194 Mich. 589 | Mich. | 1917
Plaintiff recovered a judgment of $500 against defendant on a fire insurance policy by direction of the court, and defendant assigns error.
The conceded facts appear to be that in August,
“Q. Are all buildings in which fires are built equipped with safe brick or cement chimneys, at least 4 inches in thickness?
“A. Yes.”
—and upon section 9 of the policy, which prohibited the use of chimneys unless constructed of brick or cement. The defendant rested its case upon these propositions and the further one that plaintiff should have settled his differences with the company by arbitration instead of a suit at law, in compliance with section 5 of the by-laws.
The use of the Dutch chimney in the summer months after the policy was taken out appears to have been in violation of section 9 of the by-laws, and the repre
But it is argued that Sheldon was merely a soliciting agent, and had no authority to issue policies, and therefore his knowledge was not the knowledge of the company. The record shows that Sheldon was appointed the local agent of the company, with power to represent it in taking applications for insurance; that he did take them, and received the premium and receipted therefor. Under such authority the agent is generally held to be the agent of the insurer and not of the assured. 19 Cyc. p. 826, and cases. Steele v. Insurance Co., supra.
The further point is made that this rule does not apply to mutual insurance companies. The case of Russell v. Insurance Co., 80 Mich. 407 (45 N. W. 356), disposes of this argument adversely to defendant’s contention, where it is said:
“It seems to be settled by the weight of authority that there is no distinction between mutual and stock companies as to their responsibility for the acts of*593 their agents in taking applications for insurance; and, upon principle, there is no good reason why there should be any. The assured does not become a member of the mutual company until he receives his policy, and there is generally no acquaintance upon his part with the charter or.by-laws of the corporation when he makes his application. * * * Therefore, if there is no limitation of the agent’s authority brought home to the assured, the agent receiving the application must be considered the agent of the insurer, and not of the assured, and his acts will be held the acts, of the company, and his knowledge the knowledge of the company.”
There being no contradiction of plaintiff’s testimony in regard to what took place at the time the application was made, we must conclude that Sheldon, the agent, was fully informed of the misrepresentation in the application, and that his knowledge was the knowledge of the company, and that the company is now estopped from avoiding payment on the ground of fraud. Russell v. Insurance Co., supra; Gristock v. Insurance Co., 84 Mich. 161 (47 N. W. 549); Power v. Insurance Co., supra; Simpson v. Insurance Co., 184 Mich. 547 (151 N. W. 610); Simmons v. Insurance Co., 187 Mich. 551 (153 N. W. 696).
The cases counsel rely upon to support their contention are cases where misstatements were made and relied upon by the insurer as the facts with no knowledge that they were misstatements. This distinction will be found pointed out in Simpson v. Insurance Co., supra.
2. Upon the following by-law defendant bases its proposition that plaintiff should have resorted to arbitration for the purpose of settling his difficulties with the company:
“In case of disagreement with the loser of property .insured, regarding any matter pertaining to said loss or damage or the payment thereof, said matter in dif*594 ference shall be determined by arbitration; and in case of such disagreement the secretary shall notify said loser of property and give him an opportunity to appear before the arbitration committee within fifteen days and present such evidence as he may have to establish the justness and validity of such claim, and said committee shall hear, try and decide upon all matters pertaining to said claim or the payment thereof, and such decision shall be final and binding upon said claimant and the company, and no suit in law or equity shall be commenced or maintained by any such loser or beneficiary to determine such matter in difference.”
After the fire the officers of the company were notified, and they made an investigation and wrote plaintiff a letter denying all liability and refusing to pay the loss. This by-law, fairly construed, places the duty upon the defendant to initiate the arbitration proceedings by giving claimant the notice required therein. The company having failed to give this notice, the by-law cannot now be used to defeat this proceeding.
At the conclusion of the proofs the trial court was requested by both parties to dispose of the case as a question of law. He did so by holding that Act No. 128, Pub. Acts 1911 (2 Comp. Laws 1915, § 9481), applied. By reason of the view which we have taken of the case it will be unnecessary to consider that question, as the same result is reached. The trial court reached the right conclusion, and the judgment will be affirmed.