Alabama State Mut. Assur. Co. v. Long Clothing & Shoe Co.

• Court: Alabama Supreme Court
• Writing for the Court: SHARPE, J.
• Citation: Alabama State Mut. Assur. Co. v. Long Clothing & Shoe Co., 123 Ala. 667, 26 So. 655 (Ala. 1899)
• Decision Date: 30 June 1899
• Parties: ALABAMA STATE MUT. ASSUR. CO. v. LONG CLOTHING & SHOE CO.

26 So. 655

123 Ala. 667

ALABAMA STATE MUT. ASSUR. CO. v. LONG CLOTHING & SHOE CO.

Supreme Court of Alabama

June 30, 1899

Appeal from city court of Talladega; John W. Bishop, Judge.

Action by the Long Clothing & Shoe Company against the Alabama State Mutual Assurance Company on an insurance policy. From a judgment in favor of plaintiff, defendant appeals. Reversed.

The defendant pleaded the general issue, and by the second special plea it set up the violation of a contract of insurance, in that, contrary to the stipulations of said contract, the plaintiff obtained additional insurance upon the goods alleged to have been damaged, without giving notice to, and obtaining the written consent of, the defendant. To this second special plea the plaintiff filed nine replications. Demurrers were sustained to the sixth and eighth, and it is therefore unnecessary to set them out at length. The first replication averred that the allegations contained in said second plea were not true. The remaining replications were as follows: "Second. Before such loss occurred, notice of such additional insurance was given to the defendant, and no objection was made thereto by said defendant prior to such loss; and the defendant had a reasonable time after such notice, and before such loss within which to make such objection. Third. Before such loss notice of such additional insurance was given the defendant by the plaintiff, and the said defendant made no objection or dissent thereto, and did not cancel the said policy, and did not return the unearned premium thereof; and the defendant had a reasonable time in which to make such objection and dissent, to cancel said policy, and return said unearned premium, after such notice was given, and before such loss occurred. Fourth. Before such loss occurred, the defendant with notice of such additional insurance, waived the grounds set up in its second plea, by failing to make objection within a reasonable time to such additional insurance; and the defendant had a reasonable time in which to make such objection after such notice had, and before such loss occurred. Fifth. Before such loss occurred, the defendant with notice of such additional insurance, waived the grounds set up in its second plea, by failing to make objection to or to dissent from, such additional insurance, and by failing to cancel said policy and to repay to plaintiff the unearned premium thereon; and the defendant had reasonable time within which to make such objection and dissent, cancellation and repayment, after notice had, and before such loss occurred." "Seventh. Said additional insurance was effected by M. G. McCargo, then and there the agent of the defendant; and the defendant did not express disapproval as to such additional insurance, and made no objection thereto." "Ninth. Heretofore, on, to wit, the 12th day of May, 1897, one M. G. McCargo, with an office in the city of Talladega, Talladega county, Alabama, was engaged in business as a general insurance agent. The said defendant knowing the said McCargo to be engaged in such business, selected him as its agent in the said city of Talladega to transact business for it, and the said McCargo from a time anterior to the said 12th day of May, 1897, until after, to wit, the 28th day of September, 1897, continuously, continued to act, and was held out to the general public by the said defendant, as its agent in the said city of Talladega; and as such agent the said McCargo received from the plaintiff a premium of, to wit, $10 (ten dollars), and delivered to it the policy sued on in this case. Afterwards, on, to wit, the 2d day of July, 1897, the plaintiff applied to the said McCargo, doing such general insurance business, for additional insurance, and the said McCargo then and there agreed with the plaintiff to effect for it such additional insurance, whereupon, said McCargo, who still continued as aforesaid to be the agent of the said defendant, and who was also at the same time the agent of, to wit, the Southern Mutual Fire Insurance Company of Alabama, as such agent agreed and contracted with the plaintiff for the additional insurance in the sum of, to wit, one thousand dollars ($1,000), and thereupon issued to the plaintiff a policy on the said property in the said Southern Mutual Fire Insurance Company of Alabama for the said additional amount of one thousand dollars; and in the said policy to the said last-named company he, said McCargo, inserted a clause in words and figures as follows, to wit: '$1,000 additional insurance permitted, warranted to be concurrent herewith.' And by the same he intended to refer and did refer to the policy of insurance sued on in this case, which said additional insurance policy so issued is the additional insurance complained of in said defendant's second plea. Afterwards, on, to wit, the 20th day of September, 1897, the plaintiff suffered the loss sued on in this case, and after the said loss the said defendant, with notice of the said additional insurance, and with notice that the insurer thereof was on the point of sending, or had sent, an adjuster or inspector to the place of loss, to wit, in the city of Talladega, sent its adjuster, to wit, A. H. Borders, to visit and inspect the said loss contemporaneously with the inspection of the said loss by the adjuster of the said Southern Mutual Fire Insurance Company of Alabama; and the said defendant, by and through its said inspector, after the said loss and damage, on, to wit, the 21st day of September, 1897, visited the said loss and inspected the same as aforesaid. And plaintiff further avers that the said defendant continued to retain, and still retains, the said premium for the said policy sued on in this case." To the second replication the defendant demurred upon the following grounds: "(1) For that said replication is no answer to the plea. (2) For that said replication does not traverse any material allegation in said plea, nor confess and avoid the same. (3) For that said replication admits the forfeiture averred in the plea, and shows no waiver thereof by the defendant. (4) For that the forfeiture averred in the plea is confessed by the replication, and the defendant was not required by any stipulations contained in the conditions of the policy set forth in the plea or the replications to make any objections to the forfeiture, and the failure to make such objection is not a waiver thereof. (5) The defendant was not required to make any objection to the additional insurance after notice thereof, and the failure so to do is not a waiver of the forfeiture averred in the plea and admitted in the replication." To the third replication the defendant demurred upon the grounds of demurrer interposed to the second replication, and upon the following ground: "(6) For that under the facts alleged in said replication the defendant was under no obligation to return the unearned premium of said policy of insurance, and the failure to do so is not a waiver of the forfeiture of the policy." To the fourth and fifth replications the defendant demurred upon the same grounds as were interposed to the third replication. To the seventh replication the defendant demurred upon the grounds interposed to the third replication, and upon the following additional grounds: "(7) The facts averred in said seventh replication to second plea show that, in the matter of the issuing the additional policy of insurance therein mentioned, said M. G. McCargo was acting, not as the agent of this defendant, but as the agent of the company by which such additional policy of insurance was issued. (8) For that notice or information received by said M. G. McCargo in the manner stated in said replication, and at the time therein mentioned, is no notice to the defendant, for that it appears that said M. G. McCargo was then acting as agent of, and on behalf of, another company. (9) For that the alleged understanding and agreement between said M. G. McCargo and the plaintiff that the policy herein sued on was to be and remain in full force and effect is not an agreement binding upon this defendant, nor one which operates as the waiver of the forfeiture averred in the plea. (10) For that it does not appear that the alleged notice of the additional policy of insurance was given to the secretary of the defendant, and that his consent was obtained thereto in writing. (11) For that it is not averred that the alleged understanding or agreement with plaintiff that the policy herein sued on was to be and remain in full force and effect was made by any officer or agent of the defendant having authority to bind it in the premises. (12) That the alleged reference in the additional policy of insurance mentioned to the policy of insurance sued on in this case is in no sense binding upon this defendant, and does not serve to waive the admitted forfeiture of the policy sued on." To the ninth replication the...