Wallace v. Hartford Fire Insurance

MORGAN, J. This is an action for damages which was, by agreement of the parties, tried to the court without a jury. It grew out of the following facts, either admitted or established by a preponderance of the evidence to the satisfaction of the trial court, and which we will assume to be true, in conformity with the well-known rule that “an appellate court will not disturb the judgment of a trial court, because of conflict in the evidence, where there is sufficient proof, if uncontradicted, to sustain it.” (Sweeten v. Ezell, 30 Ida. 154, 163 Pac. 612; Davenport v. Burke, 30 Ida. 599, 167 Pac. 481; Lambrix v. Frazier, ante, p. 382, 171 Pac. 1134.) On and about June 2, 1913, and continuously thereafter until subsequent to July 8th of that year, appellant, Strickfadden was the agent, at Ft. Lapwai, Idaho, of appellant, Hartford Fire Insurance Company, authorized to make and — 484 — negotiate contracts of fire insurance, write and deliver insurance policies, collect premiums therefor, and, generally, to represent it as its agent in all matters relating to such .contracts in that community. At the same time he was cashier of the bank at Ft. Lapwai and from prior to June 2, 1913, until several months thereafter respondent had a deposit in the bank, in the form of a checking account, continuously, in excess of $200, from which Strickfadden had fuE authority to withdraw the amount of the premium which, as will be hereinafter shown, he agreed to issue in appellant company. From prior to June 2, until July 8, 1913, respondent was the owner of a stock of drugs and drug-store furniture and fixtures, at Ft. Lapwai, of the value of $5,200. During all the time respondent resided in Ft. Lapwai his insurance policies were kept in the bank and Strickfadden had access to them, and the latter, prior to June 2, 1913, had, as agent for a fire insurance company, other than the Hartford, insured respondent’s stock of goods, furniture and fixtures, and had collected the premium by deducting the amount thereof from his deposit and making out a cashier’s charge slip therefor which was delivered to him with his canceled checks. In addition to the insurance procured from Strickfadden respondent had a policy, written by an agency in Spokane, Washington, in a company other than the Hartford, in the sum of $1,500, $1,200 of which was on his stock of goods and $300 on the furniture and fixtures. The premium on this policy was $31.50 and its term of existence was one year, from July 1, 1912, to July 1,1913. It was placed in the bank, for safekeeping, and Strickfadden had access to it. Prior to June 2, 1913, Strickfadden solicited from respondent the insurance business represented by this last-mentioned policy, when it should expire, and on the last-named date he was in the latter’s place of business when he received by mail and called attention to a notice from the Spokane agency that the date of expiration was July 1st. Strickfadden, at that time, again requested to be allowed to write the insurance and it was agreed between him and respondent that he should write it in appellant company in the same amount as that expressed — 485 — in the expiring policy, and that he should procure and refer to said policy for data necessary to enable him to prepare the one he was to issue. Twice thereafter, during the month of June, respondent asked Strickfadden if he had written the policy and on each occasion he stated he had not, but would attend to it the next morning. Belying upon this agreement and assurance respondent permitted his policy to expire on July 1st, without procuring a renewal or other insurance in lieu thereof, and on July 8th his stock of goods, furniture and fixtures except property of the value of $1,000, which was salvaged, were destroyed by fire. The loss was partly covered by a valid policy amounting to $1,500, which was paid, leaving a net uninsured loss of $2,700. The trial court found that by the neglect and failure of appellants to make the policy of insurance, according to the agreement, respondent was damaged in the sum of $1,500, less $31.50, the amount of the premium he would have paid had the policy been issued, together with interest, amounting in all to $1,719, for which sum, and costs, judgment was entered. This appeal is from the judgment and from an order denying a motion for a new trial. Appellants, in their briefs of argument, seem to proceed upon the theory that this action is based upon an oral contract of, or for, insurance. This is erroneous. The nature of the action is to be determined from the pleadings. The substance of the complaint is that appellants, for a valuable ■consideration, agreed to insure respondent’s property; that he relied upon their agreement and did not procure insurance; that his property was destroyed by fire, and that, by reason of the negligence of appellants, in that they failed to issue the policy and insure the property, he has been damaged. Beference to the 'agreement to issue the policy is made, in the complaint, by way of inducement, showing how the duty to issue it arose. The gist of the cause of action is that respondent was procured to not obtain insurance, and