Court Opinion

ID: 8175388
Source: CourtListenerOpinion
Date Created: 2022-09-09 22:20:29.188723+00
Date Added: 2024-06-11T16:39:55.756094
License: Public Domain

Dent, Judge,

(dissenting.):

In Judge Brannon’s opinion, he relies almost wholly on the claim that the defendant’s agent had become the plaintiff’s agent to secure him other insurance. He rejects plaintiff’s evidence entirely on this question, and attempts to infer such agency from the declarations of the plaintiff’s agent, whose testimony on the point is as follows: “I stepped into Mr. Miller’s office and asked him for the polic}^ told him that the company had requested me to take it up, told him I w'ould give him another policj1, or write, him in another company as good, and it would not cost him any more.” He made the promise of a new policy before he received the old one, the plain object being to prevent the return of the premium. He neither returned the premium nor requested the plaintiff to sign the cancellation form on the back thereof. He was acting as agent for the defendant. He induced the surrender of the policy without repayment of the premium or cancellation on the false promise of a new policy. Where does the plaintiff’s agency come in ? Docs the deception practised by the defendant’s agent with its presumed knowledge transfer such agent from the defendant to the plaintiff, and at the same time authorize the defendant to keep the premium contrary to the stipulations of its policy? The insurance defendant is undoubtedly bound by the misrepresentations of its agent, made to secure the policy without compliance with the terms thereof, or *352the return of the premium. To hold otherwise is to relieve insurance companies from the ordinary rules governing principal and agent. The principal is bound by the false representations of the agent, though he neither authorized them, nor was informed of them. Crumb v. U. S. Mining Co., 7 Grat. 352; Honaker v. Board of Education, 42 W. Va. 170; Curry v. Hale, 15 W. Va. 867; Sheppard v. Peabody Ins. Co., 21 W. Va. 368; Mecham on Agency, section 739; Hern v. Nichols, 1 Salk 289; Fitzherbert v. Mather, 1 T R. 12; Loche v. Sterns, 1 Metc. (Mass.) 560; Bank v. Kimberlands, 16 W. Va. 555.
Because defendant’s agent did induce plaintiff to turn over the policy to him without refunding the premium, by falsely promising to furnish him another, in lieu thereof, there is no reason why he should be treated as plaintiff’s agent. To accomplish this, not only must the agent’s evidence be strained, but plaintiff’s evidence must be rejected altogether. Plaintiff has a right to deny such agency, and also to testify against the same. There is nothing to work an estoppel against him. He has the right to say how he dealt with the defendant’s agent, and to deny that he gave any commission to him to act in his behalf, and also to say what induced him to surrender the policy contrary to its terms. He has the right to give his understanding of the transaction, and if he is contradicted, it is for the jury to say whether they believe him or not. The court has ho just right to reject his testimony, and then infer from circumstances that do not justify it that plaintiff adopted the defendant’s agent as his agent. The fact that the defendant is an insurance com-¡jany does not justify a departure from the ordinary rule governing similar cases. On the question of the necessity of the return of the premium, the rule is stated to be that as a condition precedenttothecancellationofthe policy in addition to giving the necessary notice, the insuier must return or tender the unearned premium. But where the policy does not require the prepayment of the unearned premium, it is but an incident not effecting the main object, and therefore it is not prerequisite. 16 Am. & En En. Law (2 Ed) 875; Southern Ins. Co. v. Williams, 62 Ark. 382; Manlove v. Ins. Co., 47 Kan. 309. In the latter case, it was held that: “The acts of the insurance company in deciding to close up its business and notifying the plaintiffs that the company would not be liable on its policies issued to them, without *353returning to the plaintiffs the unearned cash premium paid by them" to secure said policies, did not operate as a cancellation of said policies.” The policy in controversy provides that, “If this policy he canceled as hereinbefore provided * * * * * * * the premium having been actually paid, the unearned portion shall be returned on surrender of this policy.” Thus making the return of the unearned portion of the premium a condition precedent to the surrender of the policy. The plaintiff was induced to waive this obligation of the policy on the representation of the defendant’s agent that he would furnish another policy without additional expense. The defendant undoubtedly had complete notice of this representation for it retained the premium and received the policy without requiring the plaintiff to sign the cancellation receipt blank on the back thereof. In short, it was a party to the false promises of its agent, that induced the surrender of the policy without repayment of the unearned premium and received and enjoyed the benefits of such false promises. It is said, however, that plaintiff was guilty of laches in not calling attention to the matter until after his property was destroyed by fire. Plaintiff rested under the assurance of defendant’s agent that a new policy would be given him in lien of the old one, and until such promise was fulfilled, he had the right to feel safe under the old policy. It was for the defendant to look after, and make good the promise of its agent, or to notify the plaintiff of the dissolution of such agency. If it had compelled the agent to make good the unearned premium, or required him to procure a release thereof from the plaintiff, he would have been forewarned so as to have been able to secure other insurance. But the defendant trusted its agent, and plaintiff was led to trust him because defendant retained his premium. He believed he was insured, because he had paid for it, and his money was never returned. Judge BRANNOn's position is that the agent was the defendant’s for the purpose of securing the policy and retaining the premium, but plaintiff’s agent when he neglected to carry out the promises that secured the policy and the retention of the premium. When he tells the truth he is the defendant’s agent; when he makes false promises for the defendant’s benefit, he is the plaintiff’s. This is wholesome argn- . ment for the defendant, who gets the premium without being responsible for the insurance, but it is bad for the plaintiff, who *354pays for the insurance, hut gets it not. The defendant received and retained the premium for insuring plaintiffs property, and it should be held liable for the loss, unless it can show that the policy was unconditionally surrendered by the plaintiff for cancellation. Holden v. Ins. Co., 46 N. Y. 1, (7 Am. Rep. 286); 16 Am. & En. En. Law (2d Ed.) 870. This it has failed to do.