Ins. Co. of N. Am. v. Burton

• Decision Date: 11 November 1930
• Docket Number: Case Number: 19579
• Citation: 147 Okla. 112,294 P. 796,1930 OK 496
• Parties: INSURANCE COMPANY OF NORTH AMERICA v. BURTON et al.
• Court: Oklahoma Supreme Court

1930 OK 496

294 P. 796

147 Okla. 112

INSURANCE COMPANY OF NORTH AMERICA v. BURTON et al.

Case Number: 19579

Supreme Court of Oklahoma

Decided: November 11, 1930

Syllabus

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

Section 6723, C. O. S. 1921, 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--Agent Held not Authorized to Cancel Policy and Place Risk with Another Insurer Without Knowledge of Insured.

Where one applied to an agent authorized to issue policies and collect premiums for insurance in a stated sum, and the agent issued a policy therefor, delivered it, and collected the premium, the contract was complete, and the agent on notice from insurer to cancel the policy could not without insured's knowledge place the risk with another insurer.

3. Same.

Where there is no evidence of an express direction or authorization by an insured to an agent of a fire insurance company to insure property and keep it insured, evidence of a custom between the insured and the agent for the company to renew policies of insurance when they expire without express request or direction from the insured, allowing the agent to select the companies, is insufficient to constitute the agent of the companies the agent of the insured with power to accept or waive notice of cancellation of policies of insurance and substitute new policies without knowledge or consent of the insured.

Commissioners' Opinion, Division No. 2.

Error from District Court, McIntosh County; Harve L. Melton, Judge.

Separate actions by N. M. Burton against Insurance Company of North America and National Fire Insurance Company of Hartford, Conn., consolidated. Judgment for plaintiff against both defendants, and in favor of National Fire Insurance Company of Hartford against Insurance Company of North America in case it should pay plaintiff's judgment, and Insurance Company of North America appeals. Reversed, with directions.

Tomerlin & Chandler, for plaintiff in error.

Frank E. Lee, for defendant in error National Fire Insurance Company.

DIFFENDAFFER, C.

¶1 This is an action to determine which of two fire insurance companies is liable for the loss by fire sustained by defendant in error, N. M. Burton.

¶2 The National Fire Insurance Company of Hartford, through its agent, J.S. Hurt, issued plaintiff a fire insurance policy for $ 2,500 covering a potato warehouse located in Eufaula. The policy was dated September 26, 1926. The premium was $ 42. Plaintiff paid $ 20 on the premium. He directed the agent to attach a mortgage clause to the policy in favor of the Exchange Trust Company of Tulsa, and send the policy to it. The agent did not send the policy to the trust company, but held it in his own possession until about November 5, 1926, at which time he received a telegram from the insurance company, directing him to cancel the policy, whereupon he attempted to cancel it, and on November 6th issued another policy for a like amount covering the same property, placing it in the Insurance Company of North America.

¶3 On November 7th, the warehouse was totally destroyed by fire. Burton, being uncertain as to which company was liable, gave notice of loss and made proof of loss to each company. Each company denied liability, whereupon Burton brought separate suits. The two actions were consolidated, and, at the trial, it was stipulated that one of the companies was liable, and that the amount of insurance plaintiff was entitled to recover exclusive of interest was $ 2,500. There was a further stipulation, as follows:

"It is further stipulated and agreed between all parties that in case judgment is rendered against one of the defendants in said consolidated cause and said company against whom said judgment is rendered appeals the same to the Supreme Court, and, upon final determination of said cause, the Supreme Court shall determine that said company is not liable but that other insurance company is liable, that the Supreme Court may enter judgment against the company found to be liable in the final determination of the cause in said court without any appeal being taken by the insured. That the causes are consolidated under No. 5189."

¶4 The question of the right of plaintiff to recover on both policies to their full amount is not in this case. It was not considered below and is not considered here.

¶5 The cause was tried to the court, without a jury, resulting in finding, in effect, that both companies were liable to plaintiff for the $ 2,500; that the primary liability for the payment of the judgment was upon the Insurance Company of North America, and the secondary liability therefor was upon the National Fire Insurance Company. Judgment was rendered accordingly against both companies for $ 2,500, with interest from March 1, 1927, at six per cent., until paid, and providing further that in the event the Insurance Company of North America should fail, refuse, or neglect to pay the same, and National Fire Insurance Company is compelled to and does pay same, then, in that event. National Fire Insurance Company have judgment against the Insurance Company of North America to reimburse it.

¶6 From this judgment, the Insurance Company of North America appeals, making both N. M. Burton and the National Fire Insurance Company of Hartford defendants in error.

¶7 On November 29, 1929, the cause was, as to defendant in error N. M. Burton, revived in the name of S. D. Homan, administrator.

¶8 The question as to which company is liable depends entirely upon whether or not J. S. Hurt was the agent of Burton, with power to accept or waive notice of cancellation of the first policy. The finding and judgment of liability of both companies, the one primary and the other secondary, cannot be sustained. No serious attempt is made by either party to sustain this holding. It must be that the first policy was still in effect at the date of the fire, and the National Fire Insurance Company of Hartford solely liable, or that its policy had been canceled, and that of the Insurance Company of North America put into effect as a substituted policy, and that company consequently solely liable.

¶9 For convenience the policy of the National Fire Insurance Company of Hartford will hereinafter be referred to as the first policy, and that of the Insurance Company of North America as the second policy.

¶10 It is conceded that there was no notice given to Burton of the attempted cancellation of the first policy until after the fire, and the cancellation was therefore ineffective, unless, as before stated, J. S. Hurt, who was the agent of both companies with power to issue and sign policies of insurance for both companies, was also the agent of the insured with power to accept or waive notice of cancellation.

¶11 It is suggested that by reason of section 6723, C. O. S. 1921, Hurt was made the agent of the insurance company in all matters relating to the application for insurance, and the policy issued in consequence thereof, and therefore could not be the agent of Burton in any matter relating to the policy, and therefore could not for Burton accept or waive notice of cancellation. Section 6723 reads:

"Any person who shall solicit and procure an application for insurance shall, in all matters relating to such application for insurance and the policy issued in consequence thereof, be regarded as the agent of the company issuing the policy, and not the agent of the insured, and all provisions in the application and policy to the contrary are void and of no effect whatever."

¶12 A number of cases from this court are cited in support of this suggestion, but none of them cover the question here presented. 22 Cyc. 1445, states the rule applicable here, as follows:

"But the same person may act for different purposes as agent of the different parties to the contract so that for one purpose he may be the agent for the insured, although, as to the procuring of the insurance, he also represents the company."

¶13 In Davis Lbr. Co. v. Hartford Fire Ins. Co. (Wis.) 70 N.W. 84, it was held:

"Rev. St. sec. 1977, providing that whoever solicits insurance for any insurance company or property owner, or transmits an application for insurance or a policy, is an agent of the company, does not preclude such solicitor from acting as agent of the insured in some particulars."

¶14 In Hamm Realty Co. v. N. H. Fire Ins. Co. (Minn.) 83 N.W. 41, it was held:

"A general insurance agency, representing several companies, with authority to act upon applications and issue policies, as well as to cancel the same, in proper cases, may also act as the agent of the insured in waiving a notice of cancellation, and in accepting a delivery of a new policy when substituted for the one canceled."

¶15 The question then is whether,...