Croft v. Hanover Fire Ins. Co.
| Decision Date | 13 April 1895 |
| Citation | 21 S.E. 854,40 W.Va. 508 |
| Parties | CROFT v. HANOVER FIRE INS. CO. et al. |
| Court | West Virginia Supreme Court |
Submitted January 28, 1895
Syllabus by the Court.
1. An oral executory contract for fire insurance is valid, the statute of frauds not applying to it.
2. If an oral contract for fire insurance has been made, and before the issuance of the policy the property is destroyed by fire, equity has jurisdiction to compel payment of the indemnity.
3. Though the assured understands the term to be covered by the insurance to be one year, and the agent of the insurance company understands it to be three years, costing in either case the same premium, this does not render the contract incomplete, so as not to warrant recovery for loss by fire occurring within one year.
4. Where an agent represents several insurance companies, and is intrusted with blank policies, signed by the officers, with authority to negotiate policies and issue them without referring them to the companies, and it is agreed by the insured that the agent shall place the risk in such company as he selects, and he does place it with a company, as shown by a memorandum made by him, the agreement is binding on the company.
5. Where, by agreement between the insured and the agent, the agent is to fix such amount of indemnity as he sees proper and he does fix it, as shown by a memorandum made by him, the oral agreement is binding on the company.
6. An agent of an insurance company authorized to negotiate risks may give credit in such executory agreement for the premium.
7. Unless in such agreement prepayment is made a condition precedent, the premium need not be paid until the policy agreed upon is ready to be delivered.
8. The agent, by mistake, entered in his memorandum the name of the wrong person as the assured. This will be corrected in a suit in equity on such executory oral agreement, and the person who owns the property insured and who negotiated the insurance may recover in his own name.
Appeal from circuit court, Wood county.
Bill by Walter L. Croft against the Hanover Fire Insurance Company and the Citizens' Fire Insurance Company. Decree for plaintiff, and defendants appeal. Affirmed.
Hutchinson, Hutchinson & Camden, for appellants.
Van Winkle & Ambler and Wm. G. Peterkin, for appellee.
This was a suit in equity in the circuit court of Wood county by Walter L. Croft against the Hanover Fire Insurance Company and the Citizens' Fire Insurance Company for the specific performance of an agreement to issue a policy of insurance upon a dwelling house, which was consumed by fire. The court decreed that the insurance companies pay the insurance stipulated for, and the companies appeal.
No policy was actually issued, but the suit is based on an oral contract to insure and to issue a policy accordingly. As the "Statute of Frauds and Perjuries," so called (Code c. 98), does not apply to insurance, an agreement to insure need not be in writing. Wood, Ins. § 4; May, Ins. § 14; Insurance Co. v Colt, 20 Wall. 560. I do not think clause 7 of chapter 98 of the Code applies to the case, even if the policy agreed upon was for three years. Kimmons v Oldham, 27 W.Va. 258. When a contract for insurance has been made, but no policy to evidence it has been issued, the remedy of the insured, after loss, may be by bill in equity on the principle of specific performance; and the court does not simply decree the specific performance of the agreement by the actual execution of a policy of insurance, and then compel the insured to bring an action on that policy, but, to avoid multiplicity of actions and delay, having the parties before it properly for specific performance, will at once decree the payment of the amount which would be recoverable under the policy if issued, agreeably to that principle of equity practice that, as all the necessary parties are before the court for one purpose, it will give full and complete relief, and not send them to another court. Wooddy v. Insurance Co., 31 Grat. 362; May, Ins. § 565; Wood, Ins. §§ 11, 12; Insurance Co. v. Colt, 20 Wall. 560. Or he may sue at law, by same authorities.
But the defendant companies say there was no contract to sustain a suit, because the contract was vague, uncertain, and incomplete. Herein lies the turning point of the case. As to proof, there is nothing peculiar in contracts of insurance. As in other cases, the contract must be definite and certain, and the parties must have agreed upon all essential terms. The contract must be such as to bind both parties,--the one to insure, the other to pay the premium. All elements must be agreed upon, and if anything is left open or undetermined, so that the minds of the parties have not met, no contract exists, and there is no liability for a loss; as, where the rate of premium is left undetermined, or the time when the policy shall attach, or the apportionment of the risk has not been agreed upon, or the insured retains control over the premium note or any papers the delivery of which is a condition precedent, or if anything remains to be done by the insured as a condition precedent, as the payment of premium, or if the duration of the risk is not agreed upon, or any condition precedent has not been complied with. The aggregatio mentium (union of minds) must be fully established, and nothing must remain to be done but to deliver the policy. The details of the contract must be fixed, and, if the agreement or understanding of the parties in reference thereto is not mutual,--that is, if one party understands the matter one way, the other another,--the minds of the parties have not met, and there is no contract in law or equity. Of course, the burden of proof to show such a contract as is enforceable is on the plaintiff. Wood, Ins. § 6.
The chief point of question in the contract, as it seems to me, is as to the length of time the policy was to run. It has been stated above that this is an essential element in a valid contract. The parties must agree upon a time for the duration of the policy. The plaintiff says that he applied for a policy on his dwelling house for one year, and understood that the agreement with the agents was for one year. One of the agents says he understood it to be three years. The agent says he made no memorandum in writing on this occasion. According to the evidence on both sides, in that interim an agreement was made for the insurance of the dwelling house in such sum as the agents should fix, at a certain rate, and the policy was to be made out and sent by mail to the insured, and he was then to pay the premium, or it was to be charged to his father, who had other insurance with these agents, as the agents preferred. The agents agreed and promised to send the policy. They had policies in blank, signed by the officers, and they had authority to fill out and deliver them without application to the chief officers of the companies. About one month after this, a brother of the plaintiff, by authority of his brother, met the one of the agents who had negotiated for the policy, and asked the agent for it, and was told that it had not been made out, as he had not satisfied himself as to the amount for which the policy should be written. The plaintiff's brother told the agent he wished it fixed up, and the agent himself says that he told the brother that he would fix it then as far as he could, as he was on his way to the train to go on a trip, but would attend to it; and he then wrote in a private memorandum book this memorandum: The brother told him to send the policy, and he would send the money to pay the premium, to which the agent assented. The evidence shows the agent agreed to credit; did not demand prepayment. It is not claimed otherwise. About a month after this interview between this agent and the plaintiff's brother, the house was destroyed by fire, and this brother, the next day, called on the agent, and asked for the policy. The agent said he had written it, but had mislaid it, and searched and could not find it, and said he would look for it, and to call later, and then the brother informed him of the fire. In the afternoon the brother called again for the policy, but the agent had not found it. Later this agent concluded he had never written it up. After this the plaintiff tendered the agent the premium money, but he declined it, saying that he had informed the company of the fire, and the adjuster would soon come, and, "under th e circumstances," he would not take the money.
We can say from the evidence on both sides that an agreement to insure was made, and nothing remained to be done but to issue the policy, and that the agent promised to do this. All the elements were settled, except as to time to be covered by the policy, let us say. The property was named. The plaintiff gave its value. The amount of the indemnity was left by the plaintiff absolutely to the decision of the agent. He would have right to fix that anyhow. It was with him to say just how much he would insure it for. He did fix it, as the memorandum shows. The rate of premium was fixed. The discretion to select the company was left to the agent. The agent, as a witness, says it was only through his neglect or forgetfulness that the policy was not issued. He says the policy should have been issued. But the insured asked and understood that the insurance was to be one year, while the agent understood it to be three years. What effect can this have? The defense would use it to show there was no finished agreement, under that principle of law, stated above, that all elements must be agreed, and time is an essential...
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