Fillgraf v. First Nat. Ins. Co. of Am.

• Decision Date: 18 September 1934
• Docket Number: No. 42299.,42299.
• Citation: 256 N.W. 421,218 Iowa 1335
• Parties: FILLGRAF v. FIRST NAT. INS. CO. OF AMERICA.
• Court: Iowa Supreme Court

218 Iowa 1335

256 N.W. 421

FILLGRAF

v.FIRST NAT. INS. CO. OF AMERICA.

No. 42299.

Supreme Court of Iowa.

Sept. 18, 1934.

Appeal from District Court, Clay County; F. C. Davidson, Judge.

The plaintiff commenced an action against the defendant, an insurance company, to collect on a fire insurance policy in the amount of $3,000. Plaintiff asked that the policy be reformed by extending the date of its expiration. Defendant filed a motion to transfer the case to equity, and upon order of court it was so transferred and tried as an equitable action. Judgment and decree of the lower court was rendered, reforming the policy, entering judgment against the defendant company in the amount of $2,700. Both sides have appealed. The insurance company, having perfected its appeal first, is designated as the appellant. The opinion states the facts.

Affirmed.

Sullivan, McMahon & Linnan, of Algona, and G. C. Murray, of Sheldon, for appellant.

Cornwall & Cornwall, of Spencer, and H. E. Narey, of Spirit Lake, for appellee.

MITCHELL, Chief Justice.

A few days before the Fourth of July, 1931, a young American boy, whose name does not appear in the record, filled with enthusiasm and the desire to demonstrate his patriotism like boys of his age at that time of the year, entered a drug store which had a large display window filled with fire crackers and other explosives used to awaken the patriotism of the people of this country on the Fourth of July. In some way or other, no doubt by crowding or pushing, the young boy came close to the display window. Whether it was a lighted match, a piece of punk, or a torpedo he dropped into the window, probably never will be known. But, before the fire that followed was extinguished, the business section of the beautiful city of Spencer was practically destroyed, and out of this fire arose the case which is now before us.

The First National Insurance Company of America, the appellant in this case, is an insurance company, engaged in the writing of fire and tornado insurance, and was duly authorized to transact insurance business in the state of Iowa. It had as its general agent for the territory, including Iowa, one Arthur Cobb, whose offices were located at Omaha, Neb. C. H. Tyrrell was a resident of Spencer, Iowa, and was duly appointed local agent for the appellant company early in 1930 by the general agent. After his appointment, there was forwarded to Tyrrell by the insurance company a box containing twenty or twenty-five fire insurance, tornado, and combined policies, together with forms, indorsements, and blanks such as are used in writing policies. The policies were the usual Iowa form, signed by an officer of the company, with a blank space for the agent to sign when the policy was issued. According to Tyrrell's testimony, and it is not contradicted, at the time he received the blank policies and supplies he received a letter from the insurance company, stating he could figure contracts of insurance, and issue policies and indorsements, and make remittances to the company of the amounts of premiums he collected. He also received a certificate from the insurance commissioner of the state, stating that he was appointed agent of the appellant company.

Tyrrell's office was also located in one of the buildings destroyed by the fire, and all of the papers and blank policies were destroyed. Some time after the fire, he received a request from the appellant company to return the policies to the company, but, as they had been destroyed in the fire, he could not do this and made an affidavit that they were lost.

