Court Opinion

ID: 5044349
Source: CourtListenerOpinion
Date Created: 2021-10-01 07:07:40.839471+00
Date Added: 2024-06-11T08:18:42.327658
License: Public Domain

BARDGETT, Judge
(dissenting).
I respectfully dissent.
Farmers Insurance Exchange (hereafter Exchange) sent Mrs. Carty the printed expiration note set forth in the principal opinion. There were no conditions set forth in the note for renewal of the policy other than payment of premium within 15 days of November 18, 1971. The option to renew would expire at midnight December 3, 1971. Mrs. Carty had the right to decide on November 18 that she would not renew the policy and thereafter change her mind and renew it. Her right to do so did not depend upon whether she had an automobile accident in the meantime.
If, instead of sending the premium payment on December 2, 1971, to Duncan to reimburse him for paying the premium for her, she had sent it to Exchange on December 2, 1971, there would appear to be no question but what the policy had been renewed and coverage afforded for the accident of November 24, 1971.
But to send the check to Exchange would merely have been to provide Exchange with a double premium. So, Mrs. Carty did the sensible thing and reimbursed Duncan in the amount he had advanced to pay the premium and there is no question as to whether or not the renewal premium had been paid within the grace period. It had been paid.
Mrs. Carty was the insured party to this contract, not Mr. Duncan. Her approval and ratification of Mr. Duncan’s payment of premium for her was not conditioned at all. Furthermore, it would appear from the renewal notice she received from Exchange that she had no right to make a conditional payment of the premium or conditionally accept the renewal offer.
The opinion of the Missouri Court of Appeals, Springfield District, reversed and remanded this case with directions to enter judgment holding that coverage was afforded by the Exchange policy, saying:
“ ‘[W]hen one acting as agent, although without previous authority, makes a contract for the benefit of another, the latter may at any time afterwards, while the contract is in force, adopt and ratify the act, and thus entitle himself to all its benefits, as fully as if he had given express authority to make the contract. A contract of insurance is no exception to this general rule; . . . .’ Ferguson v. Pekin Plow Co., 141 Mo. 161, 172, 42 S.W. 711, 713 (1897). The overall holding that ratifica*787tion may be shown from any acts or conduct by the principal which reasonably shows an intention to ratify unauthorized acts done on his behalf, is especially applicable where the principal makes payment on account of benefits received as a result of the act of the agent. 2A C.J.S. Agency, § 88, pp. 692-693. This is true whether the principal reimburses the agent for moneys expended on his behalf (Buck v. Houghtaling, 110 App.Div. 52, 96 N.Y.S. 1034, 1036-1037[1] (1905)) or whether the principal makes payment directly to the third party. Clark v. Gneiting, 95 Idaho 10, 501 P.2d 278, 280-281[8] (1972).
“It is not necessary to a valid and effe-citve ratification that it be communicated to the other party (Restatement, Second, Agency § 95; 2A C.J.S. Agency § 79, at p. 675), and ratification becomes self-evident and fixed ‘if the purported principal, with knowledge of the facts, in an action in which the third person ■ . . . is an adverse party: (a) brings suit to enforce promises which were part of the unauthorized transaction or to secure interests which were the fruit of such transaction and to which he would be entitled only if the act had been authorized; or (b) bases a defense upon the unauthorized transaction as though it were authorized; or (c) continues to maintain such suit or base such defense.’ Restatement, Second, Agency § 97; Restatement, Agency § 97.”
As to the question of whether parol evidence was admissible to show the conditional payment of premium by Mr. Duncan for Mrs. Carty, the court of appeals opinion held the parol evidence to be inadmissible, saying:
“Actually the parol evidence rule is one of substantive law, not one of evidence, so that parol evidence cannot alter a written contract or establish another or varied one in its stead even though the evidence be injected without objection. Melton v. Ensley, 421 S.W.2d 44, 51[6, 7] (Mo.App.1967), and authorities cited therein note 3. Insurance contracts come within the parol evidence rule (Prestigiacamo v. American Equitable Assur. Co., 240 Mo.App. 839, 846-847, 221 S.W.2d 217, 221[2] (1949); 32A C.J.S. Evidence § 908, p. 275 et seq.), and the rule is particularly applicable to liability insurance policies. Hartford Accident & Indem. Co. v. Farmington Auction, 356 S.W.2d 512, 520[10] (Mo.App.1962).
“In an effort to support the holding below, Exchange relies on the proposition that the parol evidence rule does not apply to ‘mere receipts’ which may be contradicted by showing that the money receipted for was not, in fact, paid. 32A C.J.S. Evidence § 926, at p. 302. But this ignores the equally long recognized rule that ‘[Although the writing may take the form of a receipt, it may also have the elements of a contract, and in so far as it expresses the contract or is contractual in its nature, it is a contract between the parties and is subject to the same rules as other contracts in regard to being explained or added to or contradicted by parol evidence. The paper may acknowledge the receipt of money and may at the same time be a contract or an agreement because of its terms.’ Eggimann v. Houck, 240 S.W. 478, 480[2] (Mo.App.1922).
“ ‘Insured’s Receipt’ prepared, signed and delivered by the agent for Exchange, was more than a simple acknowledgment of having received from ‘Loren Duncan for Norma J. Carty’ a check for $55; it also evidenced a ‘Renewal’ of the insurance policy. Huff’s testimony did not contradict the receipt of the check, for this is not denied. Instead, his testimony was designed to show that the consideration which was admittedly delivered was given for an agreement different from what the writing said. This was not proper. State ex rel. and to Use of Alport v. Boyle-Pryor Const. Co., 352 Mo. 1061, 1068-1069, 180 S.W.2d 727, 730[3, 4] (1944).
“A writing is to be judged by its subject matter, not by the name bestowed (Hamm v. Hamm, 437 S.W.2d 449, 452 (Mo.App.1969)), and the denomination of the instrument in question as an ‘Insured’s Receipt’ by Exchange, did not transform it, per se, *788into a ‘mere receipt.’ When the statement as to consideration ‘is more than one of mere recital or acknowledgment and is essentially of a contractual or executory nature, it can no more be changed or contradicted by parol or extrinsic evidence than any other part of the written instrument.’ Hardin v. Ray, 404 S.W.2d 764, 771[12] (Mo.App.1966). A renewal receipt is more than a mere receipt for money; it is written evidence of a contract and may not be adulterated by parol evidence. Craig v. National Farmers Union Automobile & Cas. Co., 76 S.D. 349, 78 N.W.2d 464, 467[6] (1956); Lewis v. Western Assur. Co., 175 Tenn. 37, 130 S.W.2d 982, 983 (1939); 44 C.J.S. Insurance § 287, p. 1136.”
I believe the opinion of the court of appeals was correct in its analysis of the issues and its decision holding that the Exchange policy was in effect, and therefore I dissent.