148 A. 869 | Vt. | 1930
There was no delivery of the policy in defendant company before the fire, and the contract was not complete until delivery.Orient Ins. Co. v. N.H. Fire Ins. Co. et al.,
Instructions by plaintiff to general insurance agents to keep property insured does not give them authority to cancel policy already issued. Rose Inn Corp. v. National Union Fire Ins. Co.,
232 N.Y.S. 351; Tacoma Lumber Shingle Co. v. Fireman's FundIns. Co., 151 P. 91; Clark v. Ins. Co.,
The power or instruction to write insurance does not imply the power to cancel. Pauley v. Sun Ins. Office, 90 S.E. 552; Lush v.Am. Cent. Ins. Co., 91 S.E. 1078; Mutual Assurance Society v.Scottish Union et al., 10 A.S.R. 819, and note; Herman v. NiagaraFire Ins. Co.,
Generally an insurance agent represents the insurance company, but an insurance broker represents the insured. A broker procures insurance for the insured in a company that broker does not represent. Rose Inn Corp. v. National Union Fire Ins. Co., supra;Norfolk Tire R. Co. v. Manufacturers' Casualty Ins. Co.
(Conn.),
A person can act as agent for two parties in the same transaction only in case he has no discretion or judgment to exercise for either, and when their employment is not adverse.Empire State Ins. Co. v. American Cent. Ins. Co.,
The general insurance agents were seeking to act for three parties. One company had declined to renew, another wanted to get off the risk, and these facts were not reported to the defendant, although it already had one policy on the risk, and the defendant knew nothing of policy in suit until after the fire. An agent should disclose material facts to his principal, and failure to do so is fraudulent. Leno v. Stewart,
Physical delivery of the policy of defendant company was unnecessary to make it effective, but intention of parties as shown by their conduct or agreement will control as to what constitutes a delivery. Wilson v. German-Am. Fire Ins Co.,
There was no evidence in this case that writing of policy in defendant company was procured by fraud, as defendant was chargeable under the law with full knowledge of all facts known to their agents writing policy at the time it was written. Wilson
v. German-American Ins. Co.,
The defendant as principal is bound by the act of its agents in cancelling one policy and substituting another because it is as agents in that line of business were accustomed to do, and as they had implied authority to do. Fire Ins. Co. v. Sinsabaugh,
By force of the instructions to McAllister Kent by plaintiff, and their having acted upon them, the attending circumstances of substitution of policies during this long period of time, and the fact that they were general fire insurance agents, they were agents for the plaintiff to keep in force this amount of insurance, to select the companies that were to carry the risk, and to accept notice of cancellation or waive it, and when one policy was cancelled to substitute a new policy in another company; 26 C.J. "Fire Insurance," § 168, § 169, notes 93 and 94, and cases there cited; Hamm Realty Co. v. N.H. Fire Ins. Co.,
The five days' notice of cancellation provided for by policy is for the benefit of insured, and may be waived by him, and therefore the beginning of this period need not be shown as defendant contends. 26 C.J. "Fire Insurance," § 168, note 34;Allemania Fire Ins. Co. v. Zweng, supra; The Fed. Ins. Co. ofHartford, Conn. v. Sydeman, supra.
A formal surrender of the policy by insured when notified of insurer's election to cancel is not necessary to give effect to the cancellation. Schwartzchild Sulzburger v. Phoenix Ins. Co.,
115 Fed. 653; Hillcock v. Traders Ins. Co.,
In the writing of policy in defendant company, McAllister
Kent acted for the defendant and were not representing the plaintiff, and occupied no position that made their duties incompatible so far as plaintiff and defendant are concerned, and *390
in such circumstances same person may act as agent for each. TheFed. Ins. Co. of Hartford, Conn. v. Sydeman, supra; The Comm.Union Assurance Corp. v. State, etc.,
The defendant had full knowledge of the facts that its agents knew concerning the transaction in question, and was charged with such knowledge by statute. G.L. 5565 and G.L. 5562 as amended by Acts 1919, No. 152; Mullin v. Ins. Co.,
Without further action regarding the New Hampshire policy, but treating it as legally cancelled, McAllister Kent, on July 14, issued a policy in the defendant company to take its place. The property covered by these policies burned on the early morning of July 18, before the exchange of policies had been made and while the New Hampshire policy was in the plaintiff's office at Northfield and the defendant's policy was in the office of McAllister Kent at Barre. After the fire the agents went to Northfield with the Orient policy and turned it over to the plaintiff. They took in return a lost policy receipt in effect releasing the New Hampshire company from liability, the policy in that company having burned in the fire.
