Fidelity & Cas. Co. v. Ballard & Ballard Co.

• Decision Date: 12 January 1899
• Parties: FIDELITY & CASUALTY CO. v. BALLARD & BALLARD CO. [1]
• Court: Kentucky Court of Appeals

48 S.W. 1074

105 Ky. 253

FIDELITY & CASUALTY CO. v. BALLARD & BALLARD CO. ^[1]

Court of Appeals of Kentucky.

January 12, 1899

Appeal from circuit court, Jefferson county.

"To be officially reported."

Action by the Ballard & Ballard Company against the Fidelity &amp Casualty Company on a contract of insurance. Judgment for plaintiff, and defendant appeals. Affirmed.

Pryor O'Neal & Pryor and Phelps & Thum, for appellant.

E. P Humphrey and W. B. Dixon, for appellee.

PAYNTER J.

The parties are corporations,--the appellant an insurance company; the appellee engaged in the milling business. The appellee was desirous of taking out insurance policies,--one for its own protection; and one for the protection of its employés. It therefore made application to the appellant for two policies of insurance,--one known as the "Workman's Collective Policy"; the other, as "Employers' Liability Policy." About the 18th of October, 1892, after some negotiations, applications were made for these policies. This controversy is not in regard to a liability on the "Employers' Liability Policy" or contract; hence it is unnecessary to state the terms of such policy or contract. The "Workman's Collective Policy," for which application was made, is one by which the appellant agrees to pay one year's full wages to the party injured in case of death, and one-half wages in 52 weeks for certain injuries. This policy was to be issued to the appellee for the benefit of its operatives. One of its operatives, Albert Heil, while in the discharge of his duties, was killed on October 27, 1892; and, on the day following, the appellant gave it notice that the application for the policy had been rejected. So, the employé lost his life between the date of the application and the notification of its rejection, although it appears that the appellant's agent, in Louisville, had received notice of the rejection of the application before the accident.

The appellee contends that the appellant, through its agent agreed, in consideration of its application and its promise to pay the premium, that the insurance should be in force until it rejected the application, and gave it notice thereof. The appellant admits that it made such an agreement with the appellee, but with a condition that the application was approved at the home office, in New York City. The agent of the appellee, negotiating for the insurance, testifies that he thought he had made a formal written application for the policy. The appellant presents an unsigned application, which it claims is the one which was sent to the home office, and rejected. The agent of the appellee is unable to say whether or not the unsigned application is the one which was filled out for the policy. In effect, the contract, as contended for by the appellee, is in parol, because, according to its claim, the policy was not to be issued unless the application was approved at the home office of the appellant; but until it was disapproved, and it received notice to that effect, the insurance was to be in force. The resident agent for the appellant, who has charge of its affairs in this state, testifies that he was authorized to, and did, make such contracts, though he said it was his custom to give a writing to that effect. Under the state of facts presented, the right of the appellee to recover depends upon whether or not the authorized agent of the appellant made such an agreement. It is not contended that such an agreement cannot be enforced. Courts almost, if not quite, uniformly have held that such agreements are enforceable.

It was held in Insurance Co. v. Spiers, 87 Ky. 293, 8 S.W 453, that a "contract of insurance may be by parol. It is not within the statute of frauds. Such a contract, although in writing, may be changed by parol, even though it provide that it shall only be done by writing, because men cannot so tie their wills as not to be able thereafter to do by consent what the law allows." It was said in Walker v. Insurance Co., 56 Me. 376: "At common law, contracts of insurance are placed on the same footing with other contracts, in respect to the capacity of the parties to contract, the subject-matter of the contract, and the mode of contracting. *** It being competent for the defendants, as we have seen, to make a contract of insurance without...