Hollywood Lumber & Coal Co. v. Dubuque Fire & Marine Ins. Co.
| Decision Date | 22 May 1917 |
| Docket Number | 3238. |
| Citation | 92 S.E. 858,80 W.Va. 604 |
| Parties | HOLLYWOOD LUMBER & COAL CO. ET AL. v. DUBUQUE FIRE & MARINE INS. CO. |
| Court | West Virginia Supreme Court |
Submitted May 1, 1917.
Syllabus by the Court.
If an agent of an insurance company be authorized by the insured to keep his property covered in a stipulated sum, notice to such agent of the cancellation of a policy is sufficient to authorize him to write or procure for the insured another policy as a substitute for the one cancelled.
Notice of an intention to cancel a policy of insurance as required thereby is for the benefit of the insured and may be waived by him or his authorized agents.
Where the premium on a policy of fire insurance has not been paid return thereof is not a condition precedent to the right to cancel the policy.
Where the agent of an insurance company is also constituted agent of the insured to keep his property insured for a stipulated amount, and notice of cancellation of one of the policies is given him by the insurer, and another policy is procured by the agent as a substitute for the one cancelled, the substituted policy will become effective according to the agreement and the terms of the policy without actual delivery thereof to the insured.
And though such substituted policy may have been procured by an agent unauthorized, his unauthorized act may be subsequently ratified by his principal.
While notice of cancellation to an agent to solicit or procure insurance is not notice to the insured of such cancellation nevertheless if such agent be also authorized by the owner to keep the property insured for a sum certain he is thereby given implied authority to accept notice of the cancellation of a policy written or procured by him, and to write or procure another policy as a substitute for the one cancelled.
And with such authority to keep the property insured for a specified sum, implied authority is thereby conferred to also waive the five days notice of cancellation thereby prescribed, and to substitute another policy therefor effective according to the agreement and the terms of the policy.
Without such authority to waive notice of cancellation the assured may ratify, even after a loss has occurred, the unauthorized act of his agent in accepting such notice.
Error to Circuit Court, Braxton County.
Action by the Hollywood Lumber & Coal Company and others against the Dubuque Fire & Marine Insurance Company. Judgment for plaintiffs, and defendant brings error. Affirmed.
Brannon Stathers & Stathers, of Weston, for plaintiff in error.
Young & McWhorter, of Buckhannon, for defendants in error.
In an action upon a policy of fire insurance, all matters of law and fact were, by agreement, submitted to the court in lieu of a jury. The court found for plaintiffs, and pronounced the judgment complained of. The present writ of error to review that judgment was awarded upon the petition of the defendant company.
Besides the general plea prescribed by statute, and the general plea of non assumpsit, defendant proposed, by two special pleas tendered, to otherwise put in issue the validity of the policy sued upon. The substance of these pleas is that plaintiffs had not at or prior to the time of loss procured the policy to be written; nor had it then been delivered to or accepted by them or either of them; but that at the time of the loss the policy of the St. Paul Fire & Marine Insurance Company, notice to cancel which had been given its agents, was still in force, and that the policy of defendant sued on, intended as a substitute therefor, had not been received or accepted by plaintiffs, and was not then in force.
The rejection of these pleas is the first point of error relied upon. We do not think the facts averred therein conclusive of the rights of the parties. Moreover, defendant was given the full benefit of the matters alleged in these pleas, by evidence thereof admitted on the trial, and could not have been prejudiced by the ruling of the court in rejecting them.
The facts are not controverted. Briefly, they are these: The firm of Edwards & Edwards, were general insurance agents, at Weston, West Virginia. They represented a number of insurance companies, including defendant and the St. Paul company. In May, 1912, they solicited plaintiffs, and by agreement wrote insurance as follows: $12,000.00 on a saw mill, and property attached to or operated in connection therewith; $20,000.00 on lumber and $5,000.00 on the commissary, distributing the amounts among several companies, including the St. Paul company. This insurance was renewed in the same companies when it expired in 1913, but the St. Paul company, early in July, following gave notice to Edwards & Edwards to cancel its policy. This policy contained the usual provisions requiring five days notice to the insured of such cancellation, which, in this instance, was not given by the agents directly to the insured.
At the time of writing the original insurance, plaintiffs had a distinct agreement with Edwards & Edwards, agents, to keep the mill property insured, to the amount of $12,000.00, leaving it to them to select the companies and the amounts of insurance to be written in each company; and on receipt of the notice from the St. Paul company, in July, 1913, to cancel their policy, these agents obtained special permission from Alfred Paull & Sons, state agents, at Wheeling, to substitute a policy in the defendant company, for that of the St. Paul company, covering the same property, and for the same amount, to be effective immediately, and accordingly the policy sued on, of July 8, 1913, effective from twelve o'clock noon of that day, to twelve o'clock noon, of July 8, 1914, was immediately written, and mailed the same day by Edwards & Edwards, agents, to the assured at Palmer, West Virginia, with a letter requesting that the St. Paul policy be returned to them for cancellation.
The fire destroying the property occurred at 12:15 the same night, before the policy was received by the assured out of the post office the following day. An attempt was made to return the St. Paul policy to these agents for cancellation, but by mistake a policy in another company was returned instead, but the St. Paul policy was on the same day delivered to Edwards & Edwards personally, and the policy sent by mistake returned to plaintiffs. The St. Paul policy was then stamped "Cancelled" by the agents as of the 8th day of July, 1913, the day on which the policy in the defendant company was written as a substitute.
The policy of the St. Paul company, as does the policy sued on, contains the general provision that the premium having been actually paid, the unearned portion shall be returned on surrender of the policy or last renewal. The premium on the St. Paul policy had not been actually paid, but charged by the agents to the account of the assured, and on return of the policy the unearned portion of the premium was credited back to plaintiffs. Plaintiffs not being fully advised of their rights, gave notice of the loss to both companies, and filed proofs of loss with each of them, and each denying its liability, action was brought against both, with the result in the case against the Dubuque company already stated.
On the merits, the first point of error is, that inasmuch as the policy of the defendant company was agreed upon as a substitute for the policy of the St. Paul company, and notice of the cancellation of the latter, and return of the premium thereon, had not at the time of the fire been received by the assured, or the policy of the defendant received or accepted by them, its policy was not in force and no right of action ever accrued thereon. But if, as we hold, Edwards & Edwards were agents for the assured to keep their property covered to the amount stipulated, notice to them of the cancellation was sufficient, at least to authorize them to substitute another policy for the one cancelled. So that so far as the proposition involves the question of notice, it and the authorities cited therefor are inapplicable.
Moreover, notice to the insured of an intention to cancel a policy as required thereby is for the benefit of the insured, and may be waived by him. Kelley v. Ætna Insurance Co., 75 W.Va. 637, 84 S.E. 502; Warren v. Franklin Fire Ins. Co., 161 Iowa 440, 143 N.W. 554; Rosen v. German Alliance Ins. Co., 106 Me. 229, 76 A. 688; Finley v. Western Empire Ins. Co., 69 Wash. 673, 125 P. 1012.
On the second branch of the proposition, failure to...
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