Insurance Co. of North America v. Thornton

• Decision Date: 06 June 1901
• Citation: 130 Ala. 222,30 So. 614
• Parties: INSURANCE CO. OF NORTH AMERICA v. THORNTON ET AL.
• Court: Alabama Supreme Court

30 So. 614

130 Ala. 222

INSURANCE CO. OF NORTH AMERICA v. THORNTON ET AL.

Supreme Court of Alabama

June 6, 1901

Appeal from circuit court, Pike county; John P. Hubbard, Judge.

Action by H. C. Thornton and others against the Insurance Company of North America. From a judgment in favor of plaintiffs defendant appeals. Reversed.

This action was brought by the appellees, H. C. Thornton and others, suing as partners, against the Insurance Company of North America, and counted upon an alleged verbal contract of insurance against fire on a stock of merchandise. The facts of the case necessary to an understanding of the decision on the present appeal are sufficiently stated in the opinion. There were several exceptions reserved to the rulings of the trial court upon the evidence, but it is deemed unnecessary to set out in detail the facts relating to these rulings. The defendant separately excepted to the following portion of the court's oral charge to the jury: (1) "If Mr. Glenn had the authority to make a verbal contract of insurance with Mr. Thornton, if he had been there present and doing it himself, that this was not such an act that he could not have authorized McGilvray to do for him. In other words, he could appoint another man to do for him what he could do himself in this particular; that is, to effect insurance, and thereby bind the company as effectually as Mr. Glenn could bind them." (2) "I charge you that the appointment of McGilvray was such an act as the general agent had the power to do; that is, to appoint another, and charge him with the power and authority to make verbal contracts of insurance and thereby bind the company, if he himself had the power to do that." (3) "The certificate of authority introduced in evidence tends to limit this authority to a particular locality, but this would be in the nature of private instructions to him so far as other parties are concerned, and the limitations contained therein are not such as to defeat the appointment by Mr. Glenn of a subagent." The defendant requested the court to give to the jury the following written charges, and separately excepted to the court's refusal to give each of them as asked: (4) "If the jury believe the evidence in this case, they will find a verdict for the defendant." (5) "If the jury believe from the evidence that Glenn was merely the local agent of the defendant at Dothan, with only such powers as are shown by the evidence, then he had no authority to authorize McGilvray to go to Enterprise and make contracts binding on the defendant." (6) "If the jury believe from the evidence that Glenn was merely the local agent of the defendant at Dothan, with only such powers as are shown in the evidence, then he had no authority to appoint a subagent to go to Enterprise, a place thirty-five or forty miles from Dothan, and accept insurance contracts binding on the defendant." (7) "Even if the plaintiffs for insurance, until said application was agreed to by Glenn, the agent of the defendant, or by the defendant there was no binding contract." (8) "Under the evidence in this case, there can be no recovery by the plaintiff, no matter what the authority given by Glenn to McGilvray to take applications at Enterprise." (9) "Under the evidence in this case, Glenn had no authority to appoint a subagent with authority to bind, the defendant and if Glenn did authorize McGilvray to take applications at Enterprise, and bind the defendant, a contract so made by McGilvray would not be binding on the defendant." (10) "There is no evidence in this case that McGilvray was authorized by or on behalf of the defendant to bind defendant on a verbal contract of insurance without the payment of the premium." (11) "If the jury believe the evidence, they cannot find for the plaintiffs on the first count." There were verdict and judgment for the plaintiffs. The defendant appeals, and assigns as error the several rulings of the trial court to which exceptions were reserved.

Watts, Troy & Caffey, for appellant.

Foster, Samford & Carroll, for appellees.

McCLELLAN C.J.

