Hawes v. Am. Cent. Ins. Co.

• Decision Date: 11 June 1928
• Docket Number: No. 15944.,15944.
• Citation: 7 S.W.2d 479
• Court: Missouri Court of Appeals
• Parties: HOWARD H. HAWES, RESPONDENT, v. AMERICAN CENTRAL INSURANCE COMPANY, APPELLANT.<SMALL><SUP>*</SUP></SMALL>

7 S.W.2d 479

HOWARD H. HAWES, RESPONDENT, v. AMERICAN CENTRAL INSURANCE COMPANY, APPELLANT.^*

No. 15944.

Kansas City Court of Appeals. Missouri.

June 11, 1928.

Appeal from the Circuit Court of Buchanan County. — Hon. Sam Wilcox, Judge.

REVERSED AND REMANDED.

M.A. Fyke and Davis & Ashby for appellant.

John H. Taylor, John S. Boyer and C.C. Crow for respondent.

FRANK, C.

This is an action on an oral contract of fire insurance. There was a verdict and judgment in favor of plaintiff in the sum of $3820 which included an attorney's fee of $400, and defendant has appealed. The petition alleges in part that on April 11, 1924, defendant through its agent, W.R. Stepp, of Livingston county, who had authority to make contracts of insurance and to issue and countersign such contracts for and in behalf of the defendant, orally agreed with plaintiff, for and in consideration of $130.60 premium paid by plaintiff to defendant, to insure and did insure, plaintiff in the sum of $3265 against damage by fire for a period of five years, commencing on the 11th day of April, 1924, and ending on the 11th day of April, 1929.

The facts show that defendant is a domestic fire insurance company with the principal office in the city of St. Louis; that some time prior to March 1, 1924, one William E. Myers was the owner of a small farm near the city of Chillicothe which had upon it a house and barn. Through his agent, one W.R. Stepp, who was in the real estate and insurance business at Chillicothe, Myers negotiated a contract for the sale of the property to plaintiff. During the negotiations for the sale, it was discovered that Myers' fire insurance on the property was about to expire and Stepp solicited him to have it renewed in the defendant company for which Stepp was agent. An application was signed by Myers, and the defendant, at its head office in St. Louis, issued a policy of fire insurance upon the house and barn on the premises, dated March 1, 1924, and expiring March 1, 1929. Myers did not pay the first year's premium of $22 for the reason that it was understood between him, plaintiff and Stepp that plaintiff was to have the insurance when the contract of sale was consummated. The contract of sale was entered into on March 1, 1924, to be consummated on March 15, of that year. A warranty deed to the property was delivered by Myers to plaintiff on March 14, 1924.

On April 11, 1924, Myers and plaintiff went to Stepp's office. Plaintiff testified that at this time they asked Stepp to have the insurance policy transferred from Myers to plaintiff; that the policy was in Stepp's possession and that plaintiff at no time saw it. Stepp told plaintiff that the latter should have insurance upon his household goods, the Myers policy insuring only the house and barn, the house being insured in the sum of $2000 and the barn in the sum of $200. Plaintiff further testified that he acquiesced in this suggestion and Stepp stated that instead of transferring the Myers policy to him he would send it back and have a new policy issued covering all things, having it all in one policy, and that Stepp told him that he "could rest assured that the insurance would be in effect from that day on." The insurance on the household goods was to be for $1000. Plaintiff testified that he did not ask Stepp for a policy on that day but that he expected to get one. He was asked if he did not know that Stepp had no power to issue a policy and he replied, "I had no way of knowing what his power was."

Plaintiff testified that at this interview on April 11th he paid Stepp $22, which was the premium for the first year on the Myers policy; that the whole premium for plaintiff's insurance was to be $32.75 for the first year and that the difference between that sum and the $22 represented the additional amount necessary to insure the household goods. At the time of the conversation in question, Stepp executed a written receipt to plaintiff as follows:

                         "Bazel J. Meek Land Company
                               "Chillicothe Mo. April 11, 1924
                  "H.H. Hawes to American Central Ins. Co. Dr
                "Insurance Premium for 1 yr. ............. $32.75
                "by payment ..............................  22.00
                                                           ______
                                                           $10.75
                                          "W.R. STEPP, Agt
                                                    "4-11-24."
                

