurance

JAMISON, J., pro tem. This action was brought by plaintiff against defendants to recover upon a binder or cover obligation issued by the Liberty Bell Insurance Company, reinsuring a part of plaintiff’s liability under a policy of insurance which it had issued to the Holly Sugar Company. The Guardian Fire Assurance Corporation took over the Liberty Bell Insurance Company’s liabilities and obligations, and agreed to insure risks subsequently written by it; and later the American Equitable Assurance Company of New York assumed the liabilities and obligations of both of these companies. Upon the trial of the ease judgment went in favor of plaintiff, from which the defendants have appealed.

The appeal is brought up on a bill of exceptions, which contains agreed stipulations of facts. From these stipulations the following appears: Edward Brown & Sons were the agents of respondent in California, and W. H. Ticknor was the agent of the Liberty Bell Insurance Company. On November 15, 1929, respondent insured Holly Sugar Company [78]for one year against loss or damage by fire on its property, under policy No. 103687, and at the same time the Liberty Bell Insurance Company, at the request of respondent,' issued to it a reinsurance certificate No. 213, whereby it reinsured respondent for the same term to an amount not exceeding one per cent of respondent’s liability as insurer of the property of said Holly Sugar Company. On October 3, 1930, respondent, in accordance with the local insurance practice, applied to the Liberty Bell Insurance Company for an extension of said reinsurance for thirty days from and after November 15, 1930, and to and including December 15, 1930. Prior to the expiration of such extension, and on or about December 1, 1930, at respondent’s request, defendant Liberty Bell Insurance Company increased the said extension for an additional thirty days, so that by virtue of said last extension said reinsurance of appellant was continued until January 15, 1931. On December 8, 1930, said policy No. 103687 was renewed for one year from November 15, 1930, the new policy being numbered 189237. Under policy No. 103687 respondent had retained twelve and a half per cent liability, and reinsured the remainder of eighty-seven and a half per cent; but under policy No. 189237 it retained seventeen and a half per cent, and reinsured for eighty-two and a half per cent. Thereafter, and prior to December 15th, respondent, in making up its reinsurance schedule, forwarded applications therefor to all reinsurers from whom it had obtained extensions, except such as represented five per cent of respondent’s said liability. The Liberty Bell Insurance Company was one of the insurers representing five per cent of respondent’s liability to which it did not forward an application. On December 15, 1930, Holly Sugar Company sustained a loss at Anaheim, and upon an adjustment thereof respondent recovered from the reinsurers to whom it had made applications eighty-two and a half per cent of said liability, but it made no claim against those reinsurers representing five per cent of its liability from whom it had obtained extensions as above stated, and among which was the Liberty Bell Insurance Company. Immediately thereafter, and on December 17, 1930, the Liverpool & London & Globe Insurance Company, one of respondent’s reinsurers to the extent of five per cent of the risk, who had paid its proportion of the Anaheim loss, gave respondent notice of cancella