Continental Casualty Co. v. Monarch Transfer & S. Co.

• Decision Date: 06 January 1930
• Docket Number: No. 16515.,16515.
• Citation: 23 S.W.2d 209
• Court: Missouri Court of Appeals
• Parties: CONTINENTAL CASUALTY CO. v. MONARCH TRANSFER & STORAGE CO.

23 S.W.2d 209

CONTINENTAL CASUALTY CO. v. MONARCH TRANSFER & STORAGE CO.

No. 16515.

Kansas City Court of Appeals. Missouri.

January 6, 1930.

Appeal from Circuit Court, Jackson County; O. A. Lucas, Judge.

"Not to be officially published."

Action by the Continental Casualty Company against the Monarch Transfer & Storage Company. From a judgment for defendant, plaintiff appeals. Reversed and remanded.

Charles M. Miller and Shughart & Johnson, all of Kansas City, for appellant.

Carl Crocker, of Kansas City, for respondent.

BLAND, J.

This is an action for the collection of an insurance premium claimed to be due from the defendant to plaintiff on account of the alleged issuance of an employers' liability insurance policy by the latter to the former. There was a verdict and judgment in favor of defendant and plaintiff has appealed.

The policy in suit was issued on July 8th, 1922, as of March 18th of that year, following a succession of binders beginning at the earlier date, through a broker who finally delivered it to defendant on August 2nd. The policy was returned on September 14th and marked cancelled by defendant. This action is for the earned premium to the last mentioned date. Defendant denies the broker's authority to represent it, an acceptance of the insurance and liability for the premium.

The facts show that defendant was conducting a general transfer and storage business in Kansas City and that it was carrying employers' liability insurance in the New Amsterdam Casualty Company under a policy which expired on March 18th, 1922.

Plaintiff's witness, Charles A. Ricker, testified that he was a member of the firm of Ricker, Norris & Maiden, insurance brokers in Kansas City; that he was a stockholder in the defendant company and a friend of Mr. Bray, president thereof; that a short time prior to the expiration of the New Amsterdam Casualty Company's policy he had a conversation with Mr. Bray in reference to liability insurance for the defendant; that Bray complained that he was paying too high a rate for the liability insurance defendant was carrying; that the witness suggested, in view of defendant's experience of having a small number of accidents or claims, that it was entitled to a better rate and asked Bray's permission to negotiate for one; that Bray gave him the necessary data to form the basis of what is called an "experience rate"; that the witness communicated with Lyle Stephenson, the Kansas City agent for plaintiff, who issued for plaintiff a ten day binder covering the insurance from March 18th, 1922; that at the interview above mentioned Bray turned over to the witness defendant's insurance policy in the New Amsterdam Casualty Company and at the same time instructed the witness that upon the expiration of that policy "to cover it so that he (defendant) would be protected; told me to take this policy and if I could get him a rate that was suitable, to write him a policy and bring it to him."

Ricker further testified that from time to time thereafter binders were issued until July 8th, 1922, when the policy in controversy was issued to expire on March 18th, 1923; that the delay in the issuance of the policy was due to the fact that he was trying to secure a lower premium to which defendant was entitled in view of its experience relative to accidents to employees, and that he told Bray of these facts and of the issuances of the binders. He further testified that one of the binders was delivered to Bray.

On August 2nd Ricker mailed the new policy to Bray and also the expired policy in the New Amsterdam Casualty Company. The new policy had been received by Stephenson from plaintiff and had been delivered to Ricker by the former. In the letter accompanying the policy Ricker called attention to his having secured a reduction of 25½% in the premium rate from the so called manual rate.

Ricker further testified that when he mailed Bray the policy he did not know whether it would be acceptable to the latter but whether it would be or not he continued to attempt to get a better rate because he always worked for the interest of his client in such matters; that the brokering of this policy with Lyle Stephenson was the only insurance business that he had ever transacted with Stephenson.

