Globe & Rutgers Fire Ins. Co. of New York v. Eureka Sawmill Co.

• Citation: 227 Ala. 667,151 So. 827
• Decision Date: 21 December 1933
• Docket Number: 1 Div. 768.
• Court: Supreme Court of Alabama
• Parties: GLOBE & RUTGERS FIRE INS. CO. OF NEW YORK v. EUREKA SAWMILL CO.

151 So. 827

227 Ala. 667

GLOBE & RUTGERS FIRE INS. CO. OF NEW YORK v. EUREKA SAWMILL CO.

1 Div. 768.

Supreme Court of Alabama

December 21, 1933

Rehearing Denied Jan. 18, 1934.

Appeal from Circuit Court, Mobile County; Joel W. Goldsby, Judge.

Action for damages by the Eureka Sawmill Company against the Globe &amp Rutgers Fire Insurance Company of New York. From a judgment for plaintiff, defendant appeals.

Reversed and remanded.

Coleman Spain, Stewart & Davies, of Birmingham, for appellant.

Robt. H. Smith, of Mobile, for appellee.

KNIGHT Justice.

The appeal in this case is prosecuted by the defendant, appellant here, from a judgment of the circuit court, awarding the plaintiff, appellee, damages in the matter of the destruction, by fire, of certain of plaintiff's property. It is the contention of the plaintiff that on the 21st day of September, 1931, it entered into a valid and enforceable oral contract of insurance with the defendant, the latter acting through its general agents, whereby the defendant insured, or contracted to insure, the plaintiff against loss by fire, of certain designated property, the insurance to be effective from noon September 30, 1931. The particular provision of the contract in this respect is alleged in the complaint to be "And it was further orally agreed between said plaintiff and the said B. F. Adams and Company, as the general agents for the defendant, that the policy of insurance of the National Fire and Marine Insurance Company of New Jersey would be void at the expiration of said policy No. 4,750,307, of defendant because of the failure to carry at least ten thousand dollars of insurance with the Globe and Rutgers Fire Insurance Company of New York, and that the said B. F. Adams and Company, as general agents for the defendant, would bind defendant for the same amount of insurance as was then covered by said policy of National Fire and Marine Insurance Company of New Jersey, which was $4,698.79, until the said National Fire and Marine Insurance Company should decide whether it would take the risk, and that the said agents, as the agents for defendant, would do whatever was necessary to protect by insurance the property so to be insured, by insurance to the extent of the policy of the National Fire and Marine Insurance Company, until the National Fire and Marine Insurance Company should decide whether it would insure the property for said amount, and if the National Fire and Marine Insurance Company did not accept said insurance, then a policy would be issued by defendant for said amount, but that the defendant would be bound in the meantime for said insurance. * * *"

The complaint in each count contained the averment that certain designated portions of the insured property were destroyed, and other parts damaged, by fire on the after noon of September 30, 1931.

In the second count of the complaint (there being no count 1) the defendant's breach of the contract is averred in the following terms: "Defendant failed and refused to pay plaintiff any money for the loss and damage by fire of its properties so injured and destroyed, to its damages aforesaid."

The fifth count of the complaint, as last amended, alleges the defendant's breach in the following language: "And plaintiff further alleges that defendant failed to bind the defendant to insure the property of plaintiff described in items one to nine, both inclusive, as described in the policy of insurance, a copy of which is hereto attached marked exhibit 'A,' for the amount of insurance that was covered by said policy of National Fire and Marine Insurance Company of New Jersey, to its damages aforesaid." The fourth court, as last amended, avers the breach by defendant of the contract in the following words: "And plaintiff further alleges that the defendant failed to do those things that were necessary to protect by insurance the property of the plaintiff described in items one to nine, both inclusive, as described in the policy of insurance, a copy of which is hereto attached and marked as exhibit 'A,' to the extent of the policy of the National Fire and Marine Insurance Company until the National Fire and Marine Insurance Company should decide whether it would insure said property for said sum of $4,698.79."

To the complaint and its several counts, separately and severally, the defendant demurred, assigning thereto one hundred and sixty-two separate grounds, covering eight pages of the transcript.

One ground of demurrer interposed, we think, was well taken to each count of the complaint, as we shall hereafter in this opinion undertake to demonstrate.

