Thomas v. Funkhouser

Bleckley, Chief Justice. Whether tested by the general law irrespective of the particular custom which seems to have prevailed at Borne in the transaction of insurance business, or by that custom itself, there was a prima facie liability on the defendant to answer for the damages in the present case. He was the plaintiff's agent to keep the premises insured. She had reason to rely upon him and to believe that he had done so. Under the code, §2794, there could be no valid contract of insurance without writing. The duty of keeping the property insured would therefore embrace the duty of seeing that some contract of insurance m writing was kept on foot. No such contract covering the period at which this loss occurred was ever consummated, though a policy was written up and might possibly have been delivered if the local custom in respect to collecting the premium had been complied with. But that was not complied with, and hence the writing up of the policy counted for nothing. It is said that it was the company’s fault that the premium was not paid, because the custom was for the companies to send out bills for premiums and in this instance no bill was sent. But it is not sufficient for an agent employed to keep up insurance to put the company in fault. The owner of the property does not want any company to be put m fault, because that would most probably involve a lawsuit. What the owner wants is to have right and regular insurance kept up, so as to avoid trouble and litigation in case loss should occur. It would be unreasonable to allow an agent to turn over a lawsuit to his principal, even though a recovery might ultimately be had, instead of a proper and regular contract of insurance, at least one fully consummated with the insurance company, instead of lacking a material element of con [482] summation according to general law and tire local usage. Tbe court erred in not granting a new tidal. Judgment reversed.