Home Insurance Company v. North Little Rock Ice & Electric Company
| Decision Date | 15 June 1908 |
| Citation | 111 S.W. 994,86 Ark. 538 |
| Parties | HOME INSURANCE COMPANY v. NORTH LITTLE ROCK ICE & ELECTRIC COMPANY |
| Court | Arkansas Supreme Court |
Appeal from Pulaski Circuit Court; Edward W. Winfield, Judge affirmed.
Judgment affirmed.
Rose Hemingway, Cantrell & Loughborough, for appellant.
1. The knowledge of the Faucette Brothers will not be imputed to the appellant, their interests being at variance with those of the principal. Mechem on Agency, § 723; 68 N.W. 215; 47 P. 511; 14 N.Y. 91; 25 P. 331; 72 Miss. 46; 17 So. 83; Id. 282; 19 F. 14; 4 Berryman's Ins. Dig. 1283. See also 87 F. 29; 89 F. 619; 60 Am. Rep. 736; 80 Ill.App 288; 85 Mo.App. 50; 162 Mo. 146; 9 S.W. 182; 22 C. C. A. 378; 52 Id. 126; 83 F. 48; 110 F. 830; 112 Ga. 823; 173 Ill. 414; 98 Ill.App. 399; 62 P. 705.
2. The stipulation that the policy should be void "if the subject of insurance be a manufacturing establishment, and it be operated in whole or in part at night later than ten o'clock, or if it cease to be operated for more than ten consecutive days," is without question valid. 27 N.E. 6; 153 Mass. 475; 1 Marvel (Del.) 32; 29 A. 1039; 112 Cal. 548; 36 Wash. 520; 77 N.W. 648; 82 N.W. 45; 29 N.W. 443; 121 F. 937; 146 F. 695; 90 N.Y. 16; 115 N.Y. 287; 116 N.Y. 322; 109 Mich. 699; 67 N.Y. 283; 118 N.Y. 165.
J. W. Blackwood, for appellee.
1. There are no representations, warranties or statements either in the policy or in the evidence showing that the property insured was a manufacturing establishment. The statement that the building was occupied as an ice factory was no representation nor warranty that it would be operated as such. Moreover, this clause, being one of numerous printed conditions in the policy prepared by the company, is to be construed most strongly against the insurer. The term "occupied" is not synonymous with "operated." 33 L. R. A. 714; Ostrander on Ins. 412, 419. As to what is a manufacturing establishment and whether it has "ceased to be operated" within the meaning of the policy, see 3 MacArthur 412; 18 F. 584; 135 Mass. 262; 23 N.E. 989; 62 S.W. 146; 26 L. R. A. 316; 112 Pa. 149, 159; 28 A. 205; 73 Am. St. Rep. 533; 17 N.E. 771; 40 Am. St. Rep. 68; 8 A. 424; 11 A. 96; 52 Ill. 61; 147 N.Y. 478; 43 Am. Rep. 138; 97 Ga. 44; 52 Ill. 53; 36 Mich. 289.
2. While, as a rule, an agent cannot act in a dual capacity, yet if he is authorized by the insurance company to write the policy, or if he writes it and the company accepts the premiums and ratifies his acts, the company cannot avoid the policy. 76 Ark. 180; 2 Clement's Fire Insurance, (Ed. 1905) Rules 92-96; Ostrander on Ins. 154-159; 31 S.W. 1100; 37 P. 909; 4 N.W. 350; 31 S.W. 1103. Faucette Brothers were fully authorized to take this insurance by the general agent, Meyers, who authorized them to place it with appellant, and both the application and their daily reports notified him as general agent of all the facts. In the light of the facts, it is unreasonable to say that Meyers did not know of the ownership of the property. Appellant is chargeable with notice of the facts. Ostrander on Ins. 171; 43 Mich. 116.
3. The law presumes that the company issuing the policy knows the conditions, uses and title of the property insured. 8 How. (U.S.) 248; 2 Pet. 49; 8 Id. 582; Id. 557; 3 Kent 237; 9 Barn. & Cress. 693; 1 Marsh. on Ins. 450; 10 Pick. 402; 1 Pet. 160; 1 Marshall on Ins. 481, 482; 3 Burr. 1905; 1 Har. & Gill 295; 5 Hill, 192; 6 Cranch, 281; 6 Taunt. 338; 12 La. 134; 18 L. R. A. 139; 46 Mich. 56; 66 Mich. 98; 52 Mich. 131; 53 Mich. 306; 35 Mich. 481; 89 F. 936; 62 N.W. 857.
