Jersey Ins. Co. v. Roddam, 6 Div. 199

• Decision Date: 11 October 1951
• Docket Number: 6 Div. 199
• Citation: 256 Ala. 634,56 So.2d 631
• Parties: JERSEY INS. CO. v. RODDAM.
• Court: Alabama Supreme Court

Page 631

56 So.2d 631

256 Ala. 634

JERSEY INS. CO. v. RODDAM.

6 Div. 199.

Supreme Court of Alabama.

Oct. 11, 1951.

Rehearing Denied Jan. 31, 1952.

F. W. Davies and Davies & Williams, all of Birmingham, for appellant.

Taylor, Higgins, Windham & Perdue, Birmingham, for appellee.

These charges were refused to defendant:

'3. If you believe the evidence in this case plaintiff is not entitled to recover on account of any waiver based upon any testimony of witness Paul Snow.

'4. If you believe the evidence in this case the plaintiff is not entitled to recover based upon any waiver on account of any conversation had between Mrs. Hattie L. Taylor and the witness Paul Snow.'

SIMPSON, Justice.

This is an action on a policy of fire insurance wherein plaintiff, Roddam, obtained a judgment against the defendant, The Jersey Insurance Company, for damage by fire to his building. The defendant appeals from that judgment.

The policy in suit described the insured property as a 'church edifice' and the endorsement on the back of the policy described it as a 'church and dwelling.' In fact, however, the building sought by plaintiff to be covered by the insurance served a multiple use. Two parts of it were devoted to an automobile garage and body shop, another smaller part was used as living quarters, and still another part, about one-fourth of the total square footage, was rented and used by a religious association or society for the holding of worship services.

The first and controlling proposition argued for error is that the trial court erred in refusing to give for the defendant the affirmative charge on the theory that the property damaged by fire was not within the coverage of the policy and that the coverage could not be extended to the building in question. It is contended that to do so would amount to the creation of a new and different liability by waiver or estoppel, arising out of the alleged act of the defendant's agent in so describing the property.

Concededly, coverage in an insurance policy cannot be enlarged or extended by waiver or estoppel, but in our view of the case this is not the question. The real question is whether the insured can be held bound by the acts of the general agent in so describing the property in the insurance contract. The situation here presented, as we see it, is merely misdescription of or failure to exactly describe the usage to which the property was subjected by the insurance company, through its general agent, either through mistake or for the purpose of meeting competition by writing the insurance for a lower rate than would have been required had the property been described as a garage.

Following is the tendency of the plaintiff's evidence and the inferences reasonably arising:

A Mrs. Taylor was the general agent of the defendant company and was authorized to write the policy. Tutton v. Liverpool & London Globe Ins. Co., 237 Ala. 230(5), 186 So. 551. She had written previous policies on the building. During the preceding policy year the plaintiff had made extensive improvements, including the institution in the building of the large garage in front, which adjoined the church room also in front, and the smaller automobile body shop in the rear of the church. In the rear of the large garage were three rooms used as living quarters. When agent Taylor went to Tarrant City for the purpose of procuring a renewal of the insurance policy, she commented to the defendant about his having made extensive improvements and suggested he double the amount of his coverage, but this he declined to do. On this trip, before talking to the plaintiff, she had stopped in the automobile in front of the garage while a companion, who was also interested in plaintiff's renewing the insurance, went into the garage to search for him. There were two plate glass windows in the front of the garage room approximately six by eight feet in size, on which were the words 'Tidwell Garage & General Repair' and on the corner was a board sign bearing the words 'Auto Repairs--Garage.' Adjoining this large garage room was the smaller church room. This situation was quite visible to anyone and we think the jury could properly infer, and no doubt correctly, that the agent, whose purpose it was to write insurance on this particular building, could see the use to which the building was being subjected, knew its character and that in addition to its use as a church it was also being utilized as a garage; and as regards the portion used as a dwelling house, she made the endorsement herself on the back of the policy indicating such. Indeed, a competing agent, a friend of plaintiff, who was also trying to sell a policy on the building, prior to the issuance of the policy asked Mrs. Taylor where and how she was basing her rate, stating he was bidding on the same insurance and that his rate was much higher than hers, and she replied that she was getting her rate at the same place he got his. He then queried, 'Well, do you know there is a garage and a church and a dwelling in there?' and she replied, 'Yes, I know my business.' During the negotiations between plaintiff and this general agent of the insurer, she first quoted a much higher rate and plaintiff stated it was 'outrageous and * * * wouldn't have it. It was in fact twice as much as I had been paying.' Thereafter, however, she called him again urging him to take the insurance and advised him that there had been a mistake in the rate and quoted him a much lower rate, and when his friend told him that he could not compete with such a rate and advised him to take the policy from this agent, he did so. According to his testimony, he made no suggestions about the description of the property, had no knowledge that it was so described, and when he received the policy he never looked at it, but placed it among his other belongings. From these facts the jury could find that the description of the building was that which the insurer's general agent chose to select and that perhaps the first-quoted higher rate was to cover the property with respect to its multiple use and the reduction was to meet the competition by writing the policy as a church edifice.

