Corp. Of v. Franklin
| Decision Date | 02 September 1924 |
| Docket Number | (No. 3985.) |
| Parties | CORPORATION OF ROYAL EXCH. ASSUR. OF LONDON . v. FRANKLIN. |
| Court | Georgia Supreme Court |
CORPORATION OF
ROYAL EXCH. ASSUR. OF LONDON .
v.
FRANKLIN.
(No. 3985.)
Supreme Court of Georgia.
Sept. 2, 1924.
[124 S.E. 172]
Hill and Gilbert, JJ., dissenting.
Certified Questions from Court of Appeals.
Action by T. B. Franklin, for use of, etc., against Corporation of the Royal Exchange Assurance of London. Judgment for defendant, and plaintiff brought error to Court of Appeals, which certified questions to Supreme Court. Questions answered.
The Court of Appeals requested instruction upon the following questions, a determination of which is necessary for a decision of this case:
A policy of fire insurance which covered an automobile belonging to the insured contained the following provisions:
"It is a condition of this policy that it shall be null and void if the interest of the assured in the property be other than unconditional or sole ownership, or if the subject of this insurance be or become.incumbered by any lien or mortgage except as otherwise indorsed hereon.
"It is a condition of this policy that failure on the part of the assured to render such sworn statement of loss to this company within 60 days of the date of loss (unless such time is extended in writing by the company) shall render such claim null and void.
"No officer, agent, or other representative of this company shall have power to waive any of the terms of this policy, unless such waiver be written upon or attached hereto, nor shall any privilege or permission affecting the insurance under this policy exist or be claimed by the assured, unless so written or attached."
(1). Where personal property is insured against loss or damage from fire under an insurance policy containing the above provisions, and the insured during the life of the policy notifies one who is "agent" of the insurer, with whom the policy has been left by the insured for safe-keeping for the insured's benefit, of his intention to incumber the property with a mortgage or a bill of sale as security for a loan, and requests such agent to make such necessary entry and indorsement in writing upon the policy as will protect the property against loss from fire when so incumbered; and the agent assures the insured that this will be done; and the insured allows the policy to continue to remain in the hands of the agent, and, relying upon the agent to carry out such instructions, and without knowledge that such instructions have not been carried out, incumbers the property, will the insurer, in the event that the agent fails to make any written indorsement or attach any writing to the policy, be, as a matter of law, estopped from defending against a loss thereunder, upon the ground that such entry had not been made by indorsement upon the policy or by a writing attached thereto, or would a jury be authorized to find that the insurer was so estopped?
(a) In a suit by the insured against the insurer, to recover under an insurance policy containing the above provisions, for a loss by fire of the property insured, which, after the policy had been issued, had been incumbered with a mortgage to secure a loan made to the insured, where no indorsement or writ-
[124 S.E. 173]ing was attached to the policy giving the insured permission to incumber the property or providing that the policy should continue to cover the property when so incumbered, was the insurer estopped, under the following state of facts, as a matter of law, from setting up this defense, or would a jury be authorized to find that the insurer was so estopped?
When the policy was issued the insured left it for safe-keeping with the insurer's local agent through whom it was issued. Later, during the life of the policy, the insured approached the individual who had issued the policy to him, and who was then the cashier of a bank, for the purpose of negotiating a loan to be secured by a bill of sale or mortgage upon the property insured and covered by the policy, and who was also still the "agent" of the insurer, but whose duties as such "agent" were not defined. The insured, when making application for the loan, told this person to whom he made the application that he would "give him a showing on the car and some mules. He told me, 'All right.' I told him after he made the note to be sure and make the proper indorsement on the policy. I told him to make the insurance in protection of the bank. The car was insured then, and I told him to be sure and keep the policy up for me, and to make it payable to the bank—proper indorsement for the protection of the bank. He told me he would; he said. 'I will fix it all right.' Of course I thought he (lid. and I didn't know it until the time of the trouble. I always thought it had been done. I gave orders to do it, and he agreed to do it." Whereupon the insured executed a mortgage in favor of the bank upon the property covered by the policy. This individual, who still at the time had the policy in his possession for safe-keeping for the benefit of the insured, and who at the time "carried on in connection with [his] business as cashier at the bank the business of fire insurance, [and] represented the [insurer], " failed to make any indorsement on the policy, or to attach any writing thereto. This "agent, " in his testimony, which was undisputed, said: "I drew the paper for [the insured] to sign to loan him some money. He said something to me about insurance on this property; he said he had it insured, and said I could fix that up for him all right; he said, 'Fix it so as to protect the bank;' he said for me to fix it. I told him I would look after it all right and make the indorsement. I agreed to indorse this policy in favor of the bank. By indorsing it I mean putting an indorsement on it—a loss clause payable to the bank as its interest might appear. I am familiar with that form. 1 did not do it. I don't know why, I put it up and really forgot it, and never did do it; just forgot it; just negligence on my part. [The insured] told me to do it. This policy from the date of its birth was in the vault of the bank; [the insured] never had it. I don't reckon he had ever seen it or knew what company it was in. I knew it was there. I was agent for the [insurer], and I kept the policy. I have never returned any premium to [the insured]. I took the money for the policy."
