Travelers' Fire Ins. v. Price

Anderson, J., delivered the opinion of the court. Appellee brought this action against appellant on an automobile insurance policy issued by appellant to appellee on the 4th day of October, 1932, insuring appellee against loss of her Chevrolet automobile by theft or fire, alleging that while the policy was in force the automobile was stolen and afterwards destroyed by fire. Appellant defended upon two grounds, namely: That ap *536 pellee had violated the sole and unconditional ownership clause of the policy, also the clause providing against the use of the car as a public conveyance for hire. The court directed a verdict for appellee. Judgment was entered accordingly, from which appellant appeals. Appellee’s reply to those defenses was that those clauses of the policy had been waived by the appellant. The policy contained the usual sole and unconditional ownership clause. It provided, among other things, that if appellee’s interest in the automobile should “be or become other than unconditional and sole lawful ownership . . . or in case of transfer or termination of the interest of the assured other than by death of the assured, or in case of any change in the nature of the insurable interest of the assured in the property described herein, either by sale or otherwise,” the policy should be void, unless provided by agreement, in writing, attached thereto; and also if the automobile should be “used as a public or livery conveyance for carrying-passengers for compensation,” the policy should become void, unless otherwise provided by agreement, in writing, attached thereto. The policy concluded with this paragraph: ‘ ‘ This policy ■ is made and accepted subject to the provisions, exclusions, conditions and declarations set forth herein or endorsed hereon, and upon acceptance of this policy the assured agrees that- its terms embody all agreements then existing between himself and this company or any of its agents relating to the insurance described herein, and no officer, agent or other representative of this company shall have power to waive any of the terms of this policy unless such waiver be written upon or attached hereto; nor shall any privilege or permission affecting the insurance under this policy exist or be claimed by the assured unless so written or attached. This policy shall be void in event of violation by the assured of any agreement, condition or declaration contained herein or in any rider now or hereafter attached hereto.” *537 The insurance was effected through J. H. Johnson & Co., Inc., an insurance agency representing appellant and other insurance companies. This agency had in its employ Dwight Taylor, whose authority was confined to soliciting insurance and collecting premiums; he had no authority to issue policies of insurance, nor add to or in any manner modify policies issued by his principal. He was solely a soliciting and collecting agent. Taylor solicited and procured the application for the policy here involved. The policy, however, was issued and delivered, not by Taylor, but by his principal, J. H. Johnson & Co., Inc. The annual premium provided in the policy was eleven dollars and fifty cents; none of it was paid. The policy was delivered and went into .effect without its payment. The policy was dated and took effect October 4, 1932. At the time the policy was delivered, appellee was the sole and unconditional owner of the automobile, and it was used alone for family and business purposes. Later, however, appellee’s husband, with her consent, made a conditional sale and transfer of the automobile to the Central Cab Company. Thereafter the automobile was driven by appellee’s husband and used by the Central Cab Company as a public conveyance for hire. While it was being so used, Taylor, the soliciting and collecting agent, approached appellee’s husband to collect the premium, which was still unpaid. Taylor was informed by appellee’s husband of the transfer of the automobile to the Central Cab Company and of the fact that it was being used as a public conveyance for hire, and asked Taylor if those facts would void the policy. Taylor replied that they would not. Thereupon appellee’s husband paid Taylor four dollars on the premium, leaving a balance due of seven dollars and fifty cents, which he agreed to pay later. Three or four days after this payment, and on the 23rd of November, 1932, the automobile was stolen, and a few days later was found damaged by fire to the extent of two hundred sixty dollars. *538 Appellee aud her husband both admitted in their testimony that they had read the policy time and again and were familiar with its terms, but that they acted on Taylor’s assumed authority to waive its provisions. Barksdale, the manager of J. H. Johnson & Co., Inc., testified, and his evidence is undisputed, that Taylor had no authority to modify or waive any of the provisions of the policy, and that this company not only had not ratified any pretended waiver or change in the policy by Taylor, but had no knowledge thereof. The waiver by Taylor was not indorsed on the policy in writing. Taylor did not testify. There is nothing in the record to show what became of the four dollars collected by Taylor on the premium. It will be observed from the above statement of the case that all the facts relied on as constituting a