This is an action by H. C. Thornton and others, partners, against the Insurance Company of North America on an alleged verbal contract of insurance of a stock of merchandise. For the purpose of reviewing the action of the trial court in refusing the affirmative charge requested by the defendant the tendencies of the evidence most favorable to the plaintiffs may be stated as follows: One Glenn was the agent of 10 or 12 insurance companies, including the defendant. He resided and had his office at Dothan, in Henry county, Ala. The territory covered by his agency for defendant included Dothan and its vicinity. As such agent in that territory, he was supplied by the company with blank applications, etc., and with blank policies duly signed by the proper officers of the company. The certificate of authority issued to him by the company invested him "with full power to receive proposals for insurance against loss or damage by fire, in Dothan and vicinity, to fix rates of premiums, to receive moneys, and to countersign, issue, renew, and consent to the transfer and assignment of policies of insurance signed by the president and attested by the secretary of said company, and in all manner to attend to the business and duties of said agency, subject to the rules and regulations of said company, and to such instructions as may from time to time be given by its officers"; and it was further set forth in said certificate that "it is expressly understood that all policies shall be null and void and of no binding effect upon this company if issued upon property not situated within the district in which the agent issuing the same shall reside and for which he is appointed." Glenn had been carrying on this agency for defendant for several years, receiving applications and premiums, and filling up and countersigning policies intrusted to him bearing the signature of the president of the company and attested by its secretary. For three or four months prior to the transaction here involved, one McGilvray had been working in Glenn's office, learning the insurance business and assisting Glenn. During that time he had gone to Hartford, 15 or 20 miles from Dothan, to Pinckard, 12 miles distant, and to Headland, 12 or 15 miles from Dothan, under directions and instructions of Glenn, to take blank applications for insurance in defendant company, go to said places for the purpose of making contracts of insurance on property there situate, and if he got any applications he was to close the contracts of insurance applied for as of the date of the applications, respectively, and send the applications to Glenn, whereupon Glenn would issue the policies applied for, and send them to the applicants. He did make such contracts at these several places, and sent the applications for policies to Glenn at Dothan, and policies were countersigned and issued by Glenn on these applications. About the last of February, 1899, McGilvray went to Enterprise, a place about 35 miles by rail from Dothan, for the purpose of soliciting insurance. He testified: "I went there under instructions from Mr. John A. Glenn [defendant's agent], of Dothan, who was engaged in the insurance business at that time. *** He told me to take some applications for the North America Insurance Company [defendant], and go over there, and 'if you get any applications I will write the policies and send them to you, and you will just consider it covered from the date of application.' He told me to receive the premiums, and at the end of the month we would have a settlement, and he would give me my commissions and take the rest." On March 1, 1899, McGilvray, acting under these instructions from Glenn, took the application of Thornton's firm for a policy of insurance on their stock of goods at Enterprise, agreed with Thornton that the risk began on that day, and mailed the application to Glenn at Dothan to have the policy written up and sent to him (McGilvray) at Enterprise; and on March 17th he collected the premium from Thornton, deposited it in a local bank, and wrote to Glenn that the premium was in said bank subject to his (Glenn's) draft. On March 22, 1899, the stock of merchandise covered by said alleged contract of insurance was damaged by fire to the extent of $450. Glenn was away from his office when the application sent by McGilvray reached there, and continued absent until the day after the fire. Neither the envelope containing the application nor McGilvray's letter relative to the premium was opened until Glenn's return, so that he had no notice of the transaction until the loss had occurred and come to his knowledge. He then repudiated the transaction, refused to accept the premium, and denied defendant's liability in the premises. As bearing on the inquiry whether Enterprise was within the territorial limits of Glenn's agency, it was shown that that place was between Dothan and Elba by the railroad route, and defendant company had an agency at Elba; but whether Enterprise was nearer Elba or Dothan is not shown, nor does it appear that the Elba agency embraced Enterprise. On these tendencies of the evidence, Glenn was, of course, the general agent of defendant within the limits of the Dothan agency, and it was open to inference by the jury that Enterprise was within those limits, and hence was in the vicinity of Dothan, within the meaning of Glenn's authorization of agency, and hence, further, that the agency embraced the country surrounding Dothan to the distance of 35 miles. Upon such finding of the fact by the jury, the company is held to the contemplation that Glenn should do whatever was reasonably necessary to secure its share of the fire insurance business within that...