Hanover Fire Ins. Co. v. Wood

• Decision Date: 08 February 1923
• Docket Number: 6 Div. 417.
• Citation: 209 Ala. 380,96 So. 250
• Parties: HANOVER FIRE INS. CO. v. WOOD.
• Court: Alabama Supreme Court

96 So. 250

209 Ala. 380

HANOVER FIRE INS. CO. v. WOOD.

6 Div. 417.

Supreme Court of Alabama

February 8, 1923

Rehearing Denied May 3, 1923.

Appeal from Circuit Court, Jefferson County; C. B. Smith, Judge.

Action by W. J. Wood against the Hanover Fire Insurance Company. From a judgment for plaintiff, defendant appeals. Reversed and remanded.

A notice that fire policy "is hereby canceled" will be construed as intended to operate according to the terms of the policy at the end of five days, and a complaint that the notice is inoperative because given in praesenti, instead of at the end of five days, is without merit.

The action is on a fire insurance policy by which defendant insured plaintiff's stock of merchandise and store furniture and fixtures for one year for $2,000. It is alleged that the policy was issued on June 27 or 29, 1919, and that the insured property was destroyed by fire on December 5 1919.

Besides the general issue defendant pleaded pleas numbered 2 to 13. Demurrers were sustained to pleas 2, 3, 10, and 11.

Plea 4 sets up want of consideration.

Plea 5 recites the provisions of the policy requiring immediate notice to the insurer of loss; the making of a complete inventory of the damaged and undamaged property, and the amount claimed thereon; and the rendition within 60 days after the fire of a sworn statement of the knowledge and belief of the insured as to the time and origin of the fire and the various other matters customarily required to be thus reported. The plea then recited the provision that no suit can be maintained on the policy until after full compliance with the recited provisions and alleges plaintiff's failure to comply, in that he returned no inventory, made no sworn statement, and filed no proof of loss.

To plea 5 plaintiff replied:

"H. That before the commencement of this suit the defendant company, acting by its duly authorized agents and representatives, who were acting within the line and scope of their employment, after said fire and with knowledge of plaintiff's claim under said policy, denied all liability on the policy sued on upon the ground that the said policy had been canceled before the alleged fire occurred."

"J. That before the commencement of this suit, the duly authorized agents of the defendant company with knowledge or notice of said fire, and plaintiff's loss thereby, denied to plaintiff any and all liability under said policy making it unnecessary for the plaintiff to furnish proof of loss as provided by said policy."

Plea 6 recites the provision:

"This policy shall be canceled at any time at the request of the insured or by the company by giving five days' notice of such cancellation."

And it then alleges that, more than five days before the fire, "this defendant, acting through its local agent, did, on, to wit, November 21, 1919, notify the plaintiff that according to the terms and conditions of the policy sued on said policy is hereby canceled," and that, before said fire occurred, the policy had become canceled, and that, plaintiff not having paid the premium due thereon, there was no unearned premium due to him.

To plea 6 plaintiff replied:

"D. That after the alleged cancellation of said policy, and after the alleged breach of the stipulations in said policy that are pleaded by defendant in bar of this action, and with a full knowledge by the defendant, or its authorized agents acting in the line and scope of their employment, the defendant, or its authorized agents acting in the line and scope of their employment, did receive from the plaintiff the sum of $41.80, the amount of the premium on said policy for one year,"

-thereby estopping itself as to the defense pleaded.

Plea 7 recites the provisions of the policy requiring the assured (1) to take a complete itemized inventory of stock on hand at least once a year, and, if not taken previous to policy, to be taken within 30 days from issuance; (2) to keep a set of books showing clearly all business transacted during life of policy, including purchases, sales, and shipments; and (3) to keep such books and inventory securely locked in an iron fireproof safe at night, and at all times when the building is not open for business, or, failing in this, to keep them "in some place not exposed to a fire which would destroy the aforesaid building." It recites also the provision:

"(4) In the event of failure to produce such set of books and inventories for the inspection of this company, this policy shall become null and void, and such failure shall constitute a perpetual bar to any recovery thereon."

The plea then alleges a failure by defendant to observe the provisions numbered 1, 2, and 3.

