Home Ins. Co. of N.Y. v. S. Motor Coach Corp.

• Decision Date: 12 February 1935
• Docket Number: Case Number: 23777
• Citation: 41 P.2d 870,1935 OK 137,171 Okla. 94
• Parties: HOME INSURANCE CO. OF NEW YORK v. SOUTHERN MOTOR COACH CORP.
• Court: Oklahoma Supreme Court

1935 OK 137

41 P.2d 870

171 Okla. 94

HOME INSURANCE CO. OF NEW YORK v. SOUTHERN MOTOR COACH CORP.

Case Number: 23777

Supreme Court of Oklahoma

Decided: February 12, 1935

Syllabus

¶0 1. Insurance - Statute Held not to Preclude Insurance Agent From Acting as Agent for Insured.

Section 6723, C. O. S. 1921 (sec. 10514, O. S. 1931), providing that any person who shall solicit and procure an application for insurance, in all matters relating to such application and the policy issued in consequence thereof, shall be regarded as the agent of the insurer and not the insured, does not preclude such person from acting as the agent of insured in certain particulars, and in a proper case.

2. Same - General Rule Rendering Contracts Voidable on Account of Dual Agency.

The general rule that one cannot serve two masters, and which renders contracts voidable upon the grounds of public policy when same are attempted to be effectuated by one acting as agent for both the contracting principals, applies only in cases where such agent has some direct pecuniary interest in the subject-matter of the contract, or where the agent occupies some fiduciary relationship which would strongly induce an improper motive for the action taken.

3. Appeal and Error - Harmless Error - Statutory Provision.

No judgment shall be set aside or new trial granted by any appellate court of this state in any case, civil or criminal, on the ground of misdirection of the jury or the improper admission or rejection of evidence, or as to error in any matter of pleading or procedure, unless, in the opinion of the court to which application is made, after an examination of the entire record, it appears that the error complained of has probably resulted in a miscarriage of justice, or constitutes a substantial violation of a constitutional or statutory right.

4. Insurance - Action on Fire Policy - Contract Held Valid and Judgment for Plaintiff Sustained.

Record examined, and held, under the facts here, the contract of insurance is valid and that no reversible error appears in the rulings of the court in any matter of pleading or procedure.

Appeal from District Court, Pontotoc County; Orel Busby, Judge.

Action by the Southern Motor Coach Corporation against the Home Insurance Company of New York. Judgment for plaintiff, and defendant appeals. Affirmed.

Rittenhouse, Webster & Rittenhouse, for plaintiff in error.

L.H. Harrell, Denver N. Davison, A.M. Kerr, and Dennis H. Petty, for defendant in error.

WELCH, J.

¶1 This is an appeal from the district court of Pontotoc county. Plaintiff in error, the Home Insurance Company, a corporation, was defendant in the trial court, and the defendant in error, Southern Motor Coach Corporation, was plaintiff. The parties will be referred to as they appeared in the trial court.

¶2 Plaintiff brought suit to recover upon a fire insurance policy for a fire loss on one of its motor busses.

¶3 The Ebey-McCauley Company, of Ada, was a policy writing agent for the defendant, and for various other fire insurance companies. Mr. Ebey of that firm handled the transactions material here.

¶4 The plaintiff operated a fleet of busses for the transportation of passengers, having one of its terminals at Ada, where the business affairs of the corporation were principally handled. One W.W. Walden was president and active manager.

¶5 For some months prior to the fire loss Ebey had been actively soliciting the fire insurance business of the plaintiff corporation. He contacted Mr. Walden on numerous occasions, offering his services and advice to plaintiff regarding its insurance matters, and its insurance policies, which prior to that time had been procured through agencies at other points. Mr. Ebey at his own suggestion checked those policies and volunteered, without charge, to procure needed corrections in some of them, and to obtain certain refunds of unearned premiums on some of plaintiff's policies which had been canceled. Some correspondence was necessary in these matters, which at Ebey's suggestion was conducted by him, but in the name of the plaintiff company upon its own stationery. The correspondence was so handled to avoid any ill feeling that might attend the use of the name of the Ebey-McCauley Company in dealing with other insurance agents. The testimony clearly discloses that as these various services were performed by Ebey, Walden came to rely to some extent upon Ebey's advice and assistance in his insurance matters, and from time to time and as various policies expired or were canceled, Walden procured new policies to be written through Mr. Ebey until at the time this loss occurred the Ebey-McCauley agency carried a great deal, if not the bulk or all, of plaintiff's insurance. In fact, Mr. Walden and Mr. Ebey both testified that at such a time Mr. Walden was relying upon Mr. Ebey to keep plaintiff's various properties properly insured, and he had been authorized by Walden to accept cancellation of policies.

