Georgia Home Insurance v. Bennett

SMITH, J., (after stating tbe facts). (1-2) Tbe requirements of tbe policy in regard to sole and unconditional ownership and change of ownership are, of course, valid and binding and are warranties, the breach of which would cancel tbe policy. But, inasmuch as they were inserted in tbe policy for tbe benefit of tbe company, they could be waived by tbe company, and will be held to have been waived if tbe agent who issued the policy bad knowledge at tbe time tbat tbe insured’s interest, which, of course, must be an insurable one — was not sole and unconditional. Westchester Fire Ins. Co. v. Smith, 128 Ark. 92. But, if tbe testimony of Bennett and bis son is credited, Bennett was the owner of tbe equitable title when be caused payments to be made on tbe purchase price in a sum sufficient to entitle him to a deed pursuant to tbe agreement with bis son tbat such should be tbe effect of these payments. Tbe onlypersons who could know whether such an agreement bad been made were tbe father and tbe son, and they both so testified. We think no prejudicial error was committed in permitting Bennett to testify as to bis recollection in regard to tbe deeds read to him by bis wife. Tbe testimony is tbat the deeds were lost in tbe fire and could not be produced, and if they were ever executed at all their execution occurred prior to tbe fire when no purpose would have been -served thereby except to effectuate tbe agreement tbat tbe father should have tbe sole ownership. The -son testified to tbe execution of these deeds by himself and bis sister, and if they were executed they were intended to become effective, and did become effective, as soon as tbe bank’s deed was executed. Under the instructions given no recovery could have been had unless the jury found that these two quitclaim deeds were executed. The simultaneous passing of the title from the bank to Bennett and his son and daughter and from the son and daughter to Bennett did not change the character of Bennett’s title from a sole and unconditional one. The quitclaim deeds were transmitted to Bennett and took effect upon the execution of the bank’s deed and the deed from the bank became effective on its delivery, so that the title of the son and daughter passed from them to their father at the instant it vested in them under the deed from the bank. We think under the circumstances stated that the testimony of T. J. Bennett in regard to the deeds and their loss was not incompetent. But there can be no question as to the competency of the testimony of IT. G. Bennett as to the execution of the deeds and their delivery by mailing them to T. J. Bennett, and, as has been stated, the verdict of the jury shows that this testimony was credited by them. Complaint is made of the refusal of the court to give an instruction numbered 4, which dealt with the breach of the condition of the policy in regard to sole ownership. But the instruction concluded with the following statement, “or if the interest of the insured in the property be not truly stated therein, then you will find f or the defendant.” This instruction was properly refused because it ignores the effect of the agent’s knowledge in regard to the title and is in conflict with other instructions which presented the view that an insurable interest would support a recovery if the nature of that interest was known to the agent at the time he issued the policy. An instruction numbered 3 was given at the request of the company, but it was modified by the court by inserting the phrase, “including the authority to cancel policies,” and exceptions were duly saved to this modification. As modified, the instruction read as follows: “You. are instructed that, under the terms of the policy sued on herein, the defendant insurance company had the right to cancel the policy at any time by giving to the insured, plaintiff, five days’ notice of such cancellation; you are further instructed that if the plaintiff had an arrangement or an agreement with the United Fire Insurance Agency or with Mr. Goodloe by which either was to keep the property of plaintiff insured and giving said agency or Mr. Goodloe the power to select the companies by which said property was to be insured, and to attend to all matters pertaining to his insurance, including the authority to cancel policies, then you will find that plaintiff constituted the said insurance agency or Mr. Goodloe his agent and that notice from the defendant, insurance company, to the said agency or Mr. Goodloe of the cancellation of the said policy was notice to the plaintiff, and if you further find that defendant company notified the said insurance agency or Mr. Goodloe to cancel this policy sued on, and, in compliance with that notice, the said insurance agency or Mr. Goodloe did, acting for plaintiff, deliver said policy and cancel same, then you will find for the defendant.” (3) It is apparent that the purpose of this instruction was to present the view that Goodloe could be the agent of both the insured and the insurer and that notice to him would be notice to Bennett of any fact included within the scope of the agency. We have held that the insurance agent may act as the agent of the insured in waiving notice of cancellation where a new policy was substituted for the one canceled, authority for that purpose having been conferred by the insured. Allemania Fire Ins. Co. v. Zweng, 127 Ark. 141. And there was testimony in this ease to warrant the submission of the question to the jury whether Goodloe was not the agent of Bennett for the purpose of receiving the five days’ notice of intention to cancel the policy. But the testimony is not so undisputed that the jury must necessarily have found that Goodloe was the agent of Bennett for all purposes. There was testimony from which the jury might have found that Goodloe had authority to issue the policy only after receiving directions from Bennett so to do, and that, if any agency existed as between Bennett and Goodloe, the agency was' special and not so general as to constitute him an agent for the purpose of both giving and receiving notice of the cancellation. Here a conflict of interests arose as between the insurer and the insured. It became to the interest of the insurer to order the cancellation of the policy, and it ordered that action taken. It was to the interest of the insured, that the policy be continued in force. In the case of a conflict of this character Goodloe would be the agent of the principal in whose behalf or for whose advantage he acted unless, indeed, a general agency existed sufficiently broad in its scope to authorize him to act even where the interests of his principals conflicted. It was not improper, therefore, for the court to submit to the jury the question whether Goodloe’s agency for Bennett, if one existed, was sufficiently broad to include within its apparent scope the right to accept the notice which he himself gave of the cancellation of the policy. The principle that one can not serve two masters whose interests are antagonistic applies unless the authority so to do is given expressly or by necessary implication: otherwise, where the interests are conflicting, the agent acts only for the principal whose interests he promotes or in whose behalf he acts; and it is not true as a matter of law that Goodloe’s authority to keep the property insured, of itself, constituted him Bennett’s agent to cancel the insurance and leave the property uninsured without notifying his principal that he had done so. and it was not, therefore, prejudicial or improper to submit to the jury the question of the extent of Goodloe’s agency in this respect. Johnson v. North British & Mercantile Ins. Co., 66 Ohio. St. 6; Body and another v. Hartford Fire Ins. Co., 23 N. W. 132; Edwards v. Sun Ins. Co., 73 S. W. 886. It is finally insisted that error was committed in refusing to make Goodloe and the local agency represented by bim parties to the suit on the theory that, if the policy was not properly canceled in view of the instructions given to that effect, such gross negligence would render the agency liable over to the company. Such may be the case, but we can not decide that question here, as the necessary parties are not before us. But, if this be true, it does not follow that the judgment against the company must be reversed because that company may call its agent to account for infidelity or negligence. No suit was pending at the time by the company against its agents, but, had there been, no prejudicial error would have been committed by refusing to consolidate that case with this one, as the right to recover in each of the cases depends upon wholly different principles of law. Finding no prejudicial error, the judgment is affirmed.