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Steinback v. Rhinelander.
and that the principal ought not to be permitted to disaffirm the acts of his agent. Admitting this principal to be a sound one, it cannot be applied here, without assuming a fact which does not appear in the case, to wit, that the plaintiff was the agent of Malibran. No evidence whatever appears that will afford any ground to conclude that the plaintiff was either the general ugent of Malibran, or that he was in any way authorized or requested to effect this insurance. On the contrary, the fact is negatived, as far as it could possibly be, by proof. Nor can I see any principle of general policy, which can be urged to exclude this witness. Because his name appears in the policy, is not, of itself, in my judgment, a sufficient objection, when, at the same time, it appears, that it was aliogether unauthorized, and without his knowledge, and, as I consider it, by mistake, or rather through want of correct information, as to the situation of this vessel in point of interest. All these circumstances with respect to Malibran's situation were proper to urge against the credibility of the witness; but they have been decided upon by the jury, whose province it was to give Them their just weight.
With respect to the second objection, this, like many other cases, is one where the general rules of law seem not so much controverted, as their applicability to the case. The premium paid by the insured, and the risk which the insuser takes upon himself, are considerations each for the other. The insurer shall not be exposed to the risk, without receiving the premium; nor shall he retain the premium, which was the price of the risk, if in fact he runs no risk. The rule laid down by Lord Mansfield, in the case of Tyrie v. Fletcher, (Cowp. 666 ; Doug. 566,) is, that where the risk
has not commenced, whether this be owing to the [*275] fault, pleasure, or will, of the insured, *the premium
must be returned; and the reason assigned is, that a policy of insurance is a contract of indemnity, and if no risk is run, the consideration for the premium fails. But if the risk has once commenced, there shall be no return of
Steinback v. Rhinelander.
premium; and Marshall (549) lays it down as a general rule, that is, through mistake, misinformation, or any other innocent cause, an insurance be made without any interest whatever in the thing insured, there shall be a return of premium; and, to illustrate the rule, this case is put. that if a man, supposing he has goods on board a certain ship, to the value of 1,0001. insures to that amount, but afterwards finds either that he has no goods at all on board, or has goods only to the amount of half the insurance; in the one case he shall be entitled to a return of the whole premium, in the other, to a return of a moiety. Testing the present case by those rules, I think the plaintiff is entitled to a return of premium. Although many circumstances appear somewhat obscure, and might afford grounds of suspicion of unfairness in the transaction, unaccompanied with the explanation given them by Malibran; yet, he being considered a competent witness, and his credibility a point for the determination of the jury, whose verdict decides that full credit was due to him, we must resort to his testimony for a true solution of the case; and which, I think, must remove all doubts on the question.
He states, in the most explicit terms, that the plaintiff was not his agent; that he never authorized or requested him to get the vessel or cargo insured ; that the plaintiff had no interest in either; but, that the purchase was made on his own account, and that he never did send, or determine to send, her on a voyage to New York. No parol testimony appears to contradict those facts, nor is there any circumstance to render them improbable, except the bill of lading and invoice of the cargo, by which it would appear that she was intended for New York. Those papers, however, Malibran swears, were merely *colourable, [*276) and were only for the purpose of deceiving privatecrs; and that the name of the plaintiff was inserted, as consignee, because he was his friend. This practice of procuring colourable papers, whether censurable or otherwise, is known to be frequent; and I do not know that it ever has been decided, that the insured was to be concluded or prejudiced thereby. There is no evidence whatever, that the Vol. III.
Steinback v. Rhinelander.