waiver occurred after the policy had been in effect at least a month and a half. If section 5196, Code of 1930, has no application, and we are of opinion that it has none, the question involved is controlled by the principles of common law. The statute is in this language: “Every person who solicits insurance on behalf of any insurance company, or who takes or transmits, other than for himself, an application for insurance, or a policy of insurance, or who advertises or otherwise gives notice that he will receive or transmit the same, or who shall receive or deliver a policy of insurance of any such company, or who shall examine or inspect any risk, or receive, collect or transmit any premium of insurance, or making or forward a diagram of any building, or do or perform any other act or thing, in the making or consummation of' any contract of insurance, for or with any such insurance company other than for himself, or who shall examine into or adjust or aid in adjusting any loss for or on behalf of any such insurance company, whether any of such acts shall be done at the instance, or request, or by the employment of the insurance company, or of, or by any broker of *539 other person, shall be held to be the agent of the company for which the act is done or the risk is taken as to all the duties and liabilities imposed by law, whatever conditions or stipulations may be contained in the policy or contract; such person knowingly procuring by fraudulent representations, payment, or the obligation for the payment, of a premium of insurance, shall be punished by a fine of not less than one hundred dollars nor more than five hundred dollars, or be imprisoned for not more than one year.” So far as the statute goes it is in derogation of the common law. It must not be extended beyond its intent and terms. We think it manifest that it applies alone to what takes place before and up to and including the consummation of the insurance, and after its consum mation what takes place in the examination and adjustment of the loss. The phrase “or do or perform any other act or thing in the making or consummation of any contract of insurance” limits and qualifies what goes before it, and the language further on down, “or who shall examine into or adjust or aid in adjusting any loss for or on behalf of any such insurance company,” has reference alone, of course, to the adjustment of the loss. As to all other matters and things, the principles of the common law govern. This construction of the statute reconciles what otherwise appears to be a conflict in some of the decisions of our court. Stewart v. Coleman & Co., 120 Miss. 28, 81 So. 653; Mutual Life Ins. Co. v. Vaughan, 125 Miss. 369, 88 So. 11; New York Life Ins. Co. v. Smith, 129 Miss. 544, 91 So. 456; Hartford Fire Ins. Co. v. Clark, 154 Miss. 418, 122 So. 551; Lamar Life Ins. Co. v. Kemp, 154 Miss. 890, 124 So. 62; Interstate Life & Accident Ins. Co. v. Ruble, 160 Miss. 206, 133 So. 223; American Bankers’ Ins. Co. v. Lee, 161 Miss. 85, 134 So. 836; St. Paul Fire & Marine Ins. Co. v. Loving, 163 Miss. 114, 140 So. 727; and Home Ins. Co. of New York v. Thornhill, 165 Miss. 787, 144 So. 861, are all cases in which the insurance companies *540 sought to void the policies on account of what occurred before and during the consummation of the insurance contracts. There is no decision, so far as we are able to ascertain, applying the statute to what took place after the contract was consummated and became effective. The statute being out of the way in this case, as stated, the governing principles are those of the common law. It should be borne in mind that the waiver claimed in this case was not through any act or conduct on the part of appellant’s general agency, J. H. Johnson & Co., Inc., but through a mere soliciting and collecting agent employed by the latter. The applicable principles of the common law were very fully discussed and laid down in New York Life Ins. Co. v. O’Dom, 100 Miss. 219, 56 So. 379, Ann. Cas. 1914A, 583. It was held .in that case that such an agent was without power to modify the contract of insurance or waive any of its conditions; that a stipulation in the contract that the agent was without power to do so was binding on the insured; and that the insured was affected with notice of such stipulation, whether he actually knew it or not. (As stated, appellee had read and knew the contents of her policy.) The principles laid down in that case were recently reaffirmed in the cases of Interstate Life & Accident Ins. Co. v. Mrs. Cora Pannell (Miss.), 152 So. 635; Mutual Life Ins. Co. v. Hebron, 166 Miss. 145, 146 So. 445; and Stonewall Life Ins. Co. v. Cooke, 165 Miss. 619, 144 So. 217, all of which were cases where what was claimed as a waiver took place after the consummation of the insurance. Appellee either knew or should have known — she was affected with notice — of the sole and unconditional ownership and the public conveyance for hire clauses in her policy, and that the soliciting and collecting agent had no right, under the plain language of the policy, to waive those clauses, and that such a waiver amounted to nothing, would not be binding on appellant. Appellant, therefore, had the right to stand on those clauses. The result is appellant was entitled to a directed verdict. Eeversed and judgment here for appellant.