Farmers' & Mech.S' Bene v. Fire Ins. Ass'n Of Roanoke And Botetourt Counties
| Decision Date | 17 September 1931 |
| Citation | 160 S.E. 315 |
| Court | Virginia Supreme Court |
| Parties | FARMERS' & MECHANICS' BENEV. FIRE INS. ASS'N OF ROANOKE AND BOTETOURT COUNTIES v. HORTON. |
Error to Hustings Court of Roanoke.
Action by W. H. Horton, who sues for the benefit of Susie G. Horton, against the Farmers' & Mechanics' Benevolent Fire Insurance Association of Roanoke and Botetourt Counties. Judgment for plaintiff, and defendant brings error.
Reversed, and judgment entered for defendant.
Argued before CAMPBELL, HOLT, EPES, HUDGINS, and GREGORY, JJ.
Leonard G. Muse and Woods, Chitwood, Coxe & Rogers, all of Roanoke, for plaintiff in error.
Horace M. Fox, of Roanoke, for defendant in error.
Designating the parties as they were designated in the trial court, plaintiff is seeking to recover on a fire insurance policy issued by the defendant company to Susie G. Horton on November 4, 1927.
Susie G. Horton is the wife of W. H. Horton, who has acted for her throughout this entire transaction. He applied for the policy, it was delivered to him, and it is he who is actively prosecuting the demand for recovery.
[I] The defendant corporation was chartered in 1873 by a special act of legislation. It is a strictly mutual company, and its policies, charter, constitution, and by-laws passed in pursuance thereof, make up the contract between it and its members, who are conclusively presumed to have knowledge of them all. Bixler v. Modern Woodmen, 112 Va. 678, 681, 72 S. E. 704, 38 L. R. A. (N. S.) 571.
Among the by-laws printed on this policy itself is one numbered 18, which reads as follows: "Any member of the Association who fails to pay any legal assessment within sixty days from the date of the making or levying of the same shall thereby forfeit his membership and all rights pertaining thereto and his policy shall be canceled, but he shall not be released from his obligation to pay his assessment; and the Secretary and Treasurer shall at once take steps to collect the same—provided that the Secretary or the Agent has given him at least thirty days' notice before the expiration of the sixty day limit."
On February 9, 1929, an assessment for losses theretofore sustained was levied. Notice of this assessment, properly addressed, was mailed to the plaintiff. He testifies that he never saw it. Probably it was lost through negligence at his home. On the same day a notice to the same effect, together with a number of tickets covering the property afterwards burned and other properties owned by the plaintiff and insured by him in this company, were sent to J. P. Saul, the agentthrough whom the insurance was written. Shortly thereafter, and within ten days, Saul wrote to Mr. Horton, saying:
Attached to this letter was a slip of paper on which appeared the items that went to make up the $157.75; that is to say, the figures that went to make up this sum appeared and nothing more. Mr. Horton says that he did not understand them, but there is nothing uncertain about the letter itself, and if any doubt in fact existed it was cleared up by Mr. Saul, who talked the matter over several times with him. Indeed, Horton's evidence is that Saul told him that he might pay them at his convenience—a statement flatly in conflict with his instructions.
It was Saul's duty, as it was the duty of all agents, to make settlement with his company at the end of sixty days for assessment tickets sent him for collection. In the instant case he failed to do this, and at a board meeting held on April 24, he was questioned as to why it had not been done. He replied that he was ready to make settlement and had collected all tickets sent him except the Horton tickets which would be paid within a few days. Thereupon, on that day, the policy in litigation was canceled.
On May 3, 1929, Saul sent to Horton this letter:
In answer to this letter Horton sent on May 4 check for amount due. The property insured was burned on May 7. On the face of this record, plainly, the plaintiff was too late unless he can show some adequate reason, or excuse, for delay.
For him it is said that a habit, custom, or usage had grown up between this company and its agents, under which they were permitted to extend credit to policyholders.
If it be true that through such a course of dealing this company had induced them to believe that the clause of forfeiture would not be insisted upon, it would afterwards be estopped to take advantage of delays for which it was responsible. Helme v. Philadephia Life Insurance Co., 61 Pa. 107, 100 Am. Dec. 621.
To this contention there are two answers. If any such custom existed, Mr. Horton did not know of it, and so could not have been misled. The other answer, still more conclusive, is that during the lifetime of his policy there was no such custom.
The secretary-treasurer is the executive officer of this corporation. Mr. E. W. Bowie had for many years filled these positions. Under his administration it was undoubtedly lax in making collections. He was succeeded by Mr. Howell, who went into office in May, 1927, and before plaintiff's policy was written. For the express purpose of putting an end to this careless method of doing business, he was ordered by the board of directors to see that by-law No. 18 was observed, and he promptly notified his agents of this new policy. Since that time it has been observed. It is perfectly true that agents do not always make settlement at the end of a sixty-day period for tickets placed with them for collection. Should an agent delay, say, for two weeks, and then report all tickets collected, the company would not know the date of their payment, and so it is possible that some policy which would have been forfeited had the facts been known may be continued in force. This is a possibility, but there is nothing to show that these agents were in the habit of violating their instructions, and certainly the company knew of no such habit.
Of course, it is possible that some policy may have slipped by—there were 2, 800 of them. But one swallow does not make a summer, nor one mistake a habit. As a matter of fact, Mr. Horton relied entirely upon his friend, Mr. Saul, who had undertaken to extend to him an unwarranted indulgence.
It Is next said that where credit is extended to an agent, who in turn extends it to the insured, no forfeiture can be enforced for nonpayment of premiums, and we are cited, as sustaining that proposition, to 32 Corpus Juris, 1312; Perea v. State Life Insurance Company, 15 N. M. 399, 110 P. 559; Cooley's Briefs on Insurance, vol. 1, p. 484; and Wytheville Insurance Co. v. Teiger, 90 Va. 277, 18 S. E. 195.
With it we have no quarrel. In such cases the company looks to its agent for payment, and he extends credit to the insured at his peril. Here there...
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