plaintiff was in any manner interested in this vessel. Malibran was his agent, and consignee of the cargo of the ship Albemarle, belonging to the plaintiff, and, of course, had funds of his in his hands; but this, by no means, shows a general partnership, or that the plaintiff was concerned in all the speculations of Malibran. The relation given by Captain Brown, likewise, strongly corroborated the testimony of Malibran, with respect to the plaintiff's having no interest in the vessel or cargo, and, by no means contradicts it, as to their destination. Captain Brown sailed shortly after Malibran had made the purchase of this schooner, and before he had finally determined where he should send her. If Malibran had considered the plaintiff in any manner concerned in this transaction, or had wished an insurance for New York, it is inconceivable why some intimation of it was not given, either to Captain Brown, or in the letters written to the plaintiff, or to Murray. Another circumstance in corroboration of Malibran's testimony, that the papers were merely colourable, is his letter to his agent at the Havanna, by which it appears that he made a bona fide attempt to get insurance from Trinidad to the Havanna ; and his failing to do so was merely accidental, owing to the heavy rains which detained the express who carried his orders for insurance. It seems a little extraordinary, that the plaintiff should obtain this insurance without having some intimation from Malibran of his interest, or a request to insure. These, however, are only circumstances that would go to the credit
of Malibran, as he expressly denies the facts. But I [*277] think the transaction *susceptible of an explanation
that will acquit the plaintiff of suspicion of unfairness. Malibran was the consignee of the cargo of the ship Albemarle, (belonging to the plaintiff,) and having the proceeds in his hands, the plaintiff did not know but they might be appropriated to the purchase of this schooner and cargo; and, although no information to that effect had been received, yet he thought it most prudent to obtain insurance, relying, probably, on his right to demand the premiums again, if he had acted in good faith, and had been mistaken with
Steioback v. Rhinelander.
respect to the voyage, or his interest in the vessel. This also accounts for the entries in the plaintiff's books, as to the charge of the premiums, they being made at the time the policy was effected, and while the plaintiff was ignorant of the true situation of the business. It was said, on the argiment, that this being an insurance at and from Trinidad to New York, the policy attached inimediately, and it is immaterial on what voyage she afterwards sailed; the risk commenced while she lay in port. Admitting the full extent of this position as a general rule, still it cannot be applied here, for the policy could not attach, or the insured recover, in case of a loss, unless he had an interest in the subject of insurance. If, therefore, the whole of this vessel was the property of Malibran, the underwriters never could have been made liable to the plaintiff, in case of a loss, he not having any interest in the subject insured.
On the whole, I am of opinion that the plaintiff had no interest whatever in this schooner; that the policy was effected through mistake, for want of correct information on the subject; the insured supposing at the time he might have an interest, when in fact he had none; so that there could be no insurance on account of the plaintiff himself; that he was totally unauthorized by Malibran to get insurance on his account; that the vessel never did sail on the voyage described in the policy, and that no risk has been run by the underwriters. The premium, *there- [*278] fore, was paid without consideration, and through mistake, and ought, in my opinion, to be returned.
I am, therefore, against granting a new trial; and, for the same reasons, I think the verdict ought to stand in the suit, also, on the policy on the cargo.
RADCLIFF, J. and Lewis, Ch. J. concurred.
LIVINGSTON, J. having been concerned as counsel in the cause, gave no opinion.
Kent, J. The two cases contain some material points of difference between each other, but there are certain questions that equally apply to both, and those I shall first consider.
Steinback y. Rhinelander.
The plaintiff insured in both cases, on the account of himself or of Peter Malibran, or of Murray & Son and himself; but it is stated as a fact, that Malibran alone purchased the vessel, and there is no evidence to rebut the presumption that he was the sole owner. The plaintiff, then, contracted with the underwriters as agent for Malibran, in whom the property existed; and the first question that arises is, whether he can now be permitted to deny that he was an agent, in opposition to his own act and contract with the defendants. To permit this, would be opening a door to infinite fraud and abuse, and would be destructive to fair dealing and to commercial confidence. The broker may have told the defendants that the plaintiff had no orders from Malibran to insure, but this could only allude to special instructions in that case, and could not be understood as a denial of his general authority as agent, and under which it must be intended that the insurance was made. His act is conclusive evidence against him, that he had or assumed to have that authority. Au unauthorized agent cannot, indeed, bind or affect the
person for whom he acts; but he himself ought not (*279) *to be capable of rescinding his own contract. Third
persons whose rights are involved by his assumed agency, can hold him to his own declarations and engagements. The plaintiff, therefore, who contracted with the defendants, as agent, cannot be perniitted, in a suit between him and them, arising on the same contract, to deny himself. In respect to them he must be deemed bound. This is a sound principle of justice and public policy. The question then arises, is Malibran a competent witness for him, after the point is established that he was the agent of Malibran, or at least, that it does not lie with him to deny it? If he was Malibran's agent in effecting the insurance, then Malibran has an interest in the recovery of the premium; for the premium, if recovered back, will belong to Malibran, as the cestui que trust, and for whose benefit the premium was paid. The release from the plaintiff to Malibran is here in