Gazzam v. German Union Fire Ins. Co.

• Citation: 71 S.E. 434,155 N.C. 330
• Parties: GAZZAM v. GERMAN UNION FIRE INS. CO.
• Decision Date: 26 May 1911
• Court: United States State Supreme Court of North Carolina

71 S.E. 434

155 N.C. 330

GAZZAM v. GERMAN UNION FIRE INS. CO.

Supreme Court of North Carolina

May 26, 1911

Appeal from Superior Court, Buncombe County; Allen, Judge.

Action by Joseph M. Gazzam against the German Union Fire Insurance Company. From a judgment for plaintiff, defendant appeals. Affirmed.

Stipulations in a fire policy as to the conditions on which it shall have its inception and become operative as a contract may be waived.

This is an action to recover $2,500 on a policy of fire insurance.

The defendant denied that it issued the policy, or that it was issued by its authority. Prior to November 22, 1908, the plaintiff held a fire insurance policy, issued by the Ohio German Fire Company, for $2,500 on the property described in the policy in controversy in this action, and on said day said company became insolvent, and a receiver was appointed to take charge of its assets and business. M. W. Nash was the general agent, and the firm of Alston, Rawls & Co., the local agent of said company.

The plaintiff contends that the firm of W. E. Fowler & Co. was the general agent of the defendant company; that, after the failure of the Ohio German Company, the said Nash, as its general agent, entered into an agreement with the defendant through Fowler & Co., by which he (said Nash) was appointed the general agent of the defendant in this state; that it was a part of this agreement that the defendant would reinsure the outstanding risks of the Ohio German Company; that thereafter the defendant, through said Nash, issued the policy declared on.

The defendant denies that Fowler & Co. or Nash had authority to issue the policy, and contends that under the provision in the policy that, "in the matter relating to this insurance no person, unless duly authorized in writing, shall be deemed the agent of this company," authority to represent the defendant cannot be shown by parol, and, as no written authority has been produced, that the policy is void that the evidence of the plaintiff fails to show any consideration to sustain the policy; that evidence admitted to prove agency was incompetent; and that on the whole evidence judgment of nonsuit should have been entered.

The policy of the defendant was delivered by Nash to Alston Rawls & Co., who sent it to the plaintiff, and he surrendered his policy in the Ohio German Company and his right to the return premium thereon, the amount of which is not stated.

Nash was indebted to Alston, Rawls & Co., and it was agreed between them, without the knowledge of the plaintiff that the return premium should be applied to this indebtedness. The following agreement was made by the parties on the trial "First. It is admitted by the plaintiff that the defendant, the German Union Fire Insurance Company, did not receive, or has ever received, any cash consideration, by check or otherwise, to cover the premium on the policy set out in the complaint and the subject of this action. Second. It is admitted that Kenilworth Inn, and its contents, which is alleged to have been insured by the policy set out in the complaint, and sued on in this action, was totally destroyed by fire as alleged in the complaint, and that the value of said hotel at the time of the fire was $108,101.71, and the value of the furniture and fixtures contained in said hotel at the time of the fire was $34,346.89, as set out in the amended proof of loss which was duly transmitted by plaintiff to the defendant."

P. R. Moale, a witness for the plaintiff, among other things, testified: That he, La Barbe, and Chiles were agents of defendant for 2 or 2 1/2 years, transacting the business of issuing policies. That he reported to Stokman & Co., Fowler & Co., and the defendant. That while reporting to the company, in the due course of business, he received the following letter: (Stamped across letter head) "Dickson & Tweeddale, General Managers. The German Union Fire Insurance Company of Baltimore, 417 E. Baltimore St., Baltimore, Md., January 23, 1909. Messrs. La Barbe, Moale & Chiles, Asheville, N. C.--Dear Sirs: This is to advise you that Wm. E. Fowler & Company have resigned the general agency of the German Union Fire Insurance Company, effective January 2, "'09. You will therefore report all business written since that date to the German Union Fire Insurance Company, 417 E. Baltimore street, and remit to them for such business. And upon all business written prior to January 2, "'09, for which you have not yet paid--you will send your checks in payment of such business to the German Union Fire Insurance Company direct. We would thank you to acknowledge receipt of this letter. [Signed] German Union Fire Insurance Co., R. D. Tweeddale, President, By W. A. Shelton, Secretary." That, after receiving this letter, he sent money and reported direct to the defendant. That, while reporting to Fowler & Co. and in the due course of business, he received by mail the following letter: "Wm. E. Fowler & Company, General Agents. Fire Insurance. 417 E. Baltimore Street, Baltimore, Md., November 30th, 1908--Dear Sir: This is to advise you that as we have appointed Mr. W. M. Nash, Greensboro, N. C., as general agent for North Carolina for the German Union Fire Insurance Company of Baltimore, and beginning December 1st (this month), you will report all of your business to Mr. Nash and when paying for business written during the month of December and the months following, you will remit directly to Mr. Nash. Upon all business written up to December 1st, you will settle with W. E. Fowler & Company, and take credit for all return premiums on policies canceled up to December first on your account current to W. E. Fowler & Company. We trust that this explanation is clear to you and hope that this arrangement meets with your approval. We hope that in appointing Mr. Nash as general agent for this territory that we can get better results for the company, and that it will be more satisfactory to the agent, especially when we consider the fact that Mr. Nash is a N.C. man and living in the state, and that he has made a pronounced success as a general agent, and we sincerely trust, therefore, that this appointment will have your sanction and we will have your hearty co-operation in producing business for the company as heretofore, and we also hope that the very pleasant relations heretofore existing between this office and yours may be continued through the office of Mr. Nash. If there is anything concerning this arrangement that is not entirely clear to you, we would be very glad to have you correspond with us freely, and again thanking you for your business and hoping for a continuance of the same, we are Yours truly, [Signed] Wm. E. Fowler & Co., General Agents." This evidence was objected to by defendant.

Witness stated on cross-examination, without objection, that he was notified in the course of business that Fowler was the general agent of defendant. M. W. Nash, among other things, testified for the plaintiff that the office of Fowler & Co. was situate in the same building with the offices of the defendant; that he was a stockholder of the defendant company and was present at the annual meeting in January, 1909, when Tweeddale was elected president; that he had discussed the agency of Fowler & Co. with Tweeddale several times; that he said the company would cancel its contract with Fowler & Co.; that on November 26, 1908, he went to Baltimore and saw Mr. Fowler; that Fowler appointed him general agent of the defendant for North Carolina and agreed with him to reinsure all the risks of the Ohio German Company in the defendant company; that he afterwards received a letter from Fowler & Co. confirming this, which has been lost; that blank policies were sent him by Fowler & Co., and he issued the policy to the plaintiff and many others; that he wrote 200 or 250 policies in defendant company.

The following are the issues and the answers thereto:

(1) Did the defendant, German Union Fire Insurance Company, or its agent, issue to the plaintiff, Joseph M. Gazzam, the policy of insurance set out in the complaint? Answer: Yes.

(2) Was there any consideration to support said policy or contract of insurance? Answer: Yes.

(3) What amount, if any, is the plaintiff, Joseph M. Gazzam, entitled to recover of the defendant, German Union Fire Insurance Company, on said policy of insurance? Answer: $2,500, with interest from July 25, 1909, until paid.

There was a judgment for the plaintiff, from which the defendant appealed.

Moore & Rollins and Aycock & Winston, for appellant.

Adams & Adams, for appellee.

ALLEN, J. (after stating the facts as above).

The policy declared on is what is known as the "standard policy," and contains the provision approved by the statute that "in the matter relating to this insurance no person, unless duly...