Lehmann v. Hartford Fire Ins. Company

• Decision Date: 02 June 1914
• Parties: JOHN S. LEHMANN, Respondent, v. HARTFORD FIRE INSURANCE COMPANY, Appellant
• Court: Missouri Court of Appeals

167 S.W. 1047

183 Mo.App. 696

JOHN S. LEHMANN, Respondent, v. HARTFORD FIRE INSURANCE COMPANY, Appellant

Court of Appeals of Missouri, St. Louis

June 2, 1914

Submitted on Briefs May 6, 1914.

Appeal from St. Louis City Circuit Court.--Hon. William M. Kinsey Judge.

AFFIRMED.

Judgment affirmed.

Fauntleroy Cullen & Hay for appellant.

(1) Upon sound principles of public policy, it is held that an offer made by way of sacrifice or concession for the sake of peace, or in settlement or compromise of a disputed claim, is not admissible, regardless of whether the admissions were made orally or in writing, or whether they were made directly to the opponent or expressed to a third person. Peace is of such worth that a reasonable man may well be presumed to seek it even at the cost of his strict right and by an abatement from his just claim. Cullen v. Insurance Co., 126 Mo.App. 412; Meyer v. Frenkil, 116 Md. 411, 82 A 208; Harrington v. Lincoln, 4 Gray 563; Brice v. Bauer, 108 N.Y. 428; Wrynn v. Downey, 27 R. I. 454; Louisville, Etc., R. Co. v. Wright, 115 Ind. 378. (2) Where on the face of the fire policy the property describes a dwelling house, such a statement is a warranty and becomes a part of the contract and the assured cannot recover for a loss unless it is true. Boyd v. Vanderbilt Ins. Co., 16 S.W. 470; Alexander v. Germania Ins. Co., 66 N.Y. 464. (3) The first instruction is erroneous because it holds the company liable for the acts of a broker and treats a broker as if he were an agent. An agent of an insurance company, in obtaining or placing surplus insurance in another company or agency than his own, acts as broker or agent of the insured, and the instruction given by the court was erroneous. Bateman v. Lumberman's Ins. Co., 189 Pa. 465; Freeman v. Providence-Washington Ins. Co., 182 Pa. 64; Sellers v. Commercial Ins. Co., 105 Ala. 282; Merchants' Ins. Co. v. Union Ins. Co., 163 Ill. 173; Hart-ford Ins. Co. v. Reynolds, 36 Mich. 502; McElroy v. British American Assur. Co., 88 F. 863. (4) An insurance broker is ordinarily one who is engaged in the business of procuring insurance for such persons as apply to him for that service. He is therefore usually the agent of the insured and will be so considered. Wilber v. Williamsburgh Ins. Co., 122 N.Y. 439; United Firemen's Ins. Co. v. Thomas, 92 F. 127; Sellers v. Commercial Fire Ins. Co., 105 Ala. 282; John R. Davis Lumber Co. v. Hartford Fire Ins. Co., 95 Wis. 226; Allen v. German-American Ins. Co., 123 N.Y. 6; Seamans v. Knapp-Stout & Co., 89 Wis. 171; American Fire Ins. Co. v. Brooks, 83 Md. 22; Northrup v. Piza, 43 A.D. 284; Arff v. Star Ins. Co., 125 N.Y. 63; McGrath v. Home Ins. Co., 88 A.D. 153; Parrish v. Rosebud Mining Co., 140 Cal. 635; Edwards v. Home Ins. Co., 100 Mo.App. 695; Turnbull v. Home Ins. Co., 83 Md. 312; Armour v. Transatlantic Ins. Co., 90 N.Y. 450; Fromherz v. Yankton Ins. Co., 7 S.D. 187; Commonwealth Ins. Co. v. Fairbank Canning Co., 173 Mass. 161; United Firemen's Ins. Co. v. Thomas, 98 F. 127; Hamblet v. City Ins. Co., 36 F. 118; Seamans v. Knapp Co., 89 Wis. 171; East Texas Ins. Co. v. Brown, 82 Tex. 631; Home Ins. Co. v. Eakin, 2 Tex. Ct. App. 665, 14 Ins. L. J. 569; Fame Ins. Co. v. Thomas, 10 Bradw. 545; Hartford Ins. Co. v. Reynolds, 36 Mich. 502. (5) A mere insurance broker cannot be converted into an agent of an insurance company without evidence of some action on the part of the company or of facts from which a general authority to represent it might be fairly inferred. Allen v. German-American Ins. Co., 123 N.Y. 6. And the company is not bound by the broker's knowledge. Bradley v. German-American Ins. Co., 90 Mo.App. 369; McFarland v. Peabody Ins. Co., 6 W.Va. 425; Fame Ins. Co. v. Mann, 4 Bradw. 485; Ben Franklin Ins. Co. v. Weary, 4 Bradw. 74; Devens v. Mechanics' & Traders' Ins. Co., 83 N.Y. 168; Royal Ins. Co. v. McCrea, 8 Lea, 531; Fire Assoc. v. American Cement Co., 84 S.W. 1115; East Texas Ins. Co. v. Brown, 82 Tex. 631; Mellen v. Hamilton Ins. Co., 5 Duer, 101; 17 N.Y. 609; Fire Assoc. v. Hagwood, 82 Va. 342, 17 Ins. L. J. 876. (6) The first instruction is erroneous for the further reason it invades the province of the jury and declares that the facts hypothesized therein establish agency as a matter of law. Winter v. K. of P., 96 Mo.App. 102; Glover v. Duhle, 19 Mo. 360; Lamb v. Bush, 49 Mo.App. 341. (7) A refusal to pay, to justify the infliction of a penalty or attorney's fees, must be willful or without reasonable cause, and this question of will-fulness will not be determined by the outcome of things at the trial, but by the appearance before the trial as judged by a prudent and reasonable man, and there is no evidence in this case which authorized the court to submit the issue of vexatious delay and consequent damage and attorney's fees to the jury, and the finding of the jury is wholly without evidence to support it. Rogers v. Insurance Co., 157 Mo.App. 671; Blackwell v. American Central, 80 Mo.App. 75; Mack v. Lancashire Ins. Co., 4 F. 59. (8) Plaintiff's instruction on vexatious penalties is erroneous, because it does not define "reasonable cause." Jordan v. Moulding Co., 72 Mo.App. 325; Stevens v. Crane, 37 Mo.App. 495; Dry Goods v. Schooley, 66 Mo.App. 406; Bowles Co. v. Hunter, 91 Mo.App. 337; Mulderig v. Railroad, 116 Mo.App. 672. (9) Penalties and attorney's fees are created by statute and the cause of action based thereon is not assignable, and the right to statutory penalties and attorney's fees is a personal right, limited to the person who suffers the loss, and are recoverable by him only and not by an assignee. R. S. 1909, Sec. 1729; Lumber Co. v. Realty Co., 138 N.Y.S. 829; Lloyd v. Nat'l Bank of Kan., 5 Kans. App. 512, 47 P. 575; McGee v. McCann, 69 Me. 79; McBratney v. Railroad 17 Hun, 385.