The ultimate question here is which of these policies, the New Hampshire or the Orient, was in force at the time of the fire? It is expressly admitted that the defendant is not liable unless the New Hampshire policy was legally cancelled before the fire. The five-day clause above referred to, during which time the fire occurred, was inserted in the policy to give the insured time to secure other insurance on the property before it was left uncovered; it was for the benefit of the insured, and so it could be waived, either by the insured or its agent. Phoenix Ins. Co.
v. State,
The undisputed evidence tended to show that some years before this fire the plaintiff arranged with McAllister Kent to place and keep in effect fire insurance on this Northfield plant to the amount of $60,000; that by this arrangement the agents were to select the companies and apportion the amount between them; and the jury would be justified in finding that at different times they were obliged to change companies after a policy had been written, anl substituted one policy for another without notice to or consulting with the plaintiff further than to request the return of the policy to be replaced.
The authority conferred by this arrangement and its legal effect are vital factors in the case. In considering and deciding these questions, it must be borne in mind that McAllister Kent were to do more for the plaintiff than to place the insurance; they were to keep it in force.
The defendant says it cannot be held, because (1) its policy was not delivered until after the fire; and (2) that the New Hampshire policy was not lawfully cancelled for lack of notice to and waiver of the five-day clause by the insured.
In support of the first of these propositions, the defendant points to the fact that its policy never left the desk in McAllister Kent's office. That a fire insurance policy must be delivered before it becomes effective may be assumed. Though we find no occasion to consider the question of delivery apart from that of cancellation, we may say in passing that it does not take much to establish a delivery of an insurance policy. Manual delivery is not indispensable. It is a question of intention, largely. If a policy is written under an agreement therefor, and is complete and ready for delivery, so that nothing remains to be done but pass it over to the insured, though it remains in the hands of the insurer's agent, a constructive delivery results, which satisfies the rule. In such a case, the insurance agent is deemed to hold the policy for the insured. Porter v. Mutual LifeIns. Co.,
The most important question in the case is: Was the New Hampshire policy cancelled before the fire? In the first aspect *393 of this question, the answer depends upon what authority was vested in McAllister Kent by the plaintiff.
It is not seriously denied that a dual agency may exist where there is no conflict of interests between the masters; but it is vigorously insisted by the defendant that here are such incompatible and conflicting interests between the plaintiff and defendant that the attempt to make McAllister Kent the agents of the insured in the matter of cancelling the New Hampshire policy and waiving the five-day clause therein was ineffective on grounds of public policy and that the defendant is not bound by it since it knew nothing of it.
That the cases relied upon by the defendant justify its position cannot be denied. But by the weight of authority and the better reasoning, we think, the rule is established that where an insurance agent, representing several companies, is under an agreement with a property owner to keep a risk covered to a certain amount, without specification of companies or amounts for each by the latter, the former has authority to transfer that risk or a part of it from one company to another as occasion may reasonably require, without notice to or consent by the insured. The owner, by constituting him his agent to keep the property insured, thereby empowers him to select the companies to carry the risk, and clothes him with authority to cancel one policy and substitute another therefor.
Phoenix Ins. Co. v. State,
Johnson v. North British M. Ins. Co., 66 Ohio St., 6, 63 N.E. 610, was a case wherein the insured merely arranged with the agent to place the insurance, which was done. Afterwards a company ordered its policy cancelled, and the agent rewrote it in another company. The first policy contained the five-day clause, and the agent's attempt to take it up did not succeed until after the fire which occurred within the five-day period. It was held that no authority on the part of the agent to waive the five-day clause was shown. But after indorsing the doctrine that the insurance agent could act as agent for the insured so long as this involved only consistent duties, the court said: "Indeed, it has been so often held that an insurance agency representing several companies, with authority to act on applications and issue policies, as well as to cancel the same in proper cases, may also act as the agent of the insured in waiving notice of cancellation, and in accomplishing the delivery of a new policy when substituted for the one cancelled, that the proposition may be regarded as settled law."