¶6 As policies were written the plaintiff corporation would be charged for the premium on the books of Ebey's firm, and from time to time the plaintiff corporation would be furnished a statement and would remit accordingly. Ebey remitted to his several companies for the premiums collected on policies issued through the agency, less commissions retained by him, at fixed dates in the usual and customary manner, and as instructed by his companies.

¶7 On October 27, 1930, Ebey received a letter from another insurance company, which he also represented, notifying him of the cancellation of certain policies which Ebey had written covering properties belonging to the plaintiff corporation. The property here involved was covered by one of such policies. On October 28, 1930, Ebey advised his secretary that such policies were being canceled and that they would give the risk to, or rewrite the insurance with, or in the defendant insurance company. At that time he made a pencil note on the bottom of the notice of cancellation to rewrite the policies with the defendant insurance company, and gave this to his secretary with instructions to prepare the policies. Several policies were involved, and the secretary completed the writing of a number of these policies, among them being the one upon which suit is brought, but not having completed all of the policies involved on that day, she left all of them on her desk for final completion the following day. None of the policies were signed by Ebey-McCauley Company.

¶8 About midnight of that same night, October 28, 1930, the property here involved, and which was included in one of the policies written by the secretary, but not yet signed by Mr. Ebey, was damaged or destroyed by fire. Nothing further was done toward completing and signing the policies, but they were preserved as left on the afternoon of October 28th.

¶9 Upon trial in the district court, plaintiff recovered judgment for $1,101.30, and defendant has appealed.

¶10 One of the propositions which the defendant urges for reversal is that the alleged contract of insurance is wholly void and unenforceable for the reason that at the time the policy was issued, or attempted to be issued, Ebey was acting or attempting to act, both as the agent of the insurance company and of the Southern Motor Coach Corporation, without the knowledge or acquiesence of the defendant insurance company.

¶11 Our examination of the authorities cited by the parties, and of additional authorities, leads us to the conclusion that the facts disclosed by this record fail to bring this case within the rule which the defendant contends should be applied. It is conceded by the parties that Ebey was fully authorized by the plaintiff to accept cancellation of policies in its behalf, and to write and issue such policies of insurance as would be necessary from time to time to carry out plaintiffs' plan to keep its properties properly insured at all times. It therefore follows that Ebey was to some extent the agent for both the plaintiff and the defendant, in so far at least as the performance of certain acts was concerned. Fraud is not suggested nor alleged nor proven in this case. The defendant relies upon the general rule relating to dual agency, which in some cases renders the contract sought to be created voidable at the option of either of the parties as a matter of law and upon grounds of public policy.

¶12 That rule is based upon the theory that the same agent may not act for two principals in a transaction when their interests are in conflict one with the other, unless there is knowledge or consent thereto by the principals.

¶13 That general rule is noticed in Holy Writ, see Luke xvi, 13; and has been recognized by court decisions and text-writers; see Great American Insurance Co. v. Farmers Warehouse Co., 91 Okla. 118, 217 P. 208; 32 C. J. 1055, section 130; 21 R. C. L. 827, par. 11; Evans v. Brown, 33 Okla. 323, 125 P. 469; Aetna Ins. Co. v. Richey (Tex.) 206 S.W. 383; Muncey et ux. v. Security Insurance Co. (Idaho) 252 P. 870; Weatherholt v. National Liberty Ins. Co. (Ky.) 265 S.W. 311; Mamis v. Pruden (Ga.) 88 S.E. 967; Rockford Insurance Co. v. Winfield (Kan.) 47 P. 511; Arispe Mercantile Co. v. Queen Insurance Co. (Iowa) 120 N.W. 122; Empire State Insurance Co. v. American Central Insurance Co., 138 N.Y. 446, 34 N.E. 200; British American Assurance Co. v. Cooper (Colo.) 40 P. 147; Spare v. Home Mutual Ins. Co., 19 F. 14; Zimmermann v. Dwelling House Ins. Co. (Mich.) 68 N.W. 215; vol. 1, May on Insurance (4th Ed.), section 125; Greenwood Ice & Coal Co. v. Georgia Home Ins. Co. (Miss.) 17 So. 83; Salene v. Queen City Fire Insurance Co. (Ore.) 116 P. 1114.

¶14 It is to be observed from the authorities that the rule is only applied in cases where the facts disclose adverse interests, or where the facts are such as to require a presumption of law that the adverse interest does exist.

¶15 That a person may act in the capacity of agent for both parties where there is no...