In this state it has long been recognized that a verbal contract of insurance, as well as a verbal contract to insure, can be made, and will be enforced, when and if all the terms of the contract are agreed upon. This right existed at common law and has not been changed by statute. The rate of premium, duration of the policy, nature of the risk, the property, and location of the same, as well as the amount of insurance must be agreed upon. When the minds of the contracting parties reach such an agreement, a valid contract of insurance has been made and may be enforced. Mobile Marine Dock & Mutual Ins. Co. v. McMillan & Son, 31 Ala. 711; Liverpool & London & Globe Ins., Ltd., v. McCree, 210 Ala. 559, 98 So. 880; Cherokee Life Ins. Co. v. Brannum, 203 Ala. 145, 82 So. 175; Royal Exch. Assur. of London v. Almon, 202 Ala. 374, 376, 80 So. 456; Insurance Co. of North America v. Williams, 200 Ala. 681, 687, 688, 77 So. 159; Sun Ins. Office of London v. Mitchell, 186 Ala. 420, 65 So. 143; Hartford Fire Ins. Co. v. King, 106 Ala. 519, 17 So. 707; Home Ins. Co. v. Adler, 77 Ala. 242; Id., 71 Ala. 516; Alabama Gold Life Ins. Co. v. Mayes, 61 Ala. 163; Commercial Fire Ins. Co. v. Morris & Co., 105 Ala. 498, 506, 18 So. 34, 36; 26 C.J. 43; 14 R. C. L. page 879.

And in the case of Commercial Fire Ins. Co. v. Morris, 105 Ala. 506, 18 So. 34, it was held that, where there existed a contract of insurance, not then expired, and there is an agreement between the parties to renew the policy, and no change is suggested or agreed upon, it will be implied that the renewal contract included and adopts all the provisions of the existing contract of insurance. That such a contract is complete in all respects, and upon the failure to comply with the agreement, the party offending may be compelled, by bill in equity, specifically to perform the agreement, or held liable in a court of law for damages, resulting from a breach of the agreement. This holding is abundantly supported by the authorities.

In the case of Home Ins. Co. v. Adler, 71 Ala. 516, Judge Stone, in discussing the facts of that case, which were relied upon by the plaintiff to show that there was a valid verbal agreement of insurance, observed: "The conversation alleged to have taken place between Adler [the insured] and Kayser [who was the agent], about October 20, 1878, would not, unaided, amount to a valid contract of insurance, or agreement to insure. It wanted very many essential details. There was no mention of the place or house in which the goods were to be insured, of the rate of premium, or where to be paid, or of the duration of the policy, or of many other stipulations and details found in such policies. Looking alone to that conversation, we can not affirm all the terms necessary to consummate such contract were agreed upon. But the parties had had previous dealings in relation to a subject-matter identical in principle. Those dealings showed in what place and house the merchandise was kept, which was covered by the former policies, the rate of premium paid, or to be paid, the length of time-one year-the policy would run, and the many specifications and details embodied in the policies. They also tended to show that in prior dealings between these parties, pre-payment of premium had not been exacted. Proof of these previous dealings would authorize the inference that when Adler requested insurance, and Kayser agreed to issue the policy early in November, all the previous terms were impliedly understood and adopted, except to the extent they expressed and agreed otherwise. The former policies were clearly admissible in evidence. Harkins v. Pope, 10 Ala. 493; Crommelin v. Thiess, 31 Ala. 412, 70 Am. Dec. 499; Rainey v. Capps, 22 Ala. 288; Wolffe v. Wolff, 69 Ala. 549, 44 Am. Rep. 526." (Italics supplied.)

The fact must not be lost sight of that, in making the above observation, the learned justice was dealing exclusively with the evidence in the case, and not with the pleadings.

One objection raised by the demurrer against the sufficiency of each of the counts is that it is not averred that the contract for the insurance was supported by a consideration paid, or agreed to be paid by the insured. Confessedly, if there was a contract of insurance made between the parties, as the plaintiff alleges, to become effective at noon on September 30, 1931, that contract rested wholly in parol. There was no written memorial of the agreement. None of the counts averred, in terms, that the contract, whereby the defendant bound itself to pay any loss that might result, was supported by a consideration paid, or to be paid. If there was, in fact, any agreement or obligation on the part of the plaintiff to pay for the interim insurance, it rested wholly in inference.

Section 7662 of the Code provides: "Every written contract, the foundation of the suit, purporting to be executed by ...