Howard Insurance v. Owen's Admr'x

JUDGE LEWIS DELIVERED THE OPINION OF THE COURT February 24, 1884, appellee, J. Y. Owen, residing and having a store-house in the village of Corydon, Henderson county, communicated by telephone with R. G-. Adams, agent, at the city of Henderson, ten — 200 — miles distant, of appellant, the Howard Insurance-Company, about obtaining a policy of insurance on his building. And it was on that occaion agreed by Adams to insure it for one year for the amount and at the consideration fixed upon by them, Owen being informed by Adams, in substance, and relying upon the assurance, that the contract was made and his store-house then insured by the Howard Insurance Company. But about February 29, Adams requested Owen to make a formal application to the company for the insurance, and sent the blank for that purpose by his special solicitor, Hardwick; though at the same time Owen was assured his right-under the verbal contract should not be thereby impaired. Owen did, as requested, fill up and sign the application, showing situation and character of his house, and delivered or sent it to Adams, who forwarded it to the general manager of the company at Toledo, O. March 6 Adams made' entry of the verbal contract in the policy register kept by him for such purpose, of which he notified Owen. And March 13 he again notified him his property was insured, and also that a written policy, made out in pursuance of' the verbal contract, would be sent to him as soon as a supply of blanks, of which he then had none, was received from headquarters of the company. March 15, Adams having received the policy already signed in blank by the president and secretary of the company, filled up and countersigned it himself as agent. But March 15, at night, after execution, but prior to delivery, of the policy to Owen,, the store-house was totally destroyed by fire. — 201 — It appears the general manager at Toledo, upon receiving the application made February 29, rejected it, and by letter dated and mailed March 12 to Adams at Henderson, notified him of the rejection. Nevertheless, March 17, Adams accepted from Owen the amount of premium previously agreed upon, though not before paid, and delivered to him the policy running from March 6 for one year ; and this action was-brought to recover on it the amount for which it is alleged the store-house was insured. On the former appeal, this being the second, the single question was as to sufficiency of the plea of' limitation sustained by the lower, though decided adverse to defendant by this, court. But we are now required to revise a judgment in favor of plaintiff for amount sued for. The statute of frauds has no application to the case, nor does the petition contain two distinct causes of action, as counsel argues. In Security Fund Ins. Co. v. Kentucky Marine Ins. Co., 7 Bush, 81, it was held by this court, in accordance with established doctrine, that “a contract to issue a policy as an executory agreement to insure may be binding without any written memorial of it;” and further, that “a court of equity having jurisdiction for specific enforcement, would, to avoid unnecessary circuity, adjudge the damages just as if a policy had been executed, and an action had been brought on it for loss of the thing thereby insured.” This action is not, however, based at all upon the verbal agreement, but alone upon the policy executed and delivered in pursuance of it; and evidence in — 202 — regard to terms of that agreement, and circumstances under which it was made, would be neither necessary or pertinent, except for the purpose of determining the decisive question, whether Owen was legally entitled to the policy, and Adams had authority and was bound to deliver it at the time he did so. On the trial the jury was instructed that “Adams was general agent of defendant for the purpose of making contracts of insurance and issuing policies of insurance for the defendant against loss or damage by fire upon property situated in Henderson, Kentucky, and vicinity, subject to the limitations contained in the paper entitled Instructions for Agents, filed with deposition of Adams, and read in evidence.” It seems to us the defendant had no cause to complain of that instruction, because Adams was, in terms of the paper referred to, appointed its agent, and empowered to make contracts of insurance and to issue policies of insurance. Besides, his possession of blank policies, signed by the president and s jcretaxy, afforded evidence of his general agency sufficient to justify a person making a contract of insurance with him, and in accepting and treating as valid and enforceable a policy issued and delivered by him. The qualifying clause of that instruction would, however, have been prejudicial to plaintiff, if not explained by other instructions, which seems to have been done; for the power of an agent can not be limited by special private instructions so as to affect a contract of insurance, unless the insured had notice, or there is something in. the nature of the business or circumstances of the case to indicate, the — 203 — agent acted under such special instructions. (May on Insurance, section 126.) Very many exceptions to rulings at the trial on competency of evidence were taken, and are now urged as reasons for reversal of the judgment; but we need not refer to them in detail, because satisfied, after examining the bill, of exceptions and evidence, that the facts we have recited were beyond question established by evidence entirely competent; and as these facts clearly involve- an agreement between Owen and Adams for insurance by defendant of the store-house in question, and for delivery of a policy of insurance, and also authority of Adams to make the contract and deliver the policy, there necessarily follows the right of Owen to recover the amount at which the property was agreed to be insured, unless he did some subsequent act equivalent to a waiver or estoppel of his right to the policy, or acted in bad faith or collusion with Adams to defraud the Howard Insurance Company; for if he was, in virtue of the parol agreement, entitled to the policy, he was not deprived of that right; nor was the company released from its contract to deliver it by reason of intervening destruction of the property insured. A question is, however, made as to the meaning and comprehensiveness of the word vicinity used in the letter of Adams’ appointment as agent; but it seems to us if there was any doubt about, authority of Adams as agent to make contracts for insurance of property in the village of Corydon, it would be removed by the conduct of defendant sanctioning contracts for insuring other property in that place, which appears from evidence in this case was done. — 204 — Although, ordinarily an application for insurance would tend strongly to show the contract to insure was not completed, and that the right of a company to decline making it still existed, yet in this case the evidence is that it was distinctly agreed by Adams, the application was intended simply as description of the property, and would not impair Owen’s right under the previous parol agreement, nor release the-company from its obligation thereby incurred ; and if the application was made by Owen under such circumstances and upon such assurance, we do not see. how that act can be now construed as a waiver of his-right to the policy already acquired by the parol contract, or as a release of the company. It appears, that the store-house of Owen was in a range of' frame buildings, and Adams was, in his letter of instructions, forbidden to insure property so situated; and, therefore, the general manager probably would, if informed of the fact pending negotiations between Adams and Owen, have prohibited consummation of the contract, as he did reject the application when received by him. But it appears Adams was acquainted with the condition and situation of the property at the time he agreed to insure it, and as. the company gave him authority to make the contract of insurance and for delivering the policy, it should suffer for any apparent or real breach of trust by its agent, and not Owen, the insured, who relied and acted upon the faith of the agreement. There is no evidence that Owen had notice of such restriction or limitation of the authority of Adams as agent, or that he acted in bad faith in any respect whatever, and the jury so found. — 205 — It appears that the letter of the general manager rejecting the application was received by Adams before delivery of the policy, but after the property was destroyed. But if defendant was legally bound by agreement of its agent to deliver the policy, and Owen’s right to it had become vested before destruction of the property insured, then Adams did no more in delivering it, March 17th, than a court of equity would have compelled the company to do. Whether Owen was entitled to the policy, and as a consequence the right to recover on it, was a question to be determined by the jury under instructions of the court, which appear to us to fully and accurately cover every issue; and as there is scarcely any room for controversy about any material fact in the •case, the verdict of the jury in favor of plaintiff was inevitable. •Judgment affirmed.