E. S. Brownfield & Brother v. Phœnix Insurance Co. of London

Philips, P. <7.-

It is quite clear, from the evidence, .that Early & Booth were general agents for effecting insurance contracts, at Centralia and vicinity, with power to deliver policies and receive the premiums. In such cases third parties dealing with them would not be affected by .any special instructions given, or limitations placed upon their agency, by- the principal, unknown to such third parties at the time. This rule is founded on a sound policy, as it prevents fraud, and promotes confidence in such dealings. Perkins v. Wash Insurance Co., 4 Cow. 645; Lightbody v. North American Insurance Co., 23 Wend. 22; Nicholson v. Golden, 27 Mo. App. — .

If, therefore, on the nineteenth day of May, the plaintiffs entered into, negotiations and completed a contract of insurance with Early & Booth, as agents, without any notice or suggestions calculated to put them on the inquiry, that the written application was to be forwarded to the company for its acceptance, they would .not be affected or bound by the private instructions of *399the defendant to said agents. And if the contract was otherwise completed, by the payment of the premium on that day, or its payment then was waived, the plaintiffs were entitled to have the policy when it was delivered, and they, in the absence of fraud, were under no obligation to inform the agents of the loss by lire before the delivery of the policy. Baldwin v. Chouteau Insurance Co., 56 Mo. 153, and cit.

On the other hand, the converse of this proposition must equally hold good, that, although Early & Booth, as general agents, at Centralia, were clothed with such apparent authority,- yet, if, in respect of property situated as this was, and regarded as especially hazardous, the instructions of the agents required applications to be forwarded for the company’s acceptance, and the plaintiffs were apprised of this fact, or if they were aware, in any manner, at the time they made the application, that it was to be sent, by the agents, to the company for acceptance, there was no contract concluded until the risk was accepted by the company ; and the delivery of the policy, by Early & Booth, would not bind the defendant.

The action being based on the policy of insurance, and not on a contract for insurance, unless the plaintiffs were entitled to demand the policy on the twenty-fifth day of May, on a complete contract theretofore made, there can be no recovery in this action. Whittaker v. Ins. Co., 29 Barb. 312; Ins. Co. v. Walser, 22 Ind. 73; Lingerfelter v. Ins. Co., 19 Mo. App. 264.

■ The defendant’s evidence was quite explicit to the effect that, as the efforts to insure this property in other companies had failed because the risk was deemed extra hazardous, defendant’s agents informed plaintiffs that they would have to make written application to be forwarded to the company for its acceptance. And, as the plaintiffs’ own evidence showed that they had not, hitherto, been required to make such application, the fact that it was required in this instance is a strong circum*400stance confirmatory of the agents’ testimony thiat they told tlie plaintiffs that tliey “ would send in the application for acceptance or rejection by the company, and, if accepted, they would issue a policy and send to them.”' The application in writing was made and signed by plaintiffs, and forwarded to the defendant. When the-fire occurred the same had not been accepted, but the company was awaiting further information.

If the defendant’s evidence is to be credited by a jury, the policy was improperly delivered by the agents, and the plaintiffs cannot recover. The defendant was clearly entitled to have this hypothesis submitted to the-jury for a direct response.

The chief objection to the series of instructions given by the court is, that they did not present the whole case under all the evidence. They were too-partial to the plaintiffs’ theory, predicated alone upon their evidence. Without approving the instruction in the form as presented by the defendant, when the court undertook, as it did, to reform or reconstruct the instruction, it should have so framed it as to present the case to the jury on all the evidence, and not on a partial view of it. The instruction nearest approaching the-presentation of the case, based upon defendant’s evidence, is the following: •

“The court instructs the jury that if plaintiffs’ property was destroyed by fire before plaintiffs’ application was accepted, then the verdict must be for the defendant, and the jury are instructed that there must have been some affirmative acceptance of the insurance asked for to have bound the defendant; and, if there was further information asked for as to said property, and such information was not received by defendant before the fire, then there was no acceptance, and the verdict must be for defendant, unless the jury believe from the evidence that the agents of defendant, Early & Booth, had authority to malee contracts of insurance, *401and issioe policies, without first obtaining from, defendant the acceptance of applications.”

The portion in italics was added by the court. By this qualification it is apparent that the court, in effect, withdrew from the consideration of the jury the question of fact, as to whether the plaintiffs made the application, as testified by the agents, to be forwarded to the company for approval. Although the jury might have been disposed, from all the facts and circumstances in evidence, to believe that the application was made for the purpose stated by the witnesses for the defence, and that plaintiffs knew, or had reason to believe, that it was to be forwarded, subject,to defendant’s acceptance or rejection, yet this instruction, in effect, told the jury that this would not avail the defendant as a defence, if they believed, aside from this special transaction, that Early & Booth “had authority to make contracts of insurance, and issue policies, without first obtaining from defendant the acceptance of applications.”

It ignores the well settled rule of law, that a presumption must give way when the truth appears. Although Early & Booth had the apparent authority to make contracts of insurance, and issue policies in evidence thereof ; yet, if in this particular transaction they were advised of the necessity of making the application, and that it was to be forwarded for defendant’s acceptance, they had no right to rely longer on the general apparent authority. Taking a witness with them, and obtaining the policy on the morning of the twenty-fifth, after the fire, in the manner they did, gives strong color to the correctness of the defendant’s evidence. At all events this was a question of fact for the jury, and the defendant was entitled to have this issue passed upon by the jury! And the court erred in' this respect.

I. As the case is to be remanded, we will suggest that so much of the second instruction, given on behalf of plaintiffs, as authorized the jury to find a waiver of *402'payment of premium on the nineteenth day of May, from the fact “that said agents would themselves take suffiU ■cient money from plaintiffs’ deposit in bank to pay the premium,” be omitted, unless the evidence, on a further trial, be different from this record. There was nothing in what transpired between the parties, respecting the payment of the premium, to 'warrant a jury in finding that plaintiffs authorized Early & Booth to transfer the amount of such premium from plaintiffs’ bank account. Ordinarily, this would require a check from the depositor ; and there is nothing in evidence to justify a verdict predicated of such an extraordinary method as the instruction implied. Instructions must be predicated of She evidence. The plaintiffs themselves evidently contemplated no such liberty with their bank account. On the twenty-fifth of May, when, they went to pay the premium they inquired if they had sufficient money in bank for such purpose, and drew a check therefor.

II. Defendant assigns for error the action of the trial court in rejecting certain correspondence between the defendant and Early & Booth. We perceive no objection to the action of the court in this respect. Such correspondence, and the like, as occurred between the parties prior to the notice of the loss by the defendant would be competent evidence ; but any correspondence or statements by them after they had such notice would be clearly inadmissible; otherwise they could make evidence to suit the emergency.

The other judges concurring, the judgment of the circuit court is reversed, and the cause is remanded, with directions to proceed in conformity with this «opinion.