NORTHWESTERN IRON Co. v. ETNA INSURANCE CO.

[23 WISCONSIN, 160.]

PAROL CONTRACT OF INSURANCE WAS VALID AT COMMON LAW.

PAROL CONTRACT OF MARINE INSURANCE IS VALID, and an action can be maintained thereon.

The

ACTION upon a parol contract of marine insurance. complaint alleged that in June, 1865, plaintiff applied to the agents of the insurance company in Milwaukee for marine insurance upon a certain quantity of pig-iron, which the plaintiff proposed to ship over the lakes from Milwaukee to Cleveland, Ohio, "against all adventures and perils of the said lakes," etc., to an amount specified; "and that thereupon said defendant, by its said agents thereto duly authorized, proposed and agreed with the plaintiff to insure the said pig-iron in the manner and against the perils aforesaid, and to the amount aforesaid," at a specified rate, "which proposition or offer was accepted by the plaintiff; and said plaintiff was also to notify said agents of said defendant, from time to time as said iron was shipped, of the amount of each shipment, and of the vessel whereon the same was shipped, and that thereupon the risk and insurance aforesaid was to commence," etc. For allegations as to what was done "pursuant to said arrangement," see the opinion. These were followed by the usual averments as to losses, etc. The complaint was demurred to on the ground that it did not state a cause of action. The demurrer was sustained, and the plaintiff appealed. Other facts are stated in the opinion.

Butler and Winkler, for the appellant.

Emmons and Van Dyke, for the respondent.

By Court, COLE, J. It appears to us that the complaint states a cause of action. It is alleged, among other things, that the defendant corporation was chartered and doing business under the laws of the state of Connecticut, "and was duly authorized to do the several acts hereinafter mentioned, and that the business of said defendant during the same times was and is that of insuring property against loss and damage by fire, and by perils of the seas, and the inland waters of the United States," etc.; and that it "did such business by its agents at the city of Milwaukee," etc.; that Whaling and Belden "were the general agents of said defendant in the city of Milwaukee, fully authorized to act in its behalf, and to

AM. DEC. VOL. XCIX-10

enter into contracts of insurance for and on behalf of said defendant, such as the contract or contracts hereinafter mentioned," etc. The complaint then proceeds to state a parol contract for marine insurance on a quantity of pig-iron, which the plaintiff proposed thereafter to ship, and did ship, from Milwaukee to Cleveland, "against all adventures and perils of the said lakes, and navigable waters connecting the same, and all fires, jettisons, or losses happening therein." It is further averred that, "pursuant to the arrangement," the plaintiff made divers shipments of pig-iron by the lakes, paying the premium from time to time on each shipment, and notifying the agents of the defendant, as agreed upon; "and that at the time notice as aforesaid was given to defendant's agents of the first of said shipments, the plaintiff asked of the agents whether it was to have a policy of insurance on the pig-iron, but was told by the agents that it was not customary to give policies upon such insurance"; but that a memorandum of the insurance was entered by them in a book, and that this entry was sufficient; and did not issue to the plaintiff any written policy of insurance. A shipment, loss, and notice are then alleged.

In the opinion which the county court gave in sustaining the demurrer to the complaint, it is assumed that this court, in effect, held, on the former appeal, that the action could not be maintained. This is a misapprehension of that decision. On the contrary, the clear and almost necessary implication from that decision is, that the action might be sustained, providing it appeared that the agents of the company had authority to make the parol contract of insurance relied on. In the absence of all evidence upon the point, it was said the presumption must be that the agents only had power to make contracts of insurance in the usual way by written policies, and perhaps to make parol agreements to issue them, but would have no authority to insure by parol. Now, the authority of the agents to make the contract set out in the complaint is specifically alleged, and of course admitted by the demurrer. And this narrows the case down to the single question so fully discussed upon the argument of this and the former appeal, whether an action can be maintained to recover the amount insured directly upon a parol contract to insure. And notwithstanding the able and learned argument of the counsel, by whom the negative of this proposition is affirmed, I am unable to see any satisfactory reason why such an action cannot be

maintained. It is the language of the authorities that a parol contract of insurance was valid at common law; and what principle of public policy or of statute law does such a contract violate or contravene? It is admitted that a parol agreement to insure is good to compel the company to execute and deliver a policy; and that in some cases, where bills had been filed for that purpose, courts, in order to avoid circuity of action, had given a decree for the payment of the money which would have been payable if the policy had been issued. Counsel have cited many such cases on their briefs. But it is said in no case has a recovery been had, ex directo, upon a parol policy. Such suits are undoubtedly very rare, because the practice almost always is to issue written policies.

The case of New England Fire and Marine Ins. Co. v. Robinson, 25 Ind. 536, is treated by the court as an action upon a parol contract of insurance, although possibly it might be maintained as an action against the company for a refusal to deliver a policy, according to the intimation of Mr. Justice Bronson in Lightbody v. North American Ins. Co., 23 Wend. 18-24. But still the authorities say that, upon the principles of the common law, a contract of insurance need not necessarily be a formal written document denominated a policy. "The contracts might be in writing, or by parol. They may be in the form of an undertaking which imports a present risk completely assumed, or they may be executory, for the delivery of a policy or a renewal of a policy at a future day": Comstock, J., in Trustees of First Baptist Church v. Brooklyn Fire Ins. Co., 19 N. Y. 306-310. And now, although the usage of written contracts of insurance has long and generally prevailed, yet can the courts say that an action upon a parol contract cannot be maintained? It seems to us not. If the agents of the company were fully authorized to make the contract set out in the complaint, we know of no satisfactory reason why a recovery may not be had upon it. And this is the clear implication of the former opinion in this case: 21 Wis. 458.

