Johnson v. Farmers Ins. Co.
| Decision Date | 01 July 1918 |
| Docket Number | 32053 |
| Citation | 168 N.W. 264,184 Iowa 630 |
| Parties | IVA M. JOHNSON, Appellee, v. FARMERS INSURANCE COMPANY, Appellant |
| Court | Iowa Supreme Court |
REHEARING DENIED OCTOBER 18, 1918.
Appeal from Linn District Court.--MILO P. SMITH, Judge.
ACTION at law to recover damages on account of neglect of defendant's agent. Verdict and judgment for plaintiff and defendant appeals. The material facts are stated in the opinion.--Modified and affirmed.
Modified and affirmed.
Deacon Good, Sargent & Spangler and Dawley, Jordan & Dawley, for appellant.
Rickel & Dennis, C. W. Kepler & Son, and C. J. Lynch, for appellee.
The plaintiff's original petition alleged that, on June 11, 1911, she was the owner of certain described property in the city of Lisbon, Iowa, and for many years had kept the residence building and contents thereof insured in the defendant company; that, on June 25, 1906, she procured from the defendant a policy of insurance on said property for a period of five years; that, by inadvertence, at the expiration of said period, the policy was not immediately renewed, but a short time thereafter, to wit, July 20, 1911, one Runkle, who was the defendant's agent, notified plaintiff's husband, E. A. Johnson, that the policy had lapsed, and solicited a renewal thereof; and thereupon, plaintiff's husband, acting in her behalf, and Runkle, acting for the defendant, orally agreed upon the issuance of a policy of insurance for the sum of $ 2,800 on the dwelling house, $ 1,000 on its contents, and $ 700 on the house. She further alleges that the agent made a minute of the data necessary for him to have in order to report the transaction to the company and to obtain the policy thereon, and promised that said insurance should be made effective for three years from twelve o'clock, noon, of that day; and the said E. A. Johnson, on the same day, and in consideration of such promised insurance, paid to said agent the agreed premium thereon. It is further alleged that, at the time of this transaction, the agent suggested that he had a fireproof safe, which he used for the safe-keeping of policies, and that, if permitted, he would deposit the plaintiff's policy there, when received from the company; that, relying upon said agent to make the proper report to the company and secure the issuance of a policy, and believing that this had, in fact, been done, and that the property was duly insured, according to the agreement, she made no further inquiry about it until, on February 15, 1914, her said dwelling and its contents were destroyed by fire, when she discovered that said agent had negligently failed to report the transaction to the company, and did not, in fact, procure the issuance of a policy. Notice of loss was immediately given to the defendant, which denied liability, on the ground that no policy had been issued to her. Thereupon, this action was begun, to recover damages to the amount of the insurance which had been agreed upon with defendant's agent, and paid for as above alleged.
Thereafter, plaintiff filed an amended and substituted petition, stating the alleged facts with more particularity; and among other things, she averred that said agent was duly authorized by defendant to solicit insurance from property owners and collect premiums on such insurance, and to receive from defendant for its patrons the policies issued by it; that the agent, with the knowledge and consent of the defendant, had customarily himself prepared the applications for policies, and forwarded same without the signature of the applicants, except as written thereon by himself; and that defendant had recognized his authority so to do, by accepting such applications and issuing policies thereon; and that this custom and manner of the agent in doing business were also known and relied upon by plaintiff's husband and agent, and in such reliance, the premium was paid. The plaintiff further alleges that the failure to transmit the premium to the company and to procure the issuance of the promised policy was occasioned by the negligence of defendant's agent, and without negligence on her part; and that, because thereof, she has suffered damage, to the amount of the insurance which had been agreed upon.
Answering the claim thus stated, defendant denied that any policy was ever issued to the plaintiff, or that it ever agreed or undertook to issue such policy, or became in any manner liable to her on account of the loss of the property. It is further pleaded that, immediately after the fire, plaintiff, claiming to have been insured, notified defendant of her loss, and asked for blanks on which to make formal proof thereof. In the same notice, plaintiff stated that the property was insured about August 1, 1911, but that the policy was not in her possession. Because of the giving of such notice and the making of such claim, defendant says it relied upon the fact that no policy had been issued as a sufficient defense, and therefore denied all liability, and employed counsel and incurred expense to sustain such defense; and that plaintiff is, therefore, estopped to assert any claim for a recovery of damages arising from the negligence of defendant's agent. There was a trial to a jury, resulting in verdict and judgment for the plaintiff for the full amount of her claim.
Before taking up the several assignments of error argued by appellant, it will clarify the situation to mention certain matters of fact disclosed by the record. There was evidence from which the jury could find that, in July, 1911, W. H. Runkle was the defendant's agent in the town of Lisbon, and had transacted business as such with the plaintiff or her husband, who acted as her agent; that, as agent for the defendant, Runkle had solicited many property owners in that vicinity to insure their property with the defendant, and had collected the premiums therefor; that it was his uniform practice not to require such property owners to sign written applications for the insurance desired, but, having obtained the data required, he himself filled out the applications and signed the names of the property owners thereto, adding to each of such signatures the words "By W. H. Runkle;" that the applications thus made and signed were regularly accepted by the defendant, and policies issued thereon; that said agent and his manner of doing such business were well known to the plaintiff, or to her husband, who represented her in said matters; that said agent personally solicited the renewal of said insurance, and entered into an agreement with plaintiff's husband to procure a policy for her, as alleged in the petition, and obtained the necessary data to enable him to report the transaction to the company, and received the premium to be paid for such insurance. The jury could properly have found, also, that, at the time when the premium was paid, Runkle said he would deposit the policy, when received, in his safe, where it would be securely preserved; but that, in truth, he neglected to report to the defendant said application or agreement for a renewal of the insurance, or to turn over to defendant the premium collected thereon by him; and that, by reason of such neglect, no policy was, in fact, ever issued.
Numerous other facts, of more or less relevance, are either admitted or find support in the testimony; and, so far as the same may appear necessary to the proper disposition of the appeal, they will be hereinafter mentioned more specifically.
I. The first proposition argued for appellant is, in substance, that plaintiff could not rightfully expect a policy to be issued to her through Runkle, who was no more than a soliciting agent, until she had signed an application therefor; and, if she relied upon Runkle to fill the application and sign her name thereto, he was, in such respect, her agent, and not the agent of the company; and in such case, the company is not liable for the consequences of his neglect.
But nothing is claimed for the plaintiff, as we understand the situation, because of Runkle's failure to subscribe her name to an application. The evidence as to his manner of doing business, and of the company's acquiescence therein by its issuing policies on his reports with forms of application made and signed by himself, shows a voluntary waiver by the company of the necessity of any written application by the property owner. If it saw fit to do business on that basis, and issue policies upon risks so solicited and obtained, it is not in position to plead, in avoidance of liability so incurred, that its agent was, in any respect, acting as agent for the property owner. There is no magic in the mere name "soliciting agent," "recording agent," or "general agent." Our statute provides that every person who shall, in any manner, directly or indirectly, transact business for any insurance company, is the agent of such company (Code Sections 1749, 1750). The scope and extent of his authority is shown, not merely by reference to his title or to his written commission or credentials, but by the business which he is permitted to do and perform, and does do and perform, in the company's name, or by its apparent acquiescence and consent. His act in that behalf is the company's act, and his neglect with respect to such business is the company's neglect. It may well be possible that, in so far as concerns Runkle's promise to deposit the policy in his safe when it was received from the company, it was his individual undertaking, and that, had he received and held the policy, he would not, as such depositary or bailee, be considered the representative of the company; but the fact of such promise would, nevertheless, be...
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