On August 4th, defendant by its president, Bray, acknowledged receipt of these policies and requested Ricker to call at the office the earliest possible date as the writer was desirous "of having a heart to heart talk" about the insurance. The policy remained in defendant's possession until September 14th, when Bray returned it to Ricker with the following letter:

"Dear Friend Charlie: I am herewith returning to you the policy of the Continental Casualty Company issued from the office of Lyle Stephenson.

"I regret very much to take this action because of my very high personal regard and esteem for you, but we do not consider we have had any protection in view of what has transpired in recent days. We therefore ask that you please return the policy to Mr. Stephenson as same has never been accepted by us."

Bray, on behalf of defendant, testified that he was solicited by Ricker in reference to procuring defendant's liability insurance and that Ricker requested that the witness give him permission to get an experience rate; that the witness knew the agency with which Mr. Ricker was connected but did not know what its relationship was with any insurance company; that Ricker stated he would endeavor to get a lesser rate and submit it for the witness' approval; that the witness stated to Ricker that he would not accept any insurance unless it were written at a rate in comparison with what other companies were giving and that he did not tell "Mr. Ricker or any other insurance agent to procure a policy costing $300.00 or $500.00 for our company without knowing just how that charge would be made." Bray further testified that Ricker told him that he would report at once to the insurance company that he (Ricker) was "representing" and that he had covered the defendant with a binder, but that the witness did not know whether this had been done; that defendant never received any binder; that he furnished Ricker the information requested upon which an experience rate could be calculated; that some time in July he telephoned Ricker that an attorney was demanding payment of damages on account of personal injuries received by an employee of defendant who had been injured on April 1st, 1922, "and I asked Mr. Ricker to let us know what was the standing of our company in respect to insurance"; that he looked to Ricker for insurance; that he did not know of the issuance of the policy, which arrived immediately after he reported the accident to Ricker, until he received it; that the policy thereafter lay on his desk until September 14th when he returned it to Ricker; that the reason he did not accept the policy was because "the rate was almost double what competitors were paying, whom I knew to have a poorer experience than we have"; that he told Ricker between August 4th and 14th that he would not accept the policy on account of the high rate. The evidence further shows that between August 4th and August 16th negotiations were had between Bray and Ricker orally and by letters concerning the premium rates paid by other concerns as compared with that charged defendant in previous policies. In these negotiations nothing was specifically stated as to an acceptance or rejection of the policy until finally Bray told Ricker be would not take the policy for the reason stated above.

On August 12th defendant was served with a summons in a suit by one Hays on a claim for an accident occurring April 1st, 1922. (Hays was apparently the injured employee that we have already mentioned.) Bray reported to Ricker as soon as the former received the summons.

Over the objection of plaintiff Bray was permitted to testify and defendant was allowed to introduce letters showing that Bray, at Ricker's request, sent the petition and summons in the Hays case to Ricker and that plaintiff had refused to accept responsibility under the policy and that defendant was forced to settle the case at its own expense. In rebuttal plaintiff introduced a statement signed by Bray dated August 28th, in the nature of a report in the Hays case, in which statement he said:

"The first notice we gave the insurance company of the accident was when I notified Chas. A. Ricker verbally on the day we got the summons in Hays suit against us which was about August 12, 1922. Ricker is the man who wrote our policy in the Continental. He brokered it through Lyle Stephenson as I understand it."

Plaintiff also offered a letter dated August 29th, 1922, from its attorneys in Kansas City to defendant stating that because no notice of the accident, which occurred on April 1st, had been given the insurance company until August 26th, nearly five months later, whereas the policy required immediate written notice of any accident, it was necessary to submit the matter to the home office. Plaintiff also introduced another letter to defendant dated September 6th, 1922, in which these attorneys again stated that for reasons set forth in their previous letter plaintiff declined to hold itself liable to defend the suit or pay any adverse judgment; that the company would, however,...