Court Opinion

ID: 6818046
Source: CourtListenerOpinion
Date Created: 2022-07-23 19:03:49.753279+00
Date Added: 2024-06-11T16:03:58.784734
License: Public Domain

Browning, J.,
dissenting:
Not being in accord with the majority opinion in this case I submit my views and reasons for such attitude.
The plaintiffs, by notice of motion, sued the defendant for $3,000.00 claimed to be due by reason of an oral contract of fire insurance. The defendant is a corporation engaged in writing fire insurance in the counties of Accomac and Northampton, Virginia, and the plaintiffs, partners, *111composing the firm of E. L. Kellam & Son, are merchants dealing in general merchandise at Belle Haven, in the county of Accomac. The defendant had insured their store building and fixtures and stock of goods since 1920. The policy for such insurance had been renewed each year until 1928, when the project of relocating the highway upon which their building was situated was agitated which, if effected, would result in their discontinuing business or moving their store, and therefore they did not renew the policy for the years 1928 and 1929.
During the last week of December, 1929, Edgar Kellam, of plaintiffs’ firm, wrote a letter to Charles B. Mears, the defendant’s agent in that locality, and asked him to come to Belle Haven to see about insuring their property for the ensuing year. In response to this letter Mears went there on the last Friday in December and after agreeing on the amount of insurance, $1,000.00 on the building and $2,000.00 on the fixtures and stock of goods, the agent made a memorandum of the terms in a note book which he had for that purpose. The insurance period was one year, to take effect immediately, and the premium was $50.70. With this data the agent made out the application on one of the defendant’s blanks, with which he was supplied, which contained the usual and necessary information for writing and issuing the policy.
Edgar W. Kellam testified that the agent assured him that the property was at once insured. Walter G. Ashby, who was present, testified that the agent, Mears, told Kellam that he was insured for twelve months and to consider himself so. Some two weeks later Mears stopped by the plaintiffs’ store and Kellam told him that he had not received the policy and then he offered to settle a balance due on a former premium and the premium for the policy in question, Mears at the time being indebted, personally, to the firm in the sum of $96.50. Mears told Kellam that the policy would be in shortly, and that the settlement for the premium could be deferred until spring. Byron L. Bundick, *112a witness for the plaintiffs, who was present, confirmed this incident and conversation and also testified that Mears said to Kellam that he was positively insured and that he would see about getting the policy for him.
Kellam testified that again in May, 1930, he met Mears on the highway near his store, Mears being in an automobile, and he stopped him and said that he had not received that policy and that Mears seemed surprised and said he thought he had gotten the policy before that, but that he need have no worry he was insured; that he had filed his application as he had always done. Carey Savage, another witness for the plaintiffs, who was present, confirmed this statement.
Mears, the defendant’s agent and brother-in-law of its president, testified for the plaintiffs and corroborated the statement of Kellam as to the effecting of the insurance at the December meeting and further stated that he filled in the application and delivered it to the company on December 31, 1929, by placing it on the desk of the policy clerk, Mrs. LeCato, as was his custom, who was absent at the time, and that he had made some collections of other premiums, which he turned' in to Mr. Wessels, secretary and treasurer of the company; that Mr. Wessels’ desk was the first one he reached upon entering the office; his statement was somewhat at variance with that of Kellam and Bundick in that he stated that he told Kellam at their January meeting that he thought he was insured, that his application had been put in and they should attend to it as soon as they were at leisure. He did not recollect the meeting in May. He further testified that Kellam told him that he wanted the insurance to start from the day in December when the contract was made and he said “all right.” Mears also testified that when an application was refused he was notified and that he notified the applicant. He said also that the company had never informed him that he was without authority to tell applicants for insurance that they were insured from the time they made application to him. He said that he *113solicited insurance, collected premiums; that sometimes he delivered policies and at other times they were sent to the insured by the company; that he was held responsible for premiums for policies written by him and they were charged to him; and that he expected to collect the Kellam premium in August.
