Corrigan v. National Motor Underwriters

ARNOLD, J. — -Tins is an action to recover on a verbal contract of insurance. The cause was tried to the court and there was a finding *114 and judgment ior plaintiff in the sum oí- $3183.28. Altor, motions ior a new trial and in arrest were overruled, "defendant lias appealed. At the request of defendant, the court made a finding of facts which defendant adopts as- the facts in the case for the purposes of this appeal. Plaintiff adopts said statement in part. In addition to the facts stated in the court’s finding, plaintiff calls attention to the abstract of the record to the effect that A. J. Hagele who was the manager for the attorney-in-fact corporation, testified that after notice' of the accident, out of which plaintiff’s loss arose, he looked up the., records to see whether a policy had been issued and found no record, but notwithstanding that fact, he offered a small settlement for the damages and employed an attorney to dpfend the a'ction; t-hat of the group of persons insured at the same time as plaintiff, they had received no written applications, but had paid some losses, arising out of these risks. With this addition plaintiff adopts as his own the statement of facts reflected in the finding of the court. Such finding of facts is rather voluminous and we do not feel warranted in setting it out in full. The salient points therein are as follows1: “1. That defendant was a reciprocal association organized under the laws of Illinois and licensed in Missouri. “2. That tlie defendant was engaged in the general business of writing liability, insurance on automobiles. “3. That E. 0. Heim at the time in issue was general agent for the defendant and was furnished blank policies to fill in, issue and deliver; that he collected premium and received notice of losses and accepted risks of insurance. ' ‘ ‘ 4. That in September, 1924, the defendant through the said agency orally agreed to insure the plaintiff over a period of time covering the date of the loss sued for,. ' ,'"'1 “5. That, the-plaintiff paid the-premium for the insurance. “6. That the plaintiff had an accident with the insured automobile and injured a child. • “7. That the plaintiff notified the defendant of the accident. " “8. That the defendant’s adjuster acting for the defendant investigated the loss, took charge of the case and notified plaintiff to have nothing to do with the case. “9. That the plaintiff -was sued and gave the petition and summons to the defendant and the defendant took charge of, and defended-the case unsuccessfully and argued a motion for a new trial, which was overruled. 10. That after all the above, defendant for the first time denied any liability on account of said accident, suit, claim- and injuries to said child. “11. - That the plaintiff them paid the judgment and settled the claim.with the child.’s-parents: *115 “12. Tlud the' plaintiff’s total loas was ‡2999.80. “13. That the defendant led plaintiff to believe that it was liable to plaintiff under the aforesaid oral contract of insurance. “14.. That the plaintiff was one of a class on which insurance was placed without written application to the defendant. “15. That the defendant issued many policies -without written application.” There is but one assignment of error, to-wit, that the court should have sustained defendant’s demurrer to the evidence timely offered. This point is urged under two sub-headings, viz.: (1) The attorney-in-fact for subscribers at an inter-insurance exchange has no legal capacity to effect, insurance except by a written contract (policy! based upon a written power of attorney (application) executed by the insured; that the terms “inter-insurance” and “reciprocal” insurance are synonymous; that only subscribers thereto can be insured and then only by executing a written power of attorney and being accepted by the attorney-in-fact by the issuance of a written policy; that the only relationship existing between the subscribers is simply one of private contract created by the power of attorney; all rights and obligations to each other are fixed by such contract. It is urged the relationship with the State is between the attorney in fact and the State; that the State, upon specific showing, grants the attorney in fact a. franchise to operate the exchange upon compliance with the statutory requirements. Defendant cites sections 6374, 6375 and 6376, Revised Statutes 1919, in support of this general statement. An examination of -the sections suggested .shows that they are chiefly intended to authorize inter-indemnitv contracts, defining the same and naming the requirements necessary to put such contracts into operation. . ‘ Defendant, in