that appellants, by negligence, failed to perform that duty whereby he suffered damage. Strickfadden’s answer is a denial of such allegations of the complaint as are not ad — 486 — mitted by his failure to answer them. It may be said to place the material allegations of the complaint in issue. The Hartford Fire Insurance Company, in its answer, admits its corporate existence and its right to transact business in the state of Idaho; denies the allegations of the complaint, and further denies, among other things, that it ever agreed to, or was obligated to, write any policy of insurance in favor of respondent. This is not to be confused with that class of cases wherein actions have been brought to recover, in whole or in part, indemnity provided for in contracts of insurance, executed or executory, written or unwritten, express or implied. Respondent does not rely upon such a contract and neither appellant alleges, and the company expressly denies, that one existed. It is clear it was not the intention of the parties that the oral agreement to write and execute a policy was, itself, a contract of insurance. Respondent and Striekfadden both understood that the policy, when written and executed, should be such a contract and that none would exist until that was done. All the necessary terms and conditions of the proposed policy were incorporated in the promise of Striekfadden and his conduct in procuring respondent to not renew his expiring policy, coupled with his failure, because of his negligence, to keep that promise, whereby respondent lost his property without the protection a policy of insurance would have afforded him, was a tort. (Duffie v. Bankers’ Life Assn., 160 Iowa, 19, 139 N. W. 1087, 46 L. R. A., N. S., 25; Boyer v. State Farmers’ Mutual Hail Ins. Co., 86 Kan. 442, Ann. Cas. 1915A, 671, 121 Pac. 329, 40 L. R. A., N. S., 164; Chenier v. Insurance Company of North America,, 72 Wash. 27, Ann. Cas. 1914D, 649, 129 Pac. 905, 48 L. R. A., N. S., 319; Campbell v. American F. Ins. Co., 73 Wis. 100, 40 N. W. 661.) In 38 Cyc. 426, it is said: “As has likewise been seen, tort consists in the violation of a right given or the omission of a duty imposed by law. Therein it differs from contract, where right is granted and obligation assumed by agreement of the parties. Hence to determine the form in which redress must be sought, it is necessary to ascertain source or origin. If — 487 — it be found that right or duty was created independent of the consent of the parties concerned, the action is in tort; if because of such consent, it is on contract. Where the only relation between the parties is contractual, the liability of one to the other in an action of tort for negligence must be based upon some positive duty which the law imposes because of the relationship or because of the negligent manner in which some act which the contract provides for is done. The question in all cases is whether, if the allegation as to the contract were stricken out, any ground of action would remain. “It does not militate against the correctness of the rule just stated that a tort may grow out of or be coincident with a contract, and that suit will lie in tort for an act of misfeasance or malfeasance, although a contractual relation may exist between the parties. ‘Where there is an employment, which employment itself creates a duty, an action on the case will lie for a breach of that duty, although it may consist in doing something contrary to an agreement made in the course of such employment, by the party upon whom the duty is cast. ’ 'The rule has frequently been applied in actions against common carriers and other bailees, factors, brokers, and other agents, telegraph and telephone companies, physicians and surgeons, and in many other eases.” It is contended there is a misjoinder of parties defendant and that this action cannot be maintained against both the principal and agent. This contention cannot be sustained. The acts and omissions resulting in respondent’s damage were those of Strickfadden for which he is clearly personally liable. The liability of the company arises from the following rule quoted from 2 C. J., p. 850: “A principal is also liable for the negligent acts of his agent within the scope of his employment and the course óf his duties, resulting in injuries to the person or property of another, although the negligence causing the tort occurs while the agent is' deviating from the method in which he has been directed to perform the principal’s business, unless the negligent aet is committed while he is wilfully deviating from the instructions which the principal has given him.” (See, also, Storey on Agency, — 488 — 9th ed., sec. 452.) Their joint liability is discussed in the same volume of Corpus Juris, on page 903, as follows: “Where an agent and his principal are both liable for the same act of negligence, or the same tort, they may be joined as parties defendant in an action to recover damages for the injuries caused thereby. They may be sued either jointly or severally like other joint tort-feasors.” The motion 'for a new trial was without merit. The judgment and order appealed from are affirmed. Costs are awarded to respondent.