Lehmann & Lehmann for respondent.

(1) The writing of a rider in an insurance policy is a function of the insurance company. When the insurance company allowed Klobasa to write the provisions of their policy he was acting for them and if he made a mistake therein, it was their mistake and the assured cannot be prejudiced thereby. Langford v. Ins. Co., 97 Mo.App. 79. (2) By permitting Klobasa to put a paster on their policy that he was "Manager of their St. Louis Branch," the insurance company is estopped to deny this agency. Baker v. Railroad, 91 Mo. 152; 22 Cyc. 1434; Queen Insurance Co. v. Bank, 111 F. 697; Rosencrans v. Ins. Co., 66 Mo.App. 352. (3) The direct, positive and uncontradicted evidence of Schulte, the confessedly duly authorized agent of defendant, that in this particular case Klobasa was acting as agent for defendant is binding on defendant. Hill Bros. v. Bank, 100 Mo.App. 230. (4) The fact that White dealt with Klobasa as agent, together with the fact that defendant was aware that its official agent Schulte exchanged business with Klobasa, and that it received the premium and issued the policy through Klobasa made Klobasa the Company's agent. Queen Ins. Co. v. Bank, 111 F. 697; May v. Assurance Co., 27 F. 260; Westerman v. Ins. Co., 32 P. 458; McGraw v. Ins. Co., 54 Mich. 145; McElroy v. Ins. Co., 94 F. 990; Ins. Co. v. Hartwell, 123 Ind. 177; Ins. Co. v. Wiard, 59 Neb. 451; Rosencrans v. Ins. Co., 66 Mo.App. 352. (5) The verdict and judgment are manifestly for the right party and the judgment should therefore be affirmed. Jones v. Ins. Co., 173 Mo.App. 1; R. S. 1909, Sec. 2082. (6) The remark of Warfield was not during negotiations for a compromise, but in connection with White's proof of loss and was admissible. Cullen v. Insurance Co., 126 Mo.App. 412; Mason v. Insurance Co., 150 Mo.App. 17. (7) The misdescription of the property, if conceded, did not avoid the policy. Langford v. Ins. Co., 97 Mo.App. 79. (8) Instruction two of the court's own motion is abstractly correct. A grocery store in one room of a dwelling house does not as a matter of law change the hazard. This was a question for the jury. Sec. 7024, R. S. 1909; Hanna v. Ins. Co., 109 Mo.App. 156. There was no evidence on which to base this instruction whatsoever, as the only testimony was that White informed Klobasa of the grocery store. Its giving was error against respondent. In getting any instruction at all on this theory appellant got more than it was entitled to and even if erroneous, the error is harmless as to appellant. (9) Plaintiff's instruction on vexatious penalties follows the form approved by the Supreme Court. Keller v. Ins. Co., 198 Mo. 440. (10) The statute on penalties and attorney's fees makes no distinction between the assured and his assignee, but runs in favor of plaintiff in an action on an insurance policy. An assignee can therefore recover the penalty and attorney's fee. Sec. 7068, R. S. 1909; Jones v. Insurance Co., 173 Mo.App. 1. (11) This appeal is without merit and the judgment should be affirmed with ten per cent damages. R. S. 1909, Sec. 2084; Wallace v. Ins. Co., 157 S.W. 1028.

REYNOLDS, P. J. Nortoni and Allen, JJ., concur.

OPINION

REYNOLDS, P. J.--

One White, desiring to procure insurance on certain household goods, situated in his residence in the city of St. Louis asked one Ver Steeg, a real estate agent, to procure the insurance for him. Ver Steeg went to one Klobasa, an insurance agent or broker, and applied for the insurance. It appears that Klobasa, for some reason and following a custom prevailing between insurance agents and brokers in St. Louis, went to one Schulte, who was also engaged in the insurance business and asked him to write the policy in one of the companies for which Schulte was agent. Schulte gave Klobasa a policy in the Hartford Fire Insurance Company, insuring household and kitchen furniture belonging to White and his family, the policy to cover the property "while contained...