Alabama Red Cedar Co. v. Tennessee Valley Bank

• Decision Date: 29 November 1917
• Docket Number: 8 Div. 986
• Citation: 200 Ala. 622,76 So. 980
• Parties: ALABAMA RED CEDAR CO. v. TENNESSEE VALLEY BANK.
• Court: Alabama Supreme Court

76 So. 980

200 Ala. 622

ALABAMA RED CEDAR CO. v. TENNESSEE VALLEY BANK.

8 Div. 986

Supreme Court of Alabama

November 29, 1917

Appeal from Circuit Court, Madison County; B.M. Miller, Judge.

Action by the Alabama Red Cedar Company against the Tennessee Valley Bank. From a judgment for defendant, plaintiff appeals. Affirmed.

Cooper & Cooper, of Huntsville, for appellant.

Spragins & Speake, of Huntsville, for appellee.

McCLELLAN J.

The plaintiff, appellant, suffered a loss of its property by fire. Its action is for damages against the appellee; and its claim is set forth in five counts. The jury's verdict was for the defendant. The legal effect of the counts is necessary to be stated. Counts 1 and 2 declared upon a contract of insurance against fire, in and by which the defendant engaged to indemnify and make whole the plaintiff from pecuniary loss so caused. Counts 3, 4, and 5 declare upon the breach of a contract whereby the defendant engaged with the plaintiff, for a consideration of $350, to secure for the plaintiff valid insurance for a period of one year from June 28, 1913, in the sum of $7,000, indemnifying it against loss by fire. The defendant's demurrers were overruled. Since the defendant prevailed below, the sufficiency of the several counts against the grounds of demurrers interposed thereto is not considered. However, in order to avoid possible misunderstanding of conclusions later to be set down, it is proper to note that counts 3, 4, and 5 while declaring for the breach of a contract "to secure" valid fire insurance, in a certain sum, for a certain period, do not lay the breach in the failure or refusal of the defendant "to secure" the insurance but, to a very different effect, avers in counts 4 and 5 that the defendant's fault was in its failure to pay plaintiff the money that represented plaintiff's loss by the destruction of its property by fire, if it had been insured.

To these counts, in addition to a general traverse and a broad denial of the making of the contract declared on, the defendant interposed three special pleas, numbers 3, 4, and 5, under this caption:

"The defendant, for plea and answer to each count of the complaint, says. ***"

There was no demurrer to these pleas. The third plea set up that the defendant, a banking corporation, was without power to make the contract declared on. The fourth plea asserted substantially the same defense. The fifth plea read:

"The plaintiff accepted and received from E.B Shoemaker, who was an insurance agent at Gurley, Ala., and with whom was made the agreement or contract, liability for which is sought to be fastened on this defendant by the complaint, valid insurance for the amount claimed, issued by insurance companies represented by said Shoemaker as agent, and not issued by this defendant or any one by its authority, and the same was so received and accepted by the plaintiff in full compliance with the alleged agreement set up in the complaint."

There was no special replication to any of these pleas. At this point it is well to note that there can be no estoppel to resist a contract beyond the power of the corporation, and no ratification of such a contract. Westinghouse Mach. Co. v. Wilkinson, 79 Ala. 312; Chewacla Lime Works v. Dismukes, 87 Ala. 344, 6 So. 122, 5 L.R.A. 100; A.G.S.R.R. Co. v. Loveman, 196 Ala. 683, 72 So. 311.

The charter of the defendant (a banking corporation), offered in evidence, authorized it "to act as agent for fire insurance companies, associations, or corporations." That clause was the only power or authority the appellee had with respect to insurance. It is clear that this power or authority did not comprehend the capacity to insure property against loss by fire or to indemnify owners of property against loss thereof by fire. Pleas 3 and 4 were addressed to each count of the complaint; and, since counts 1 and 2 declared on a contract of insurance made by the defendant in favor of the plaintiff, these pleas were conclusively established, and,...