its brief, admits inability to find any decision deter-, minative of the question as to whether an attorney-in-fact for subscribers at an inter-insurance exchange can go beyond the .power expressly granted him by his respective principals and bind them by a contract different from that he is authorized to make. This argument of counsel is based upon the theory that an oral contract of insurance may not be legally entered into by defendant herein. Defendant admits that an oral contract of insurance may be made but not as applied to inter-indemnity contracts and cites two cases from foreign jurisdictions which it claims support this theory, to-wit: Schilbrek v. Casualty Co. (Wis.), 192 N. W. 456; Salquist v. Relief Assn. (Ore.), 197 Pac. 312, 100 Ore. 416. An examination of these, cases shows they do not apply to the facts herein and are not a convincing basis upon which this case properly may be determined. An oral contract'of insurance is based upon ’a ■ common-law .right ■ and would apply ’to the defendant association, unless prohibited by *116 statute. There appears to be nothing in our statute to abrogate this common-law right. Section 6385, Revised Statutes 1919, cited by-defendant, declares that no law of this State relating' to insurance shall apply to such associations as the defendant. It is understood the term “law of this State” refers to statutory law and not to the common law, and there being nothing in our statutes forbidding oral insurance by the defendant and similar companies, it follows that the common-law right thus to contract orally still exists. It was held in Breckinridge v. Ins. Co., 87 Mo. 62: “The powers of insurance agents are presumed to be co-extensive with the business entrusted to their care and are not to be narrowed by restrictions or limitations not; communicated to the party dealing with him.” Also in Lingenfelter v. Ins. Co., 19 Mo. App. 252, the court said: “It is not essential’to'the validity of a contract of insurance that it should be evidenced by a written policy. A parol contract is sufficient. Insurance is simply a contract whereby one for a consideration undertakes to compensate another if he shall suffer loss. . . . The policy, in the absence of a contrary stipulation and understanding, during negotiations, is only evidence of the contract.” The law is well settled to the effect that a resident agent of a foreign insurance company may bind his principal by oral contract of insurance. [Murphy v. Ins. Co., 268 S. W. 671; State v. Revelle, 165 S. W. 1081.] The case last cited applies to reciprocal insurance. A parol contract may be binding on a corporation if made by it or by an authorized agent. [King v. Ins. Co., 195 Mo. 290, 92 S. W. 892.] Defendant insists that, in the case at bar, plaintiff presents at best only an oral contract to insure, and not a contract of insurance, but we fail to find any consolation for defendant in this situation, in the face of the holding of the Supreme Court in Baile v. Ins. Co., 73 Mo. 371, Avherein it is said: “Both at common law and under the statute of this State a verbal agreement to insure is binding and. in case of loss will be specifically enforced against the insurer.” The testimony of record herein shows that defendant’s attorney-in-fact had sole and complete charge of its affairs; that he determined and accepted risks and made all contracts between the company and the insured. This being so, the public had no dealings with any other entity. Furthermore, there is no evidence of record herein showing the extent to which the attorney-in-fact was authorized to go. Under its second subheading- defendant insists that a contract binding an inter-insurance exchange cannot be.,brought into legal existence by a mere waiver; that the attorney-in-fact could do nothing by waiver that it had no legal capacity to do in an express contract. But, inasmuch as the trial court properly decided that the attorney-in-fact had the power to bind its principal in an oral contract of in *117 snrance and did so bind it, the question of waiver is out of the case. Defendant insists waiver ivas- pleaded in the answer. Be it so, under our holding the situation is not changed and we need not discuss that point further. Plaintiff insists there is no just reasonable ground for the appeal in this case and therefore asks the penalty authorized by sec. 1515, Eevised Statutes 3919, be invoked against defendaut. Under the facts of record we do not feel warranted in invoking the penalty as suggested and therefore hold against plaintiff on this point. We fail to find reversible error of record and accordingly the judgment is affirmed. Bland, J., concurs in separate opinion; Trimble, P. J., absent.