To plea 7 were pleaded replications C, D, L, M, and O.

Replication C is:

"That the defendant company, acting by and through its duly authorized agents, who were acting in the line and scope of their employment and authority, with a full knowledge that plaintiff did not have on his premises or in his store an iron safe, and that he had been relieved by defendant's agent, acting in the line and scope of his authority, of the duty to comply with the terms of said policy, pleaded as aforesaid, did receive and accept the sum of, to wit, $41.80, the amount of the premium due on said policy for the term of one year."

Replication D has been heretofore set out.

Replication L sets up a waiver of the provisions of the "iron safe clause" as to the mode of safe-keeping plaintiff's books, made with full knowledge of plaintiff's noncompliance, and with agreement thereto.

Replication M sets up a preagreement with plaintiff by defendant's agents, acting with full knowledge and in the line and scope of their employment-

"that it would not be necessary for him to have an iron safe, and that his papers, inventories and books *** might be kept without said iron safe, and in said insured building, and defendant issued said policy with that understanding."

Replication O is substantially the same as C.

Plea 8 is like plea 7, except it alleges merely that plaintiff did not keep a set of books as required.

Plea 9 is also like plea 7, except it alleges that plaintiff took no inventories of stock within the periods prescribed.

Plea 12 sets up the cancellation provisions shown by plea 6, and alleges:

That more than five days before the fire, and five days prior to November 21, 1919, defendant, through its agent in Birmingham, "notified the plaintiff that the policy here sued on would be canceled; and that on, to wit, November 21, 1919, defendant, through its local agent *** notified the plaintiff that, according to the terms and conditions of the policy sued on, said policy was canceled, and was not a binding obligation on this defendant."

To this plea was interposed replication D, above set out.

Plea 13 is the same as plea 7 down through the provisions numbered 1 to 4, inclusive, and alleges a violation of provisions 3 and 4. To this plea replications C, D, L, M, and O, above shown, were interposed.

Demurrers were sustained as to all other pleas and replications than those above set out, and demurrers were sustained also to defendant's special rejoinders to the replications.

On the foregoing pleadings the case was submitted to the jury, under the instructions of the court, and there was a verdict for plaintiff, and judgment accordingly.

McClellan, J., dissenting. Anderson, C.J., dissenting in part.

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

Allen & McEwen, of Birmingham, for appellee.

SOMERVILLE J.

"Where one is sought to be charged with the act of another, proof of the authority under which the act was done is indispensable; *** and as the evidence must harmonize with the pleading, it should be substantially, yet distinctly, alleged that the act was the principal's, or authorized by him." Childress v. Miller, 4 Ala. 447, 450. So, where the complaint alleges merely that an agent did an act purporting to bind his principal, it is in sufficient as against apt demurrer. It should go further and allege that the agent was duly authorized to act for the principal in that behalf. May v. Kelly, 27 Ala. 497, 502. In that case the complaint alleged that one Bell, the captain and master of a steamboat, and the agent of its owners, as such captain and agent, accepted a draft "for steamship messenger and owners," the suit being against the owner upon the acceptance. The court said:

"Bell may have been the agent of the owner of the steamboat, and the agent of the defendant, and yet have had no authority to accept any bill for the defendant. It was not enough to aver that Bell was the agent of the defendant. It was incumbent on the plaintiffs to know the extent and nature of his authority as agent, or, at all events, to have alleged that his agency embraced or authorized the acceptance of the bill."

On this principle, when it is alleged that the agent did some primary act which he was duly authorized to do, and a secondary and distinct effect is imputed to such act-as, for example, waiver or estoppel with respect to the pleader's previous conduct-it is not sufficient to allege the authority of the agent to do the primary act merely; but either the waiver or estoppel must be charged directly upon the principal, or it must be alleged that the agent was authorized to bind the principal as to such waiver or estoppel.

Plea 6 sets up a cancellation of the policy by the insurer on five days' notice, as authorized by the terms of the policy. Replication D confesses the cancellation, but seeks to avoid its effect by showing that thereafter the insured paid the premium of $41.80, by which, it is implied, the policy was reinstated. The allegation is that-

"with a full knowledge [of the fact of

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