The witnesses, Hyslop, Rice, Byrd and Nock testified, in substance, that it was generally understood in the district in which Mears operated that he and the other local agents of the defendant had authority to bind the company at once when immediate insurance was desired and requested. Hyslop had as many as sixty houses insured in the company and all of them dealt with Mears.
Three witnesses for the defendant, who were its local agents in other districts, testified that they had authority to bind the company for immediate insurance. They were not in agreement as to the length of time the binding was to remain in effect but they said that they were expected to get in touch at once with the company in relation to the matter.
About a year prior to the time the contract was made by Mears with the plaintiffs Mr. S. W. Ames, president of the company, at an agency meeting, told the local agents that it had come to his knowledge that they were informing applicants for insurance that it became effective at once and that such practice must cease; that they could not bind the company without notifying it and obtaining a policy. Mears said he was not at this meeting and that at no meeting when he was present was anything said by Mr. Ames which in any way explained or limited or prescribed the authority of the agents. There was evidence that the instructions given at this meeting were not made known to the public in any way.
In the early part of August, 1930, the building and its contents was destroyed by fire, without the fault of the plaintiffs, the owners. They at once went to see the agent, Mears, with whom they always dealt and who was, to all *114intents and purposes, the company to them, and notified him of the fire and they went to the company’s office at Keller, to notify the officials and to find the policy. It was not to be found and Mr. Wessells, secretary and treasurer, said he had no knowledge of the application, had never seen or heard of it and told Mears that he was lying when he said that he had placed it on Mrs. LeCato’s desk. Mears protested that he had done so. Two trials were had, the first resulting in the jury’s disagreement and the second in a verdict for the plaintiffs for $3,000.00, which the court refused to set aside as contrary to the law and the evidence, which action of the court is the sole assignment of error.
There is evidence on the part of the defendant tending ■to show inconsistent statements of the agent, Mears. The evidence is conflicting in many particulars, making the case, it seems to me, peculiarly one for the determination of a jury. There was much testimony, unimpeached, which justified the finding that the defendant’s agents, particularly Mears, were in the habit of assuring applicants that their insurance was effective or binding immediately upon verbal application therefor; that the agents apparently had that authority; that the defendant knew or ought to have known of such habit or custom, because it generally prevailed; that the public contracted with reference to and relied upon it. It is true that seven months elapsed between the inception of the contract and the fire without the issuance of a policy, nor was the policy ever issued, but can we say as a matter of law, that this incident, under all the circumstances of the case, is one that should preclude the recovery of the plaintiffs, in the face of the jury’s verdict in their favor. I think that the reasonableness or otherwise of the matter in this case is a question for the jury.
“The authority of the agent effecting the contract may be determined by implication as well as from express written authority.” Tucker v. Farmers’ Mutual Fire Ass’n, 71 W. Va. 690, 693, 77 S. E. 279. 280.
*115Vance on Insurance, p. 306: “The possession of authority, whether actual or apparent, is a question of fact, not of words. As shown above, the question whether any given act of an agent binds his principal is to be decided by determining whether the third party had reasonable grounds for believing, under all the facts of the case, that the principal had authorized that act. If such reasonable ground does exist, the principal is bound, whether the agent has been entitled ‘general agent,’ ‘solicitor,’ or ‘president.’ It is easily possible that in reference to some particular transaction a special agent may be vested with all the powers of the insurer, and it is not impossible that a figurehead president should be stripped of all powers.”
And at page 310: “ ‘Local’ agents are usually special agents, in the sense of having only limited authority, but local agents may have general powers. In this case, as in all others of agency, the facts govern. If the facts of any case show that the agent was actually possessed of the power exercised, or that the third party had reasonable ground for believing that he was possessed of such power, the principal shall be bound; otherwise he will not. It makes not one particle of difference what may be the designation of the agent.”