Waterloo Lumber Co. v. Des Moines Ins. Co., 158 Iowa, 563, 138 N.W. 504, 505, 51 L.R.A. (N.S.) 539, is another case wherein the court held that no authority to waive the five-day clause was shown, but the court said: "The insured could, of course, authorize the agents to act for him in receiving notice of cancellation and in procuring other insurance in case his policy was thereafter cancelled, but the giving of such authority in this case was nowhere shown, nor is it to be fairly implied from the record."
In Dibble v. Northern Assurance Company,
Warren v. Franklin Fire Ins. Co., 161 Iowa, 440, 143 N.W. 554, 555, L.R.A. 1918E, 477, is very much like the case in hand, except that there the authority of the agent to rewrite in case of cancellation was expressly given by the insured. A policy in one company was ordered cancelled and it was rewritten in the defendant. The question was as to which company should stand the loss which came within the time covered by the five-day clause contained in the first policy. The court held that the duties conferred upon the agent were not inconsistent with those owed to his companies, and said: "Not only were his employments not inconsistent with the performance of his duty toward each, but they were in harmony and well adapted to the accomplishment of the design of each, for no act of his essential therefor exacted the concurrence of both parties."
Sterling Fire Ins. Co. v. Comision Reguladora,
Federal Insurance Co. v. Sydeman,
Orkin v. Standard Fire Ins. Co., 99 N.J. Law, 114,
Northern Assurance Co. v. Newman Lumber Co.,
The defendant says that broker cases are not in point, since the broker is the admitted agent of the insured, and does not in any respect represent the insurer. But when the scope of the agency is the question, such cases are to be considered as in point.
By the foregoing authorities, the following propositions, which we now approve, are established:
1. When an insurance agent is employed to write or procure certain insurance, merely, his authority for the insured is exhausted when he has done so, and he has no authority to consent to its cancellation, to waive the five-day rule, or to accept a substitute policy.
2. But where such agent is authorized by the assured, not only to place the insurance, but also to keep the property covered, he has implied authority to do whatever is reasonably necessary to accomplish that object, and he may waive the five-day clause, accept cancellation and substitution — all without notice to or consent by the insured.
Other cases in full accord with the foregoing, are: Ætna Ins.Co. v. Renno,
No particular form of words is required to effect such an arrangement as is herein referred to. What is said between the parties, construed in the light of the attendant circumstances, is to be considered. Ordinarily, the question of authority is one of fact to be determined by the jury. Todd v. German-AmericanIns. Co.,
We hold, then, that the New Hampshire policy was not in force at the time of the fire, and that the Orient policy was. We reach this conclusion without considering the question of ratification of the acts of McAllister Kent by the insured, of which we say nothing more than that there was at least evidence tending to show that Miss Davis had authority to and actually did ratify what they had done. Faulkner v. Manchester Fire Assur. Co.,
The defendant makes some claim that McAllister Kent withheld material facts concerning this matter so that its policy is voidable at its election. Of this, it is enough to say that that question is one for the defendant and its agent to settle between themselves. The plaintiff had nothing to do with it, and the validity of the policy here is not affected by it. MassachusettsLife Ins. Co. v. Eshelman, 30 Oh. St. 647.
The court charged the jury that the burden of proof was on the defendant to show that the duties imposed upon McAllister Kent by the insured and insurer were inconsistent and incompatible. To this the defendant excepted. Since we hold that these duties were not incompatible, and make that holding as matter of law, the submission of the question to the jury at all was a gratuity. The court should have ruled it *398
against the defendant. So the defendant was unharmed by the error, if one was committed. LaMountain's Admx. v. Rutland R.R.Co.,
Affirmed.