Home Ins. Co., N.Y. v. Fidelity-Phenix Fire Ins. Co.
| Decision Date | 03 May 1938 |
| Docket Number | 44215. |
| Citation | 279 N.W. 425,225 Iowa 36 |
| Parties | HOME INS. CO., N.Y., v. FIDELITY-PHENIX FIRE INS. CO. |
| Court | Iowa Supreme Court |
Appeal from District Court, Monona County; R. H. Munger, Judge.
Action by plaintiff, as assignee of claim for loss under a fire insurance policy, against the defendant, insurer, under such policy. The opinion states the facts. The case was tried to the court without a jury, and, from a judgment in favor of the plaintiff, the defendant appeals.
Affirmed.
Schuyler & Hennessy and Paul H. Heineke, all of Chicago Ill., and A. R. Strong, of Sioux City, for appellant.
Oliver P. Bennett, of Mapleton, and Prichard & Prichard, of Onawa for appellee.
All the evidence in this case is found in an agreed statement of facts, and the facts material for our consideration on this appeal are substantially as follows:
Both the plaintiff and the defendant are New York corporations and wrote fire insurance in the state of Iowa. W. B. Whiting conducted an insurance agency at Whiting in Monona county Iowa, known as the Whiting Agency, which acted as a soliciting agent for both plaintiff and defendant. The insurance business of this agency was in charge of one R. C. Croker. In January, 1933, through the Whiting Agency, the plaintiff and the defendant each wrote a policy of fire insurance on property belonging to Clyde N. Whiting, who was a cousin of W. B. Whiting. Each of these policies covered the period from January 1, 1933, to January 1, 1938, and in each of these policies the total coverage was $8,075 distributed over different items of property therein enumerated, with identical amounts as to each item. The only items involved in this case are the dwelling, household and kitchen furniture, and certain tools. Each policy carried $3,750 on the dwelling, $1,000 on household and kitchen furniture, and $100 on mowers and other machinery and tools, thus making a total of $7,500 on the dwelling, $2,000 on household and kitchen furniture, and $200 on mowers and other machinery and tools.
On February 17, 1934, S. J. Mak, a special agent of the farm department of the defendant, Fidelity-Phenix Fire Insurance Company, wrote the Whiting Agency that his company desired to be relieved from liability in the farm department, and asked the agency to " take up our policies for pro rata cancellation at once or we will be willing to give you until March 15th to rewrite your business in another company." The letter also contained the statement that the Great American Fire Insurance Company would be willing to take over the liability of the defendant company by rewriting the insurance, " but if you would prefer to have us cancel this business by registered mail, we will do so." Shortly after the receipt of this letter, Croker talked to Clyde N. Whiting and advised him of the request of the defendant company. About March 1, 1934, a Mr. Fields, who was a representative of the plaintiff insurance company, had a conversation with Croker and Clyde N. Whiting at the Whiting Agency. In this conversation Croker told Fields that the defendant company had directed the Whiting Agency to terminate all its liability on farm policies written through this agency by the 15th of March, 1934. Whiting said that he was anxious to get all his insurance in one company, and would prefer to have it in the plaintiff company. Fields replied that he would approve increasing the insurance so that all of the insurance carried by Whiting would be in the plaintiff company under one policy, but that he did not care to recommend that his company carry $7,500 insurance on the dwelling, and suggested that, as one Rathbun, who was assistant manager of the farm department of the plaintiff company, with office in Chicago, had charge of the farm business written in Iowa, had formerly traveled in Iowa, and was acquainted with the Whiting home, Whiting should write to Rathbun about the amount of insurance on the dwelling. On March 1, 1934, Whiting wrote Rathbun and told him that Fields wanted to cut the insurance on the Whiting home to $6,000, but that he, Whiting, did not consider that quite enough. On March 6, 1934, Rathbun answered Whiting's letter telling him that the plaintiff company had adopted a policy of writing less insurance on farm dwellings than it had formerly written, and that, " if $7,000 would make you feel better, possibly we could grant the same." On March 12th Whiting replied to this letter of Rathbun's, and, after stating that he had seen W. B. (W. B. Whiting, owner of the Whiting Agency) the night before and that W. B. " wanted to fix it at $7500.00 and send it in and I said to wait until I had written to you again and had a reply," he further stated he thought $7,500 little enough on the house, and hoped Rathbun would give him that much. In this letter Whiting further stated: " I only have until the 15th with the Fidelity-Phenix but I have had no letter of any kind from them, so I guess I'll have insurance as long as I don't hear from them." On March 14, 1934, Rathbun wrote Whiting in answer to Whiting's letter of the 12th inst., and said:
The agreed statement of facts states that this letter was written by Rathbun " in his official capacity of Assistant Manager of the Farm Department of the Home Insurance Company, New York," and " that he had authority to bind the company in accordance with the terms of the letter." On March 17, 1934, Clyde N. Whiting took this letter to the Whiting Agency, and the Whiting Agency, through Croker, thereupon wrote a letter to the Chicago office of the defendant, Fidelity-Phenix Fire Insurance Company, which said: " Will you please cancel the above numbered policy by registered mail cancellation as of March 15, 1934."
On the same occasion, the Whiting Agency, through Croker, wrote a letter to the Chicago office of the plaintiff, Home Insurance Company, attention of Mr. Rathbun, which stated that the Whiting Agency had copies of Rathbun's letter to C. N. Whiting " in which you assumed the responsibility for the other half of the insurance on his buildings" and asked, " Will you please issue an endorsement to attach to policy C. I. 57756 doubling the amount of liability under that policy on all items." These last two letters above referred to were received at the respective Chicago offices of the plaintiff company and the defendant company on March 19, 1934. On Sunday, March 18, 1934, about 5:45 p. m., after both letters had been mailed by the Whiting Agency, but before they had been received at the Chicago offices of the plaintiff and defendant companies, respectively, a fire occurred on the Whiting premises resulting in loss and damage to the dwelling, to kitchen furniture, and to tools.
On the following day, March 19, 1934, the Whiting Agency wrote to the defendant company, as follows:
Carbon copies of this letter were also mailed to the plaintiff company and to Clyde N. Whiting. On March 21st the plaintiff company wrote W. B. Whiting of the Whiting Agency acknowledging receipt of the letter containing the information in regard to the fire, and stating: " Our agreement as set forth in letter of March 14th, to Mr. Whiting to increase the insurance on the dwelling to a total of $7500.00 and on the household goods to $2000.00 was made on the understanding that there would be no other insurance and that our additional liability would not attach prior to the cancellation of the Fidelity-Phenix policy."
On March 29, 1934, the defendant company wrote Clyde N. Whiting a letter stating that, under date of March 17th it was advised by the Whiting Agency to cancel the policy on the Clyde Whiting property; that it had ascertained that on or about March 10, 1934, a request had been made to the Home Insurance Company to assume the entire liability which prior to that time had been insured in the Home Insurance Company and Fidelity-Phenix; that it had determined further that on March 14th the Home Insurance Company became bound for the full amount beginning as of March 15, 1934; and that, its liability having terminated as of that date, it inclosed a check for the unearned premium. On April 17, 1934, at the instance and request of the plaintiff company, Clyde N Whiting wrote a letter to the defendant company, inclosing a sworn statement of proof of loss, demanded payment of $4,446.75 as its proportion of the loss, and returned the check which the defendant company had sent to him for the unearned premium. On April 24th the plaintiff company issued a separate policy to Clyde N. Whiting covering the same items and in the same...
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