Hurst Home Insurance Company v. Ledford
| Decision Date | 20 January 1925 |
| Citation | 207 Ky. 212 |
| Parties | Hurst Home Insurance Company v. Ledford. |
| Court | United States State Supreme Court — District of Kentucky |
1. Principal and Agent — Principal Bound by Acts of Agent Within Apparent Scope of Authority, where Third Person Ignorant of Limitation. — A principal is bound by acts of agent within apparent scope of authority, though authority may be in fact limited if person dealing with agent is ignorant of limitation upon his authority.
2. Insurance — Insurance Agent Represents Insurrer. — Insurance agent represents company and not insured in taking application.
3. Principal and Agent — Loss by Reason of Acts of Agent Falls on Person Authorizing Acts, Rather than Innocent Third Person. — Where one of two parties must suffer loss through acts of agent, loss should fall on him who authorizes agent to act, rather than on innocent third person, unless agent is acting beyond scope of apparent authority.
4. Insurance — Insurer Held Bound by Agent's Representation as to Additional Insurance, though Provision in Policy to Contrary. — Where insurance agent acting within apparent scope of authority informed insured that he could take out additional fire insurance on house, which insured did, upon action on policy after destruction of house by fire, insurer could not set up provision in policy rendering it void if insured took out additional insurance.
Appeal from Bath Circuit Court.
ALLEN, BOTTS & DUNCAN, G.C. EWING and U.N. SWINFORD for appellant.
HOLMES & ROSS, C.W. GOODPASTER and W.B. WHITE for appellee.
Affirming.
The Hurst Insurance Company is a mutual assessment fire insurance company, incorporated under the laws of Kentucky, having its home office at Millersburg, Kentucky. It operates by procuring business through agents, who solicit insurance, collect the initial fee, receive the application for insurance and forward it to the home office for acceptance or rejection. The assessments are made from the home office and the insured pays directly to it. The policies are mailed by the home office to the insured. In February, 1920, James B. Ledford, who was the owner of a new dwelling house, which cost him over $30,000.00, took out a policy for $5,000.00 on his residence, insuring him against loss caused by fire, lightning or wind. While the policy was in force the house burned and Ledford brought this action to recover upon it. The company defended upon the ground that the risk had been misrepresented in the application and that the insured had taken out subsequently other insurance without its consent. The policy provided that it should be void if the insured took out other insurance without the written consent of the general manager and secretary of the company. On the trial of the case in the circuit court the plaintiff recovered. The defendant appeals.
The chief ground relied on for reversal is that the policy became void when the insured took out a subsequent policy in another company upon the house for $10,000.00, without the consent of the general manager and secretary. The facts as proved by the plaintiff and evidently accepted as true by the jury are these: Arthur Bristow was the soliciting agent of the company. About the time the house was finished he 'phoned Ledford, asking him to give him $5,000.00 of the insurance on the house. Soon afterwards he met Ledford on the street and repeated his request. Thereupon they went together to fix up the papers. Bristow was only allowed to write insurance on one house to the amount of $5,000.00. Ledford told Bristow that he would want other insurance on his house. Bristow told him that was all right to get other insurance when he got ready, that it would make no difference. Relying upon this statement of Bristow Ledford subsequently took out the additional insurance without knowing that he was required to get the written...
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