Elam v. Smithdeal Realty & Ins. Co.
| Decision Date | 07 December 1921 |
| Docket Number | 364. |
| Citation | 109 S.E. 632 |
| Parties | 182 N.C. 599, 18 A.L.R. 1210 v. SMITHDEAL REALTY & INS. CO. ELAM |
| Court | North Carolina Supreme Court |
Appeal from Superior Court, Forsyth County; Webb, Judge.
Action by I. R. Elam against the Smithdeal Realty & Insurance Company. From a judgment of nonsuit, plaintiff appeals. Reversed.
This action is to recover damages for failure to procure a policy of insurance protecting plaintiff's automobile in case of collision, etc. At the close of plaintiff's evidence on motion there was judgment of nonsuit, and plaintiff excepted and appealed.
The principal's contributory negligence will defeat an action in tort for his agent's breach of duty, but not an action for breach of contract, though in such action it will be considered on the issue of damages.
Parrish & Deal, of Winston-Salem, for appellant.
Holton & Holton, Swink & Hutchins, and O. O. Efird, all of Winston-Salem, for appellee.
There was evidence on the part of plaintiff tending to show that on or about March 31, 1919, the plaintiff entered into a contract with defendant company, doing business, among other things, as insurance agents and brokers, to procure a policy of $5,000 on the car of defendant affording protection against damage by fire or collision or other kind of accident; that shortly thereafter the said agent came to plaintiff, who was at the time presently engaged at his business in a tobacco warehouse and told witness he had obtained the policy desired and had left same for plaintiff at the garage with the proprietor, who had put the policy in the latter's safe; plaintiff, with a view of then paying the premium, asked for the amount and was told by the agent an officer and one of the owners of the defendant company, that plaintiff had 60 days in which to pay the premium, and it appeared that the premium was paid after the accident and after suit was instituted against defendant that within a week from this time, or near that plaintiff's car in a collision sustained damages to the amount of $1,000, and on application or preparation through the same agent for adjustment with the insurance company which had issued the policy it was ascertained that the policy did not extend to or cover such damages. There was evidence to the effect further that during the time the policy remained in the safe and before the injury, when plaintiff's car had a near accident, but sustained no pecuniary damage, the agent had assured plaintiff that in any event plaintiff was protected, as the policy he had procured covered risks of that kind, and that on another occasion when the owner of another car was about to procure insurance against accident and collision through defendant, plaintiff being present, the agent, referring to plaintiff, said he had a policy of the kind on the car owned by him, and also that, when plaintiff reported the loss and it was found on examination that the risk was not covered, the same agent, Mr. Smithdeal, expressed his regret, saying:
Upon this statement of the facts chiefly pertinent to the inquiry we are of opinion that the judgment of nonsuit should be set aside, and the cause submitted to the jury. It is very generally held that, where an insurance agent or broker undertakes to procure a policy of insurance for another affording protection against a designated risk, the law imposes upon him the duty in the exercise of reasonable care to perform the duty he has assumed, and within the amount of the proposed policy he may be held liable for the loss properly attributable to his negligent default. Rezac v. Zima et al., 96 Kan. 752, 153 P. 500, reported also in Ann. Cas. 1918B, 1035; Thomas v. Funkhouser, 91 Ga. 478, 18 S.E. 312; Backus v. Ames, 79 Minn. 145, 81 N.W. 766; Lindsay v. Pettingrew, 5 S. D. 500, 59 N.W. 726; Criswell v. Riley, 5 Ind. App. 496, 30 N.E. 1101, 32 N.E. 814; Reed Manufacturing Co. v. Wurt, 187 Ill.App. 379; Fellowes v. Gordon, 47 Ky. (8 B. Mon.) 415; Mechem on Agency, § 1258.
In resistance to the application of the principle to the facts of the present record, we are cited to a number of authorities to the effect that a policy of insurance when issued is considered as expressing the contract between the parties and has the effect of shutting off prior or contemporaneous parol inducements and assurances in contravention of the written policy. The position in proper instances is very generally recognized and has been approved in many cases in this jurisdiction. Clements v. Ins. Co., 155 N.C. 61, 62, 70 S.E. 1076; Floars v. Ins. Co., 144 N.C. 232, 56 S.E. 915. But in the instant case the action is not one against the insurance company in which plaintiff is seeking to hold it liable for an obligation not contained in the written policy, but plaintiff sues the agent and broker for negligent failure to perform a duty he had undertaken and assumed as agent by which plaintiff has suffered the loss complained of, and in our opinion the authorities cited are not apposite to the question presented on the record.
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