Therefore, it is manifest that the principles relative to extending coverage of the policy by waiver or estoppel are not pertinent, the real issue being whether or not the company can be held bound by this conduct of its general agent.

In some jurisdictions it seems to be the rule that where the property, the subject of the insurance, is misdescribed, even though the description be written by the company's agent, there can be no liability. It is said the minds of the parties never met on the subject matter of insurance; or that anterior or contemporaneous agreements between the parties thereto cannot be admitted to vary the terms of the written contract. Thomas v. Commercial Union Assur. Co., 162 Mass. 29, 37 N.E. 672, 44 Am.St.Rep. 323; Bowditch v. Norwich Union Ins. Co., 193 Mass. 565, 79 N.E. 788; Goddard v. Monitor Mutual Fire Ins. Co., 108 Mass. 56, 11 Am.Rep. 307, 309; Grady v. Concordia Fire Ins. Co. of Milwaukee, 267 N.Y. 177, 196 N.E. 16; Miller v. American Eagle Fire Ins. Co., 253 N.Y. 64, 170 N.E. 495; Rice v. Norwich Union Ins. Co., 128 N.J.L. 314, 25 A.2d 907; United Pacific Ins. Co. v. Northwestern Nat. Ins. Co., 10 Cir., 185 F.2d 443. In some of these cases it is not clear whether the defendant's agent was a general agent, and in others it appears that such was not the case.

But be that as it may, in this jurisdiction we have long followed a contrary view. In Inter-Ocean Casualty Co. v. Ervin, 229 Ala. 312, 313, 156 So. 844, 845, this court, speaking through the late Mr. Justice Bouldin to a somewhat analogous question, declared: 'It is fully settled in this jurisdiction that misrepresentations resulting solely from the act or oversight of the soliciting agent taking the application, without the knowledge of the insured or beneficiary, are not available to the insurer, although the issuing authority acts upon the application as presented, and without knowledge of the misfeasance of its agent. * * *'

Several of our prior decisions are cited in support of this principle, most of them dealing with life insurance, but one of them is Williamson v. New Orleans Ins. Ass'n, 84 Ala. 106, 108, 4 So. 36, 38. In speaking to the principle, it was there said: 'The answers to the questions contained in the application for insurance are made a part of the contract, and express warranties of their truth. Notwithstanding this, if the agent of the insured made true statements of the condition of the title and ownership of the property to the agent of the defendant, at the time the application for insurance and the answers were made, and the agent of the defendant nevertheless wrote the answer as appears in the application, thus substituting an answer which was untrue, the answer is the statement of the agent, and not of the assured. In such case the defendant will not be permitted to take advantage of the wrongful act, or misconstruction, or mistake, of its own agent, and avoid the policy, the insured being without fault. [Alabama] Gold Life Ins. Co. v. Garner .' See also Royal Exchange Assur. of London v. Almon, 202 Ala. 374, 80 So. 456; American Equitable Assur Co. v. Powderly Coal & Lumber Co., 225 Ala. 208, 142 So. 37; Dixie Fire Ins. Co. v. Flippo, 236 Ala. 116, 181 So. 117.

A case presenting a striking analogue and nearest in point is Alabama Mutual Fire Ins. Co. v. Minchener, 133 Ala. 632, 32 So. 225, where this court held in effect that when an insured, who has contracted for insurance, informs the agent of the insurance company, who is authorized to issue the policy (the general agent) of his desire to take out a policy of fire insurance upon a certain building and points the property out to such agent and the agent, in describing the house insured in the policy, misdescribes the property so as to make it...