177 Ky. 131 | Ky. Ct. App. | 1917
Opinion op the Court by
— Affirming.
The Maryland Casualty Company is engaged .in the insurance business in this state, and on the 8th day of February, 1913, issued a policy of insurance to the Owensboro Warehouse Company, and T. J. Turley Company, of Owensboro, Kentucky, whereby it insured those two concerns against loss or damage to property owned
Appellant, Maryland Casualty Company, had a competitor in the same line of insurance in Owensboro. The warehouse company was about to take insurance with appellant’s competitor, when Mr. Givens, local agent, accompanied by Mr. Smith, the state agent of appellant, approached Flaherty, the president of the warehouse company, and represented to him that the policy which appellant issued in such case was as liberal, broad and inclusive as that of its competitor and that appellant’s policy, which Givens and Smith exhibited to Flaherty, covered and included the risks under consideration. Thereupon Flaherty, who was in a hurry to leave his office, relying upon the statements of Givens and Smith, accepted the contract of insurance of appellant, Maryland .Casualty Company, and paid the premium. Thereafter, an accident occurred in the warehouse whereby the tank of the sprinkler system was demolished and water spread in the basement and injured goods stored therein. The warehouse company thereupon demanded adjustment of the loss under the insurance policy. Appellant, Maryland Casualty Company, denied its liability, claiming its policy did not cover the risk. Quite a volume of correspondence ensued, but without results. Finally the warehouse company insisted on Givens, who had made the representations to its president that the policy did include the risk, should make reparation. Givens thereupon entered into a compromise arrangement with the warehouse company, whereby he settled the loss with it under the policy for $282.00. This was without authority from appellant company. In fact, the casualty company, declined absolutely to consider the matter of payment. Later on the warehouse company discovered that its loss was greater than it had at first estimated, and indeed greater than it had calculated at the time of the settlement with Givens. To recover for this extra loss which had not been discovered at the time of the settlement with Givens, the warehouse company brought an action against the Maryland Casualty Company to recover on the policy of insurance. To this action the casualty company made answer, denying its liability and relying upon several defenses, one of which was that its agent, Givens, had theretofore compromised
Only two questions are presented by this appeal: Did the trial court err in declining' to allow appellant to withdraw its allegation of compromise and settlement made by Givens ? And, if such was error, did it prejudice the substantial rights of appellant?
It is the contention of appellee, Givens, that the allegation of the answer was a ratification of the compromise settlement and of the payment of $282.00, which he made to the warehouse company for and on account of the policy of insurance. It must be conceded that a voluntary payment, such as the one made by Givens, for the benefit of another, gives the payer no right of action against the one for whose benefit the payment was made, unless he subsequently ratifies it.
27 Cyc. 838; Neely, et al., v. Jones, et al., 16 W. Va. 635.
Undoubtedly the plea of appellant that payment was made by its local agent, Givens, for it, and relying upon such payment in bar of the action of the warehouse company, was an adoption and ratification of the payment by Givens.
Having once ratified the compromise its act cannot be undone. If it had réquested Givens to pay the $282.00 before payment was made and Givens, in good faith, had paid said sum, appellant would not thereafter be permitted to withdraw its request to make such payment. So where the payment is made and appellant afterwards adopted and ratified the same, it became as firmly bound to make repayment as in the first instance. It might have withheld its ratification, and had it done so, it would not have been liable to Givens for his voluntary expenditure. ’ But this it did not choose to do. To avoid responsibility to the warehouse company, under its policy of insurance, it set up and relied upon the compromise agreement, and having done so and thereby defeated the claim of the warehouse company, it will not be permitted to receive the benefits and to repudiate its benefactor. It follows, therefore, that the trial court’s refusal to allow appellant to withdraw its plea, while irregular, did not prejudice the substantial rights of appellant, because a withdrawal of the plea would not have worked a withdrawal of the ratification.
The trial court erred in overruling the motion of the casualty company to withdraw its plea. The rule seems
“As a general rule a party should be allowed at any time before the cause is submitted to the jury to withdraw a defense or cause of action which he does not desire longer to insist upon.”
This error, however, was not prejudicial and did not affect the substantial rights of appellant.
Appeal granted and judgment affirmed.