The order of the county court is reversed, and the cause remanded for further proceedings according to law.

ORAL CONTRACT OF INSURANCE IS BINDING. There is no rule of law requiring it to be in writing: See Sanborn v. Fireman's Ins. Co., 77 Am. Dec. 419, note 422.

THE PRINCIPAL CASE WAS CITED in each of the following authorities, and to the point stated: A verbal contract of insurance is valid, and an action can

be maintained upon it: Strohn v. Hartford Fire Ins. Co., 33 Wis. 654; Northwestern Iron Co. v. Etna Ins. Co., 26 Id. 78, 82. And a parol contract of marine insurance being valid, even if it is, by custom, subject to the conditions of the written policies, a parol agreement is also valid, by which the insured is to have a privilege which would require a special indorsement on the written policy, were that relied on: See case last cited.

PIKE V. MILES.

[23 WISCONSIN, 164.]

HUSBAND'S CONVEYANCE OF EXEMPT HOMESTEAD TO HIS WIFE IS NOT FRAUDULENT AS TO HIS CREDITORS.

SUBSEQUENT CREDITORS CANNOT IMPEACH HUSBAND'S VOLUNTARY SETTLEMENT ON WIFE of land other than such as was exempt, if such settlement was not unreasonable in its character in view of the property and situation of the husband at the time, and there was in fact no fraudulent intent.

CONVEYANCE AS TO EXCESS NOT FRAUDULENT AS AGAINST SUBSEQUENT CREDITORS WHEN. - Where the whole value of a homestead conveyed by a husband to his wife was forty thousand dollars, nd the homestead contained land, in excess of the amount exempt by law, worth five thousand dollars, and the husband was worth seventy-five thousand dollars, over and above his debts, at the time of the conveyance, it was held that the conveyance, as to such excess, was not fraudulent as against subsequent creditors.

REAL INQUIRY IN CONVEYANCE ALLEGED TO BE FRAUDULENT AS AGAINST SUBSEQUENT CREDITORS is not whether the grantor was indebted, but whether he had ample and abundant means to satisfy all his debts after the conveyance. WISCONSIN STATUTE DEFINING RIGHTS OF MARRIED WOMEN OVER THEIR SEPARATE ESTATE DOES NOT APPLY to real estate derived from the husband. It applies only to her real estate derived from other sources. EVIDENCE INADMISSIBLE WITHOUT SUPPLEMENTAL COMPLAINT TO SUPPORT IT. In an action to set aside a conveyance of land from husband to wife as fraudulent, evidence on the plaintiff's part that a mortgage had been executed by the husband and wife on said land after the commencement of the suit, and that the money raised by such mortgage was invested in other real estate in the wife's name, was held to be inadmissible without a supplemental complaint, setting up the facts and asking appropriate relief against such other real estate.

ACTION by the judgment creditors of F. B. Miles against him, his wife, Ella V. Miles, and one Miller, to have certain conveyances of real property from said F. B. Miles to Miller, made July 10, 1865, and immediately from the latter, and as a part of the same transaction, to said Ella V. Miles, set aside as fraudulent, and for the appointment of a receiver, etc. The defendants answered severally. The conveyances were held valid, and the complaint dismissed as to the defendants

Ella V. Miles and Miller. Plaintiffs appealed. The evidence showed that Mr. Miles was engaged in a "general produce, whisky, and commission business," from July, 1865, to January 5, 1866, when he failed; that his business amounted to "from a quarter to a half million of dollars per month"; that on July 1, 1865, he "was worth seventy or eighty thousand dollars above all liabilities, after deducting homestead and furniture"; that on the first of each of the months above named he entered upon his books a statement of his liabilities and assets, and that these statements footed up as follows:

The indebtedness for which the plaintiffs obtained their judgment was contracted in September or October, 1865, and was for whisky. Other facts are stated in the opinion.

Butler and Winkler, for the appellants.

Finches, Lynde, and Miller, for the appellees.

By Court, PAINE, J. The court below found, and the proof sustains the finding, that at the time Frederick B. Miles conveyed his homestead to his wife, he was worth seventy-five thousand dollars, over and above his debts, exclusive of the homestead itself. The homestead was worth about forty thousand dollars, containing something over the quarter of an acre which by law was exempt from execution, the excess being of the value of from four thousand to five thousand dollars.

This court has decided, in Dreutzer v. Bell, 11 Wis. 118, that a conveyance of the homestead by the husband to the wife cannot be held fraudulent as to creditors, for the reason that, being exempt, it was no more beyond their reach after the conveyance than before. It was not liable for their debts at all. And that decision is applicable here, as to so much of the property conveyed as was exempt from execution: See also Legro v. Lord, 10 Me. 161. It is unnecessary to determine whether the conveyance might have been avoided as to the excess beyond the quarter of an acre, by creditors existing at