In April of 1930 Tyrrell solicited the appellee, who was a practicing dentist in Spencer, and who had his office in one of the main buildings of the city. The appellee agreed to take an insurance policy with appellant company for a period of twelve months, from May 5, 1930, to May 5, 1931. No formal application was prepared. Tyrrell, however took the necessary information and sent it to Cobb, the general agent, and asked him to send out the policy. Cobb prepared the policy and sent it to Tyrrell. The policy was in the usual form, and stated, among other things, “issued at its Spencer, Iowa, agency, Clarence H. Tyrrell, Agent.” Tyrrell delivered the policy to the appellee, and received the full premium from Dr. Fillgraf in the amount of $38.70. However, Tyrrell did not send in the premium to the company at that time. On August 27, 1930, the general agent, Cobb, wrote a letter to appellee, advising that the company had elected to cancel the policy in five days, and directed him to apply to Tyrrell for return premium, if any. The appellee immediately took the matter up with Tyrrell, and asked why the policy was being canceled, and Tyrrell stated to him that he had not sent the premium to the company, but promised he would see that it was paid within five days. Tyrrell did write to the general agent on September 6, 1930, with reference to delay in remitting the premium, and at that time inclosed his check for the amount which was due the insurance company. But, unfortunately, the check was not honored. About December 4, 1930, the appellant company received from Tyrrell's father remittance for the premium which was due, and wrote a letter to the appellee, stating that the policy had been reinstated and that it was in full force and effect. As soon as Dr. Fillgraf received the letter, advising him that the policy was in force, which letter was received on or about December 4, 1930, he went to Tyrrell and asked why this policy had been canceled from the first part of September until the first part of December, and was told by Tyrrell that it had been canceled during that time because he (Tyrrell) had not sent the premium to the company, and on account of the fact that the appellee had no insurance during that time the policy was automatically extended after May 5, 1931, for the length of time it had been canceled, and this would and did give to the appellee extended insurance for approximately three months, because Dr. Fillgraf had paid for the full year of insurance, and would receive such extension. At the time that Dr. Fillgraf received the letter from the company, on or about December 4, 1930, informing him that the policy had been reinstated, that letter referred him back to the letter which he had received on or about the 1st of September, which letter referred him to Tyrrell to see about the return premium. Tyrrell never reported to the appellant company or its general agent the conversation he had, wherein the insurance was extended for a period of three months. The company records show, both at the office of the general agent and at the home office, that the policy was canceled on September 3, 1930, and was reinstated on December 4th. The fire occurred on June 27, 1931. After the fire, the appellee reported it to Tyrrell, who then informed the appellant company which company immediately denied liability.

The appellee commenced an action against the appellant company, asking first that the policy be reformed and corrected by inserting therein the correct legal description of the premises; that the policy be further reformed and corrected by inserting in lieu of the expiration date of May 5, 1931, the date of August 6, 1931; that the cause be docketed on the equity side of the calendar for the purpose of making such corrections, and, when the same were so made, that the cause be transferred to the law side of the calendar for trial of the law questions involved. The appellant company filed a motion to transfer the case to equity, and, upon order of the court, the case was transferred to the equity side of the calendar and tried as an equitable case. The insurance company filed an answer, denying that it was indebted to the appellee in any amount, and specifically denied that C. H. Tyrrell was the representative of the insurance company or that he was authorized to represent the insurance company in the city of Spencer except as a soliciting agent, and denied that there was any holding out to the public that Tyrrell was anything more than the soliciting agent of the insurance company. The amount claimed by the appellee was $2,999, with interest and costs. The case was tried to the court. The court found in favor of the appellee and against the insurance company, and entered a decree, reforming the policy as prayed for, and entered judgment against the insurance company in the amount of $2,700, together with interest from September 1, 1931, and the costs of the action. It appears that both sides were dissatisfied with the finding and decree of the lower court, and both have appealed. The insurance company, having perfected its appeal first, is designated as the appellant.

We will consider first the appeal of the insurance company, the appellant in this court.

[1][2][3] The first and important question in this case to decide is whether or not Tyrrell was a soliciting or a recording agent. It is the contention of the appellant that Tyrrell was only a soliciting agent, and, while they cite many errors, most of them rest upon the question of whether or not Tyrrell was a soliciting or a recording agent.

We are impressed with the words of the late Justice Weaver in the case of Johnson v. Farmers' Ins. Co., reported in 184 Iowa, 630, 631, on page 637, 168 N. W. 264, 266: “There is no magic in the mere name ‘soliciting agent,’ ‘recording agent,’ or ‘general agent.’ Our statute provides that every person who shall in any manner, directly, or indirectly, transact business for any insurance company is the agent of such company. * * * The scope and extent of his authority is shown, not merely by reference to his title or to his written commission or credentials, but by the business which he is permitted to do and perform, and does do and perform in the company's name, or by its apparent acquiescence and consent. His act in that be-half is the company's act and his neglect with...