Aetna Ins. Co. v. Lester

• Decision Date: 14 May 1934
• Docket Number: 31229
• Court: Mississippi Supreme Court
• Parties: AETNA INS. CO. v. LESTER et al

154 So. 706

170 Miss. 353

AETNA INS. CO. v. LESTER et al

No. 31229

Supreme Court of Mississippi

May 14, 1934

Division B

Suggestion Of Error Overruled June 11, 1934.

APPEAL from circuit court of Panola county HON. JNO. M. KUYKENDALL Judge.

Action by J. P. Lester and another against the AEtna Insurance Company. Judgment for plaintiffs, and defendant appeals. Affirmed.

Affirmed.

Watkins & Eager, of Jackson, for appellant.

Under the undisputed proof the dwelling house had been vacant for many months preceding the fire and thereby under the provisions of the policy the contract was rendered null and void.

Home Insurance Co. v. Hardin, 162 Miss. 254, 258, 139 So. 603; Home Insurance Co. v. Scales, 71 Miss. 975, 15 So. 134, 42 A. S. R. 512; 3 Cooley's Briefs on Insurance (2 Ed.), page 2595; 14 R. C. L. 1103; 26 C. J. 213, 214; Lester et al. v. Miss. Home Ins. Co., 19 So. 99; Assurance Co. v. McPike, 62 Miss. 640.

Hill Jarratt was the sole agent of the AEtna Insurance Company, and the AEtna Insurance Company had never written any previous policy on the Lester dwelling, and M. E. Jarratt was never the agent of the AEtna Insurance Company.

Palatine Insurance Co. v. Smith McKinnon & Son, 115 Miss. 324, 75 So. 564.

Under the express provisions of the mortgage clause the policy contract was rendered void and unenforcible as to the mortgagee upon the mortgagee failing to notify the company of any change of ownership or occupancy or increase of hazard which should come to its knowledge, and unless said mortgagee after such notice, and on demand, should pay the additional premium for such increased hazard.

Fidelity Phenix Fire Ins. Co. v. Garrison, 6 P.2d 47; Bacot v. Phoenix Ins. Co., 96 Miss. 223, 50 So. 729; Metzger v. Southern Bank, 98 Miss. 108, 117, 54 So. 241.

It is elementary that the assured and, in this case, also the mortgagee are bound by the terms and provisions of the policy contract and cannot be heard to say that they had not read the policy and did not know of the provisions rendering the policy void in case of vacancy for more than ten days.

Jackson Steam Laundry v. AEtna Casualty & Surety Co., 156 Miss. 663, 126 So. 478; Brown v. Powell, 130 Miss. 496, 94 So. 457; Continental Casualty Co. v. Hall, 118 Miss. 871, 80 So. 335; Home Mutual Fire v. Pittman, 111 Miss. 425, 71 So. 739; Mixon v. Sovereign Camp, W. O. W., 155 Miss. 848, 125 So. 113.

The mere knowledge of the agent that the property is vacant is not sufficient to justify a waiver on the part of the company.

Home Insurance Co. v. Scales, 71 Miss. 795; Insurance Company v. Pitts, 88 Miss. 587, 41 So. 5.

Hindman Doxey, of Holly Springs, for appellees.

Where there is substantial evidence tending to establish plaintiff's case, verdict may not be directed for defendant.

Haynes-Walker Lumber Co. v. Hankins, 141 Miss. 55, 105 So. 858; Taylor v. De Soto Lumber Co., 137 Miss. 829, 102 So. 260, 103 So. 82; Porter v. Nesmith, 124 Miss. 517, 87 So. 5.

Where the evidence is conflicting on an issue, it is proper to present it to the jury.

Sunflower Bank v. Pitts, 108 Miss. 380, 66 So. 811; Alabama Great Southern R. Co. v. Daniell, 108 Miss. 358, 66 So. 730; Hemming v. Rawlings, 144 Miss. 643, 110 So. 118.

The purpose of the enactment of Section 5196, Code of 1930, and similar sections was to prevent insurance companies from doing business in the state in such manner as to deceive or injure the public and to reap the profits, while escaping liability through the expedient of limiting the authority of the agent. Wherever a company appoints an agent for a particular purpose, that agent, acting for the company, is to be treated as though the company itself were acting, as this court has often decided.

The overwhelming proof shows that the vacancy provisions were abrogated or rendered non-effective because of the definite knowledge, acts, promises and assurances of the Insurance Company's agent.

14 R. C. L. 1166, 1159, 1171, 1172, 1182, 1187, 1158 and 1167.

If the agent is of the type that his knowledge is to be imputed to the insurer, the knowledge of his clerk or subagent acquired in his employment during, or subsequently to, the issuance of the policy is likewise attributable to the insurer.

