Abrahamson v. Hartford Fire Insurance

Mr. Justice Fitch delivered the opinion of the court. The defendant in error sued the plaintiff in error in the Municipal Court to recover the amount of the loss by fire of a motor delivery car, which had been insured by plaintiff in error. The defense set up by the affidavit of merits was, that contrary to the terms and conditions of the insurance policy, the plaintiff’s motor car was incumbered by a chattel mortgage at the time the policy was issued, of which fact the defendant was not informed; to which the plaintiff replied that the defendant’s agent was informed of the existence of the chattel mortgage and thereby defendant waived the provision of the policy which makes the policy void if the property insured be mortgaged. Upon a trial before a jury, plaintiff recovered a verdict of $642.50, and after a remittitur of $142.50 was entered, judgment was rendered against defendant for $500. This writ of error is sued out to reverse that judgment. There is no dispute as to the amount of the judgment, but the parties renew in this court the same contentions, substantially, they made in the trial court. The insurance policy provides that the policy shall be void “if the subject of this insurance be or become encumbered by any lien or mortgage;” that “no person shall be deemed an agent of this Company unless such person is authorized in writing as such agent by this Company;” and that “no officer, agent or other representative of this Company, shall have power to waive any provision or condition of this policy, unless such waiver, if any, shall be written upon or attached hereto. ’ ' It appears from the evidence that when plaintiff bought his delivery car he paid part of the purchase price in cash and gave a chattel mortgage upon the car for the remainder; that about a week later, he met one H. A. Jacobs, a clerk or employe of N. Jacobs, who was a special agent for the Royal Insurance Company, and requested said H. A. Jacobs to insure the car; that Jacobs asked plaintiff how much the car was worth, to which plaintiff replied the car had cost him around $1,500; that Jacobs then asked if the car was wholly paid for; that plaintiff replied that he had paid down about half and that the balance was secured by chattel mortgage notes; that knowing that the Royal Insurance Company did not write automobile insurance but the defendant company did insure automobiles, Jacobs called up the office of defendant by telephone and asked the man in charge of the office for “a rate on that automobile,” which was given him; that the next day, plaintiff again called at Jacobs’ place of business; that Jacobs told him what the rate was and plaintiff told Jacobs “to insure the car,” whereupon, Jacobs “telephoned to the Hartford for a policy;” that a policy was issued by defendant and delivered to Jacobs, who, in turn, delivered it' to the plaintiff, who paid the premium to Jacobs. There is no claim that defendant did not receive the premium so paid. Jacobs testified that although he was an insurance solicitor, yet “with the plaintiff in this case the business was unsolicited. ’ ’ The law is well settled in this state that notice to an agent of an insurance company, at the time of the application for insurance, of facts material to the risk, is notice to the insurer, and will prevent it from insisting upon a forfeiture for causes within the knowledge of the agent (Phenix Ins. Co. v. Hart, 149 Ill. 513, 522), notwithstanding there be conditions or stipulations to the contrary in the insurance policy. Union Ins. Co. v. Chipp, 93 Ill. 96; Commercial Ins. Co. v. Ives, 56 Ill. 402, 407. If an insurance company issues a policy of insurance and places the same in the hands of a street broker for delivery, and the latter delivers the same to the insured, who pays the premium therefor to the broker in good faith, under the belief that such broker was the agent of the company, the company is estopped from thereafter claiming that the policy is not a valid and binding contract of insurance. Lycoming Fire Ins. Co. v. Ward, 90 Ill. 545, 549; Commercial Ins. Co. v. Ives, supra; Union Ins. Co. v. Chipp, supra. Whether H. A. Jacobs was an agent for the defendant, or for the insured, was a question of fact. In Lumberman’s Mutual Ins. Co. v. Bell, 166 Ill. 400, an instruction was given by the trial court to the effect that whether certain brokers were the agents of an insurance company “in the transaction of obtaining a policy is a question of fact, to be determined from all the evidence bearing on that subject, and not merely from the statement in the policy to the effect that the brokers were the agents of the assured. ’ ’ This instruction was approved by the Supreme Court as a correct statement of the law applicable to cases like the present case. “The question as to whose agents they really were is open to inquiry, and may be shown by parol evidence, notwithstanding the statement in the policy. Newark Fire Ins. Co. v. Sammons, 110 Ill. 166; Lycoming Fire Ins. Co. v. Ward, 90 Ill. 545; Union Ins. Co. v. Chipp, 93 Ill. 96.” In this case, the trial court instructed the jury in accordance with the principles above stated, and thereby properly left to the jury the question whether Jacobs, at the time the insurance policy was written, was acting as agent for the plaintiff or for the defendant, and also properly left to the jury the question whether the company, through Jacobs as its agent, had notice, ..at that time, of the existence of the chattel mortgage; and after an examination of the evidence in the record, we are not able to say that the verdict is manifestly contrary to the evidence. Two minor errors, in relation to the admission of certain evidence, are also claimed, but we think neither of them is well assigned. The judgment of the Municipal Court will be affirmed. Affirmed.