American Ins. Co. v. Millican, 8 Div. 561.

• Decision Date: 18 January 1934
• Docket Number: 8 Div. 561.
• Citation: American Ins. Co. v. Millican, 228 Ala. 357, 153 So. 454 (Ala. 1934)
• Parties: AMERICAN INS. CO. v. MILLICAN.
• Writing for the Court: BROWN, Justice. BROWN, Justice.
• Court: Alabama Supreme Court

153 So. 454

228 Ala. 357

AMERICAN INS. CO. v. MILLICAN.

8 Div. 561.

Supreme Court of Alabama

January 18, 1934

Rehearing Denied March 22, 1934.

Certiorari to Court of Appeals.

Petition of the American Insurance Company for certiorari to the Court of Appeals to review and revise the judgment and decision of that court in American Insurance Co. v. J. M Millican, 153 So. 448.

Writ denied.

Coleman Spain, Stewart & Davies, of Birmingham, for petitioner.

Tennis Tidwell, of Decatur, opposed.

BROWN Justice.

The petitioner, defendant in the suit on a fire insurance policy issued, as averred in the complaint, "on the 28th day of September 1928," invites a review of the rulings of the Court of Appeals on the pleadings-the replications to defendant's pleas 4, 6, 7, and 9, to which demurrers were interposed and overruled by the trial court, and the rejoinders filed to said replications, to which the court sustained demurrers.

Plea 4 set up the failure of the plaintiff to furnish proof of loss in accordance with the provisions of the policy.

Plea 6 alleged a violation of the stipulation in the policy contract voiding the policy if insured incumbered the property after the issuance of the policy, in that "on to wit April 10 1929, said insured property became mortgaged or incumbered by the execution by plaintiff and his wife of a mortgage or incumbrance to the Hartselle Motor Co." (Italics supplied.)

Plea 9 set up the provisions of the policy against incumbrance, and alleged "that said insured property became mortgaged or incumbered on to wit January 25, 1929, by the execution of a mortgage by plaintiff and his wife to one Mollie Turney to secure the sum of to-wit $150.00." (Italics supplied.)

The group of replications filed in answer to plea 4 alleged: "That one J. R. Howell, on the occasion hereinafter referred to, was the agent of the defendant, and as such had authority to take risks and transact the business of fire and marine insurance for the defendant, and that a day or two after said fire occurred the plaintiff informed the said Howell of the said fire and the loss under said policy, and the said Howell stated to plaintiff that he need not do anything further, and that he need not make any proof of loss to the defendant, and that the defendant would settle the loss and damage which plaintiff sustained by said fire within a few days."

On the principle stated in Yorkshire Ins. Co., Limited, v. Gazis, 219 Ala. 96, 121 So. 84, "that an agent authorized to write policies of fire insurance is a general agent in so far as to bind the insurer by his waiver of conditions and warranties inserted in the policy for the insurer's benefit," the Court of Appeals correctly held said replications were free from demurrable defects.

The group of replications answering the defense set up by pleas 6 and 7 alleged that "Howell was the agent of the defendant on the occasions hereinafter set forth, and as such agent he had authority to take risks and transact the business of fire and marine insurance for the defendant," and with knowledge of the fact of the alleged incumbrances on the insured property accepted from the plaintiff a renewal premium thereon, and extended the insurance on said property under the policy sued on for another year, covering the date of the loss by fire.

These averments, on the principles in Yorkshire Ins. Co. v. Gazis, supra, were an answer to the defenses set up in pleas 6 and 7, and the demurrers to this group of replications were properly overruled.

Another replication to pleas 6 and 7 averred that the mortgages constituting the incumbrances set up in said pleas were inefficaciously executed and void because they were on the homestead of the plaintiff, occupied by the plaintiff and his family, at the time, and "that there was no acknowledgment by her before any officer authorized by law to take acknowledgments of conveyances."

The defendant, by the averments of its pleas, assumed the burden of proving the efficacious execution of the mortgages, and the facts alleged in the special replications were provable under the general replications, so the overruling of the demurrer to this replication was without injury to the defendant.

Plea 9 and the replications thereto, with the exceptions to be hereafter noted, are in substance and legal effect the same as pleas 6 and 7, except it related to a different mortgage, and the demurrers to said replication on principles heretofore stated were properly overruled.

We deem it unnecessary to notice the rulings in respect to the replications to plea 8, as the Court of Appeals finds as a fact that the foreclosure proceedings set up in said plea 8 were commenced after the loss by fire under said policy, and could in no way affect the defendant's liability.

The jury was instructed by the trial court, as the opinion of the Court of Appeals states, that a waiver of the provisions of the policy could not be predicated on the acts of May, one of the insurance adjusters, in investigating the cause of the fire and the nature and extent of the loss.

Replication 16, setting up a waiver by defendant's agent Norris, is well within the principle, that "An adjuster of an insurance company, with full power to make examinations, investigations, and adjustments of a loss, has authority to waive the conditions of the policy; and if such adjuster, with full knowledge of the breach of the conditions of the policy of the insured, enters upon the investigation and adjustment of the loss, and treats the policy as valid and subsisting, any defense the insurance company had to the policy, by reason of the breach of the conditions, will be deemed to have been waived." Georgia Home Insurance Co. v. Allen, 128 Ala. 451, 30 So. 537; Indemnity Company of America v. Pugh, 222 Ala. 253, 132 So. 165.

The petitioner, however, insists that said replication was bad in that it failed to show a consideration for the alleged agreement to settle the loss, citing in support of this contention Great American Ins. Co. v. Dover, 219 Ala. 530, 122 So. 658, 659. It is important to note here that in that case the replication there dealt with set up a promise to pay, not made by an agent, but by the insurer, and neither alleged a consideration for the promise, nor the facts and circumstances constituting a waiver or estoppel. The replication was: "2. The defendant, with full knowledge of the alleged breach of the conditions of the said policy, agreed and promised to pay after the loss the full amount due on said policy, to-wit: eighteen hundred dollars."

In disposing of the question, it was observed: "We have stated replication 2 and defendant's (appellant's) special rejoinder. It will be noted the replication alleges a promise to pay, made after the loss, by the 'defendant'-not an agent-with full knowledge of the breach of the conditions of the policy, meaning breach of the warranties of the policy. If the...