Connecticut Fire Ins. Co. v. Harrison

• Decision Date: 13 May 1935
• Docket Number: 31689
• Citation: 161 So. 459,173 Miss. 84
• Court: Mississippi Supreme Court
• Parties: CONNECTICUT FIRE INS. CO. v. HARRISON et al

161 So. 459

173 Miss. 84

CONNECTICUT FIRE INS. CO. v. HARRISON et al

No. 31689

Supreme Court of Mississippi

May 13, 1935

Division A

[Division A.]

1 INSURANCE.

General agent held antaorized to bind fire insurer by executing binder, even though binder was not delivered to insurer.

2 INSURANCE.

To cancel fire policy, five days' notice required thereby held necessary unless waived by insured.

3 INSURANCE.

Evidence that insured stated that new fire policy issued after cancellation of old policy without notice was satisfactory held insufficient to show that insured waived provision in new policy requiring five days' notice of cancellation, and hence cancellation was ineffectual.

HON. JAS. A. FINLEY, Chancellor.

APPEAL from the chancery court of Alcorn county, HON. JAS. A. FINLEY, Chancellor.

Suit involving a contest between the Connecticut Fire Insurance Company and the United States Fire Insurance Company as to which of them was liable to Walter H. Harrison, the insured. From a decree for the insured against the first-named company, and dismissing the bill as to the last-named company, the first-named company appeals, and the insured cross-appeals. Reversed and rendered.

Reversed.

Stovall & Stovall, of Okolona, for appellant.

A provision in an insurance policy requiring five days' notice to the insured in order to cancel a policy is a provision inserted for the benefit of the insured and such notice must be given to effect a cancellation unless waived by the insured.

Jernigan v. National Union Fire Ins. Co., 163 S.E. 762; Dent v. Frougs, Inc., 74 S.W. 237; Insurance Company of North America v. Burton, 294 P. 796; Gulf Insurance Co. v. Beckville Rural High School District No. 3, 38 S.W. 828.

As a general rule an agency to procure insurance is not, as a matter of law, presumed to continue for the purpose of canceling the insurance procured or of receiving notice of such cancellation. Such an agency terminates when the insurance is procured and the policy delivered to the principal.

Steward v. Coleman & Co., 120 Miss. 28, 81 So. 653; 5 Cooley's Briefs on Insurance (2 Ed.), page 4594.

It may be regarded as a well established principle also that evidence of a local usage or custom to give notice to the person procuring the insurance is insufficient to bind the insured by notice so given.

Grace v. American Central Ins. Co., 109 U.S. 278, 27 L.Ed. 932; 5 Cooley's Briefs on Insurance (2 Ed.), page 4595; Alliance Ins. Co. v. Continental Gin Co., 285 S.W. 257; Insurance Company of North America v. Burton, 294 P. 796; Commercial Union Co. v. Urbansky, 68 S.W. 653.

W. C. Sweat, of Corinth, for cross-appellant.

We content ourselves by saying to the court that the complainant is entitled to recover the amount of his claim, having already recovered against the Connecticut Fire Insurance Company in the court below, that is, of course, entirely satisfactory to. Harrison; but if this court should determine that the court below committed error in holding the Connecticut Fire Insurance Company liable and that there is no liability on the Connecticut Fire Insurance Company, then Harrison asks for a decree here against the United States Fire Insurance Company for the full amount of his claim with interest.

Butler & Snow, of Jackson, for appellee.

There was and is no question but that Mr. Everett had full authority to issue the binders, and that the binders, including that of the Connecticut for five hundred dollars on the tenant dwelling, constitute binding contracts of insurance. Of course the binder binding the Connecticut on the tenant dwelling was not valid if the previous policy of the United States Fire covering for a like amount on the tenant dwelling was not validly cancelled as Mr. Everett, the mutual agent of the two companies, so intended.

It is not material that the Connecticut binder had not been actually delivered, as actual delivery is not necessary to bind the company.