26 C. J., pages 301, 322, 209; Maxwell v. New York Mutual Fire Ins. Co., 114 Maine 170, 26 C. J. 210; Dodge, v. Grain Shippers Ins. Assn., 157 N.W. 955; Miss. Fire Assn. v. Stein, 88 Miss. 499, 41 So. 66; Franklin Fire Ins. Co. v. Franks, 145 Miss. 494, 111 So. 135; Sutherland v. Federal Ins. Co., 97 Miss. 345, 52 So. 689; Big Creek Drug Co. v. Stuyvesant Ins. Co., 115 Miss. 333, 76 So. 768; Big Creek Drug Co. v. Stuyvesant Ins. Co., 76 So. 548; Stewart v. Coleman, 120 Miss. 28, 81 So. 653; Agricultural Ins. Co. v. Anderson, 120 Miss. 278, 82 So. 146.

The condition (vacancy clause) is intended to protect the company against an increase of risk by reason of the vacancy of the house which was occupied at the time the insurance was effected and has no application to a risk taken on an unoccupied dwelling house.

Bennett v. Agricultural Ins. Co., 160 New York 243; Miss. Home Ins. Co. v. Stephens, 93 Miss. 439, 46 So. 245; Hartford Ins. Co. v. Lumber Co., 116 Miss. 823.

A stipulation in a contract executed by a corporation to the effect that its terms could not be waived by any agent or officer, is not aided by the claim that the power to waive was confined to the corporation itself, since a corporation can act only by agents and officers.

London Guarantee & Accident Co. v. Mississippi Central R. R. Co., 97 Miss. 165; David J. Sutherland v. Federal Ins. Co., 97 Miss. 345; Big Creek Drug Co. v. Stuyvesant Ins. Co., 115 Miss. 333; Germania Life Ins. Co. v. Bouldin, 100 Miss. 660, 56 So. 609; Fraternal Aid Union v. Whitehead, 125 Miss. 153, 87 So. 453.

Generally agents of insurance companies authorized to contract for risks, receive or collect premiums and deliver policies may confer upon a clerk or subordinate authority to execute the same powers, the service not being of a personal nature.

Home Ins. Co. v. Strange, 123 N.E. 127; Richmond v. Niagara F. Ins. Co., 79 N.Y. 230; Springfield F. & M. Ins. Co. v. Price, 132 Ga. 687, 692 S.E. 1074; Teutonic Ins. Co. v. Howell, 54 S.W. 852, 21 Ky. L. 1245; Fire & Marine Ins. Co. v. Loving, 163 Miss. 114, 140 So. 727; Lamar Life Ins. Co. v. Kemp, 154 Miss 890, 124 So. 62.

An insurance company is bound by knowledge of, or notice to, its agent within general scope of his authority, notwithstanding a contrary provision in application or policy.

Hartford Fire Ins. Co. v. Clark et al., 154, Miss. 418, 122 So. 551; Big Creek Drug Co. v. Insurance Company, 115 Miss. 333, 75 So. 768.

OPINION

Ethridge, P. J.

An August 10, 1932, the AEtna Insurance Company issued a fire insurance policy upon a certain house, described in the policy, as being occupied by a tenant, in the town of Batesville, in the amount of two thousand dollars, with a mortgage clause payable to the Bank of Batesville as its interest might appear. This policy was countersigned by Panola Insurance Agency, by Hill Jarratt, manager and agent, and contained what is known as a vacancy clause. The house was burned in January, 1933, and was a total loss.

At the time this policy was issued, the house was vacant and had been so for several months. The insurance policy was delivered, according to the testimony of the plaintiff which was accepted by the jury, by M. E. Jarratt, the father of Hill Jarratt, who had been engaged for many years in the insurance business, and had written the insurance upon the property involved in this case in former years. M. E. Jarratt became financially embarrassed and was placed in bankruptcy, and his son, Hill Jarratt, took over the business of writing new policies and renewing those theretofore written by M. E. Jarratt.

It was shown in the proof that M. E. Jarratt was still engaged in writing and delivering policies, and was also engaged in writing life insurance policies, using an office in the Panola Insurance Agency which was claimed to be owned by Hill Jarratt as sole owner.

M. E. Jarratt had agreed to keep the property involved in this case insured during the period of vacancy and knew of the vacancy at the time of the delivery of the policy.

Hill Jarratt testified that he was the sole agent of the AEtna Insurance Company at Batesville, and that he wrote and signed all policies, and that he was under the impression that he mailed the policy in the case at bar to the bank, and sent a statement of same to J. P. Lester who lived at Holly Springs. Dr. Lester, the brother of J. P. Lester, was in charge of the property at Batesville, looking after the collection of rents and the renting of said property, and, when the property in question became vacant, he notified M. E. Jarratt of such vacancy, and was promised by him that the insurance would be kept up on the property, and that he had never failed to keep property insured where policies were written by him.

At the time M. E. Jarratt delivered this policy to the bank, he was asked if the policy was all right, and he assured the officers of the bank that it was, and that if the house burned they would receive the insurance money; that he had never had a policy contested and never failed to keep property insured; and that every policy he had signed was all right. Hill Jarratt testified that he did not know the property was unoccupied at the time the policy was written, and that he got the information as to tenancy from the old policy and from the rate book when he wrote the policy involved, and there were no representations made to him by the insured or the officers of the bank that the property was unoccupied.

At the close of the plaintiff's testimony, ...