The Home Fire Insurance Company, of Fordyce, Ark., was sued in the court below by the appellee for the amount of an award made by two appraisers, under an agreement of submission signed by the parties in interest; the Insurance Company after the award refusing to pay the same, it having reserved all rights, except the right to contest the amount of sound value and the loss and damage which the appellee had sustained, in the agreement referred to. It placed its ground of refusal solely upon the ground that the appellee had disregarded the terms of the policies under which its claim originated, which provided that "if the subject of insurance be a manufacturing establishment, and it be operated in whole or in part at night later than ten o'clock, or if it cease to be operated for more than ten consecutive days," the entire policy should be void, unless otherwise provided by agreement indorsed thereon or added thereto. It alleged merely that the appellee was a manufacturing establishment, and that it had ceased, during the life of the policies, to be operated for more than ten consecutive days, without indorsement on the policy or in any paper added thereto of permission so to do, and without notification.
A trial was held, resulting in a verdict and judgment for the appellee for the amount of the award, in addition to the amount of the statutory penalty of twelve per cent., and an attorney's fee was fixed by the court, for which judgment was rendered.
The policies all contained the same description of the risk covered thereby, which was given in five separate clauses, as follows:
At the trial J. P. Faucette testified in behalf of the appellee, and stated that he was its president at the time of the fire and for four or five years before, and at the time the policies were issued; that he was a member of the firm of Faucette Bros., who were the local agents of the Home Insurance Company, at Argenta, Ark., where the risk was located; that his brother, W. C. Faucette, was the other member of that firm; that each of them owned eight thousand dollars of the capital stock of the Ice & Electric Company, the entire capital stock being $ 32,000; that the said Faucette Bros. were also directors of the said Ice & Electric Company, and he was its general manager at the time the policies were issued; that they, said Faucette Bros., issued the policies in suit, as local agents at Argenta, upon forms furnished in blank to them by G. L. Meyers & Company, general agents of the Insurance Company at Memphis, Tenn.; that these policies were renewals of previous ones issued by the said G. L. Meyers & Company in other companies; that the property of appellee had not been operated as an ice factory since October, 1904; that he knew of this fact at the time the policies were issued; that at that time the stables and places for the wagons and the horse and mules and the office were all in the building described in the policy; that a bookkeeper was in charge of the books; that orders were taken there for coal, and ice was delivered there by wagon and by car load, there being a switch connected with the premises; that, at the time of the closing of the manufacturing, the machinery was in good condition, and he had afterwards personally looked after it; that the factory ever since it had been opened in 1896 had operated only for the six months during the hot season, suspending in October; that there was no change in the use of the building after October 15, 1904, and that they were open for business, as usual, on the day the fire occurred.
G. L. Meyers for the appellant testified: that his firm were the general agents of the Insurance Company for Argenta and elsewhere; that they sometimes sent around inspectors to inspect risks, but he could not remember sending any inspector around to examine the risk in question; that his agent had adjusted a loss in the neighborhood; that he had no notice or knowledge at the time the policies in suit were issued up to the time of the fire that the building and machinery insured were not being used and operated as an ice factory; that the Faucette Bros. never communicated the fact to his office that these were not being operated as a factory; that he was familiar with the views and customs of insurance companies as to material parts of policies, and that a manufacturing establishment not in operation was not generally considered a good risk.
The witness Meyers also testified that Faucette Bros. had sent reports of all policies issued to G. L. Meyers & Co., general agents, shortly after issuing the same, and had done so as to the policies in suit, setting forth the location and general description, but, upon objection of the appellee's counsel, he was not permitted to state whether there was anything in the report about the plant not being in operation, upon the ground that the written report was the best evidence. We may say, in passing, that we do not think there was any error in this ruling. Jackson v. Son, 2 Caines Rep. 178.
The appellant asked for a peremptory instruction, and also asked the court to instruct the jury that the insurance here was of a manufacturing establishment, and, if it ceased to be operated as a manufactory without consent for more than ten consecutive days, the policy became void; also that the...
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