Plaintiff testified that he was a little short of money that day and agreed to pay the $10.75 some day in the future when it would be convenient for him to do so. Plaintiff moved upon the premises in question on April 4th and on April 12th Stepp came to plaintiff's residence and procured from him a note in the sum of $128, payable in four annual installments. This note represented the balance of the premium upon the alleged contract of insurance with plaintiff.

On cross-examination plaintiff testified that the time the new insurance was agreed upon with Stepp on April 11th, he did not think the latter said anything about canceling the policy but said it would be better to have it all in one policy. "Q. Get you a policy, that is the way you understood it? A. Yes;" that Stepp did not tell him that an application would have to be sent into the St. Louis office of the company; that he did not know that such an application would have to be sent but that Stepp said something about the company's office in St. Louis and talked about sending the premium note to the company: that he did not ask Stepp to issue a policy then and there but Stepp told him that his "insurance was in force from that day;" that the policy was never transferred to him and that he never received any policy.

Stepp's version of the transaction with plaintiff on April 11th is as follows: That it had been understood that the policy was to be transferred to plaintiff when he obtained title to the Myers property and that plaintiff came into his office on April 11, 1924, and paid him $22, representing the first annual premium on the Myers policy, and then asked him to write an additional $1000 on the household goods and insurance on some other items consisting of live stock; that he told plaintiff that —

"... since this original policy had only been in effect such a short time that I would send what is known as the Myers policy in and have it rewritten in his name including the additional amounts that he wanted, which I did."

Stepp further testified that he did not remember whether he told plaintiff that his policy would take effect before it was sent in to St. Louis; that he did not remember whether he told plaintiff "about sending it to St. Louis for the policy;" that he understood that plaintiff was wanting to insure his property but that he did not issue a policy at that time because that was not "my custom, not my manner of handling insurance;" that he never himself issued a policy for this defendant; that the services he performed for the defendant were soliciting business and sending in applications for policies to be issued by the St. Louis office; that the policies would be returned to him and he would countersign and deliver them; that before they were countersigned by him they were signed by the president and Bray who was the manager at St. Louis of the Farm Special Service Department of the defendant. The court over the objection of defendant, refused to permit the witness to state whether he had at any time made an oral contract of insurance for the defendant.

Stepp testified that the $22 paid by plaintiff to him was on the Myers policy in accordance with the agreement had with Myers and plaintiff that the latter was to pay the premium in case the contract of sale for the place was consummated; that he made no attempt to transfer the Myers policy to plaintiff but sent it to defendant to have it make the transfer; that he told plaintiff that he was "going to send it out and have a new policy issued ... to Mr. Hawes in lieu of this policy ... and that was what I tried to do." He testified that he did not remember whether he told plaintiff that he "could rest assured that he was insured from that day on;" that he always thought he had insured plaintiff, that the insurance was effective from the 11th day of April, 1924, and that it was a good risk.

It appears that after the conversation above detailed, Stepp, without plaintiff's knowledge, made a notation on the Myers policy, which was in his possession, showing what plaintiff's policy should be, leaving the $2000 on the house and $200 on the barn and inserting the name of H.H. Hawes in the place of W.E. Myers and the figures "75" after item two, which insured one cow, and the figures "$1000" after item ten, insuring household and kitchen furniture. Stepp testified that he made the notations on the Myers policy in order to show what plaintiff stated he wanted in the way of insurance; that he mailed the policy with these notations upon it to a Mr. Crist, defendant's special agent at Huntsville, with information as to what was wanted in the way of a new policy for plaintiff, inclosing in the letter plaintiff's premium note in the sum of $128. It seems that Crist was out of town at the time Stepp's letter arrived and he did not send the policy and the premium note to the defendant at its head office in St. Louis until April 26th. Defendant's witness Bray testified that the policy and note were received by the defendant at St. Louis on April 28th and on that day defendant returned the premium note to plaintiff in a letter which informed him that the policy would be issued on farm property only upon a signed application of the plaintiff. On April 27, 1924, the dwelling house and household furniture were totally destroyed by fire. Defendant's officer in St. Louis who had such matters in charge did not know at the time this letter was written to plaintiff that the property in question had been destroyed. The first information defendant had of the fire was when Stepp, on April 28...