Equitable Fire v. Alexander, 12 So. 25; Scottish Union v. Warren Gee Lumber Co., 80 So. 9, 118 Miss. 740; 1 Cooley's Briefs (2 Ed.), page 627 et seq.

There is a rule to the effect that where an insurance agent is vested by the insured with authority to keep the property insured, such agent becomes the agent for the insured for the purpose of keeping the property covered by insurance, and this authority carries with it the authority to do all things necessary to carry out this purpose, including the right to cancel an existing policy and substitute another policy therefor.

Aetna Ins. Co. v. Renno, 96 Miss. 172; Northern Assurance Co. v. Newman Lbr. Co., 105 Miss. 688; May v. Hartford Fire Ins. Co., 297 F. 997.

Where such agent (insurance 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 days clause, accept cancellation and substitution--all without notice to or consent by the insured.

Pellaggi v. Orient Ins. Co., 148 A. 869.

A general agent with authority to insure property and to keep it insured may accept notice of cancellation and procure substituted insurance or renewal of insurance in another company.

Farrar v. Western Assurance Co., 159 P. 609; Georgia Home Ins. Co. v. Choctaw Cotton Oil Co., 5 P.2d 152; Hollywood Lbr. Co. v. Dubuque Fire Ins. Co., 92 S.E. 858; Hartford Ins. Co. v. McKinley, 77 So. 226; Insurance Company of North America v. Burton, 294 P. 799; Underwriters Agency v. Pride, 297 S.W. 19; Home Realty Co. v. New Hampshire Co., 83 N.W. 41; Allemania Fire Ins. Co. v. Zeving, 191 S.W. 903; Darton v. Norwich Union Ins. Co., 213 S.W. 230; Seabers v. Queen Ins. Co., 60 N.W. 994; Wilson v. German Company, 133 P. 715; Firemen's Insurance Company v. Simmons, 22 S.W.2d 45.

OPINION

McGowen, J.

This suit is a contest between two fire insurance companies as to which of them is liable to Harrison, the appellee here, for the loss by fire of a tenant house owned by the appellee, insured for five hundred dollars. The companies contesting are the Connecticut Fire Insurance Company and the United States Fire Insurance Company, the former hereafter being called the "Connecticut" and the latter the "United States."

The essential facts are: Ben E. Everett, doing business as Ben E Everett & Co., for many years operated a fire insurance agency in the city of Corinth, Mississippi, and was the general agent of both the Connecticut and United States Companies at the time these transactions transpired. In October, 1930, the appellee Harrison applied to Everett for fire insurance to cover his residence, household goods, and a tenant house, and a policy, in the total amount of three thousand three hundred dollars, covering two thousand dollars on his dwelling, five hundred dollars on household goods, and eight hundred dollars on the tenant house, was written by Everett for the appellee. The policy was issued by Everett for the Fidelity Phoenix Fire Insurance Company for a period of three years, expiring in October, 1933. On the expiration of that policy, in October, 1933, Harrison applied to Everett for a renewal of the insurance on his property, reducing the amount thereof and insuring for one year only on account of cramped financial condition, and, at that time, Everett delivered to Harrison a policy of fire insurance, in the Fidelity Phoenix Insurance Company, for the aggregate amount of two thousand six hundred dollars, one thousand five hundred dollars of which covered the dwelling, five hundred dollars the household goods, and six hundred dollars the tenant house in question; and Harrison paid the premium thereon. In February, 1934, Everett received instructions from the Fidelity Phoenix Insurance Company to cancel this policy, and, pursuant to this request, Everett, without first consulting Harrison, canceled this policy and executed another in the United States in the total sum of two thousand five hundred dollars, one thousand five hundred dollars of which covered the dwelling, five hundred dollars the household goods, and five hundred dollars the tenant house. Harrison was promptly notified by Everett of the cancellation of the policy...