See, in this connection, 3 Cooley, Briefs on Insurance, 2G17, where the author states:
"If an insurer or authorized agent consents to changes which are required to be in dorsed on a policy and promises to make the necessary indorsement, having access to the policy for this purpose, but fails to make the indorsement through mistake, oversight, or neglect, the insurer will nevertheless be bound, if not by waiver, at least by an estoppel in pais." See also the same author to the effect that "such estoppels do not arise upon the power or lack of power of an agent to change the provisions of the policy or waive any of its terms, but arises in law because of the acts of the company through its agent acting within the scope of his apparent authority as its representative." 3 Cooley, Briefs on Insurance, 2508.
See, also, Johnson v. Ætna Ins. Co., 123 Ga. 404, 51 S. E. 339, 107 Am. St. Rep. 92; Lippman v. Ætna Ins. Co., 108 Ga. 391, 33 S. E. 897, 75 Am. St. Rep. 62; Simonton v. Liverpool, etc., Ins. Co., 51 Ga. 76; Sparks v. National Union Fire Ins. Co., 23 Ga. App. 38, 97 S. E. 462.
(2) Where property covered by a fire insurance policy has been damaged by fire, and the insurer has sent an "adjuster" to "investigate the loss, " will a statement by the adjuster to an agent of the insured, authorized to adjust and collect the loss, made before the expiration of the time provided in the policy for rendering and filing a proof of loss, to the effect that "he had the loss and [would] be back * * * in the next day or two and adjust it, " that it would not be necessary for the insured "to fix the proofs of loss, " but that he, the adjuster, "would be back in a day or two and would adjust it." as a matter of law amount to a waiver by the insurer of its right to insist upon the filing by the insured of the proof of loss within the time specified in the policy as a defense against a suit by the insured to collect under the policy, or will it authorize a jury so to find?
Bryan & Middlebrooks, of Atlanta, and H. C. Hatcher, of Waynesboro, for plaintiff in error.
C. H. & R. S. Cohen, of Augusta, and F. S. Burney, of Waynesboro, for defendant in error.
HINES, J. [1] The policy of fire insurance involved in this case contains these provisions:
"It is a condition of this policy that it shall he null and void if the interest of the assured in the property be other than unconditional or sole ownership, or if the subject of this insurance be or become incumbered by any lien or mortgage except as otherwise indorsed hereon. * * * It is a condition of this policy that failure on the part of the assured to render such sworn statement of loss to this company within sixty days of the date of loss (unless such time is extended in writing by the company) shall render such claim null and void. * * * No officer, agent, or other representative of this company shall have power to waive any of the terms of this policy, unless such waiver be written upon or attached hereto, nor shall any privilege or permission affecting the insurance under this policy exist or be claimed by the assured unless so written or attached."
[124 S.E. 174]The Insured notified the agent of the insurer, with whom the policy had been left by the insured for safe-keeping for the insured's benefit, of his intention to incumber the property with a mortgage or bill of sale as security for a loan, and requested the agent to make the necessary entry and indorsement in writing upon the policy to permit such incumbrance. The agent assured the insured that this would be done. The policy remained in the hands of the agent. Relying upon the agent to carry out...
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