I here quote from plaintiffs’ brief which I think is very pertinent and forceful: “In the case of Croft v. Hanover Fire Insurance Company, 40 W. Va. 508, 21 S. E. 854, 857, 52 Am. St. Rep. 902, it was said: ‘The agents agreed with the plaintiff, for a given consideration, to insure a particular house owned by the plaintiff, in a sum which the agent was to and did fix, and for a period of time covering the date of the loss by fire. Nothing remained to be done but issue the policy, which the agent promised to do. These things he himself proved. Both parties understood that the plaintiff was insured. Every element was final to base that policy on. The agents were authorized to issue it. His own memorandum told him every single element from which to issue it, except the name of the insured; and, had he issued *116it-in the wrong name, the mistake could be corrected, and a suit maintained upon it. The only thing wanting is the policy to perfect the insurance. Whose fault that it was not insured? Where is the plaintiff, in fault or default? To decide the case against the plaintiff, his house is lost, without the indemnity he fairly contracted for; to decide it against the defendants is only to make them do what they fairly contracted to do. The defense set up at first blush inspires some questions but, on consideration, it becomes a figment, which withers away. Courts must not let insurance companies evade their policies through mere technicalities. They must be treated fairly, and only held up to their fair engagements. They are very valuable institutions, deserving patronage and encouragement; but when their contracts of indemnity prove worthless, for unsub7 stantial reasons, to those who are in distress and poverty from the waste of fire, against which their prudence sought to provide, it derogates from the efficacy of the policies and the confidence of the public in fire insurance.’
“It is conceded that the agent in this case was a general agent, but the principle applicable is the same. Here there was a contract of oral insurance; no policy was ever issued. In the case at bar we have a contract of oral insurance made with an agent/ who was recognized in the community to have the authority to make such a contract, who represented a company whose president had been informed his agents were making such contracts, who instructed some of them secretly to desist from doing so but gave no notice to the public of this restriction—in fact, a contract made with an agent having every power that the agent in the case of Croft v. Hanover Fire Insurance Company, supra, had, so far as the public was concerned except that he- did not actually write policies himself.”
It is urged that §4305a of the Code of Virginia 1930' requires all insurance contracts of insurance companies-doing an insurance business in Virginia to be in writing, incorporated in a policy or like writing. We do not so con*117strue this statute. It does, among other provisions, not pertinent here, provide that all fire insurance policies shall conform to the provisions of what is known as the “Standard Fire Insurance Policy.” There is no inhibition of an oral contract of insurance. The precise question was raised in the case of Lea & Adcock v. Atlantic Fire Ins. Co., 168 N. C. 478, 84 S. E. 813, 815, in which it was said: “Is a parol contract of insurance or a memorandum of the contract, called a binder, valid, although a standard form of policy has been adopted by statute? In the absence of a statutory prohibition the great weight of authority is in favor of the validity of a parol contract of insurance.” The following authorities are cited: 19 Cyc. 600; Vance on Insurance, 155; Commercial Mutual Marine Ins. Co. v. Union Mutual Ins. Co., 19 How. 318, 15 L. Ed. 636; Franklin Ins. Co. v. Colt, 20 Wall, 560, 567, 22 L. Ed. 423; Phoenix Ins. Co. of New York v. Ryland, 69 Md. 437, 16 Atl. 109, 1 L. R. A. 548, 549; Home Ins. Co. v. Adler, 71 Ala. 516, 524; Hartford Fire Ins. Co. v. Wilcox, 57 Ill. 180, 182; Campbell v. American Fire Ins. Co., 73 Wis. 100, 108, 40 N. W. 661; Walker v. Metropolitan Ins. Co., 56 Me. 371, 378; Floars v. Aetna Life Ins. Co., 144 N. C. 232, 235, 56 S. E. 915. See, also, Massachusetts Bonding & Ins. Co. v. Vance, 74 Okla. 261, 180 Pac. 693, 15 A. L. R. 981, and cases cited therein.
A ruling of a court to the effect that any arbitrary period of time is such time within which an insurance company must issue a written policy, after the receipt of the application for such insurance, or that such period is reasonable and no period in excess of it is reasonable, is a regulatory act upon the part of the court.in respect to the business of insurance companies, and is an usurpation of their rights in their transactions with the public. It is also, I think, an invasion of legislative authority.