Court Opinion

ID: 6543626
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:17:48.942673+00
Date Added: 2024-06-11T15:55:54.240687
License: Public Domain

Wood, J., (after stating the facts). The findings of fact are comprehensive and accurate. We do not discuss the evidence upon which these findings are based for the reason that objection is urged here, not to the findings of fact, but to the legal conclusions drawn from them. 1. Appellants asked the court to declare the law to be “that the insurance contract sued on herein is a contract of indemnity, and that no liability is incurred thereon until the insured suffers a loss, and that the loss in this case would be an actual payment of the judgment rendered in favor of Callie Meredith.” The contract speaks for itself. It is couched in unequivocal language. The insurer binds himself to pay “all damages with which the insured might be legally charged, or required to pay, or for which it might become legally liable. ” This is plainly a contract to pay liabilities. But if it could be said that the meaning were left in doubt on account of any ambiguity in the language of the contract, the proof leaves no doubt that it was the intention to require the insurance company to pay to the street railway company the damages for which it (railway company) should become liable. The insured insisted upon a contract to pay liabilities, and the insurer consented to make it that way, embracing this special feature by way of interlineation in writing upon a printed form of contract. After it was so written, the general agents, in a letter to the insured, in which they enclosed the contract, mentioned this special feature, saying: “We think, with this amendment to the policy, you have the best insurance issued.” This is not simply a contract of indemnity. It is more. It is also a contract to pay liabilities. The difference between a contract of indemnity and one to pay legal liabilities is that upon the former an action cannot be brought and a recovery had, until the liability is discharged; whereas upon the latter the cause of action is complete when the liability attaches. Locke v. Homer, 131 Mass. 93, and authorities cited; Jones v. Childs, 8 Nev. 121; Carson, etc., Ass’n v. Miller, 16 Nev. 327-32; Smith v. Railway Co., 18 Wis. 17; Thompson v. Taylor, 30 Wis. 68; Rector, etc., of Trinity Church v. Higgins, 48 N. Y. 532; and numerous other cases cited in appellees’ brief. Also Maloney v. Nelson (N. Y.), 39 N. E. Rep. 82; Solary v. Webster (Fla.), 17 So. 646; Gilbert v. Wiman, 1 N. Y. 550, cited in brief of appellants. The measure of damages is the amount of the accrued liability. Wicker v. Hoppock, 6 Wall. 94; Churchill v. Hunt, 3 Denio, 321; Pierce v. Plumb, 74 Ill. 326. Mrs. Meredith had recovered a judgment against the City Electric Street Railway Company from which the company had not appealed. This judgment was a legal liability against the street railway company, for which, under its contract with the insurance company, the railway company was entitled to recover. Powers of insurance 2. Appellants insist that Parker & Co. had no authority to deliver the policy without collecting the premium. This is not the law. “A general agent of an insurance company, whose business it is to solicit applications for insurance, and receive first premiums, has the right to waive the condition requiring payment in money, and to accept the promissory note of the applicant, or of a third' party in lieu thereof, or to undertake to make the payment to the company himself; and, when the cash payment is actually waived in either of these modes, the contract binds the company, notwithstanding the recital in the policy that it is not binding until the first premium is paid in cash.” This excerpt, quoted by counsel for appellees from Miss. Valley Ins. Co. v. Neyland, 9 Bush, 430, is according to the consensus of modern authority. Southern Life Ins. Co. v. Booker, 9 Heisk. 606; Miller v. Life Ins. Co., 12 Wall. 285; Boehen v. Ins. Co., 35 N. Y. 131; Ins. Co. v. Colt, 20 Wall. 560; Goit v. Ins. Co., 25 Barb. 189; Sheldon v. Ins. Co., 26 N. Y. 460; Wood v. Ins. Co., 32 N. Y. 619; Bragdon v. Ins. Co., 42 Me. 262; Trustees, etc., v. Ins. Co., 18 Barb. 69; May, Ins., sec. 134, and other cases cited by counsel for appellees. The policy under consideration contained no provision requiring payment of the premium in cash as a condition precedent to the delivery of the policy and its taking effect. The court, however, evidently treated the matter as though such a condition existed, but found that it had been waived. The proof showed that Parker & Co. were general state agents, and had authority to make terms for insurance, to countersign and deliver policies, and collect premiums; and that they sometimes collected when the policy was delivered, sometimes at the end of the month, and sometimes took notes. They carried a general account with the company, and on the 10th of each month sent to it what was due upon a general balance. The policy having been delivered unconditionally, without a payment of the premium in cash, the court’s finding that such payment had been waived, in view of this proof, and the law as announced, sufra, was clearly correct. The delivery of the policy without condition, and without exacting payment of the premium in cash, raised the presumption that a short credit was intended. Behler v. Ins. Co., 68 Ind. 347, and numerous cases there cited; Miller v. Life Ins. Co., 12 Wall. 303 Little v. Ins. Co., 38 Ohio State, 110. Effect of cancellation of policy. 3. The issuance and delivery of the policy to the assured for a valuable consideration agreed upon and expressed therein, and the acceptance of the policy by the assured, put said policy in force. See authorities already cited. By the express terms of the policy, the insurance company was liable to the street railway company for all damages occasioned by injury to its passengers for which it (street railway) was liable, from the 9th of December, 1892, until its policy was cancelled. The policy was not cancelled by the insurance company until the 23d day of January, 1893. The liability sued on had supervened in the meantime. While the insurance company had the right to cancel the policy for the non-payment of the premium, as per the contract between the parties, it had no power to make this cancellation relate back and avoid the policy ab initio. Had it not cancelled the policy, but continued same in force one year, the assured would have been liable to the insurer for the entire premium. If the entire premium had been paid, and no liability had accrued between the time of the execution of the policy and the time of cancellation, the insurer might have cancelled the policy, under certain conditions therein contained, by refunding the premium less the fro rata portion thereof for the time the policy was in force. If, in the meantime, a liability had accrued, cancellation without the assent of assured could only take place by refunding the premium, less the pro rata for the time the policy had been in force, and also by the payment of intervening liabilities. Now, in the present case, while the premium had not in fact been paid, credit had been extended, and, before any demand had been made for the payment of the premium, the liability accrued. The insurer also a short time thereafter cancelled the policy, thus electing not to insist upon the payment of the premium. The liability of the insurance company to the street railway company at the time of the cancellation of the policy, and at the institution of this suit, exceeded the entire amount of the premium. Under such circumstance, the most that the insurance company could demand would be to have the amount of premium which had been earned while the policy was in force deducted from the amount of its liability to the assured. This the court did, and its judgment is correct. Affirmed.