Martin v. Provident Life & Accident Ins. Co.
| Decision Date | 08 March 1932 |
| Court | United States State Supreme Court — District of Kentucky |
| Parties | Martin v. Provident Life & Accident Insurance Company. |
2. Principal and Agent. — Principal is charged with constructive knowledge of material facts of which agent acquires knowledge while acting in course of employment and within apparent scope of authority.
Foregoing rule, however, is inapplicable unless the notice has reference to the business in which the agent is engaged under authority from the principal, and is pertinent to matters coming within the purview of such authority. Reason for rule is that the agent is presumed to advise his principal of matters which he is under a duty to disclose, and which his principal has a right to know.
3. Principal and Agent. — Rule that notice to agent binds principal is inapplicable when circumstances raise clear presumption that agent will not transmit knowledge.
4. Insurance. — Insurer's acceptance of premiums on accident policy after agent acquired knowledge of additional insurance held not to estop insurer from reducing liability for insured's failure to give written notice, where under circumstances agent's knowledge was not imputed to insurer.
Insured, after taking out additional insurance, did not comply with provision in accident policy requiring him to give written notice thereof to the insurer. Policy provided that agent had no authority to change the policy or to waive any of its stipulations. Insured relied on estoppel based on fact that he had informed general agent of insurer of additional insurance, and that the agent had agreed to notify the insurer if he thought it was necessary. Agent of the insurer was merely an agent for the purpose of taking applications for insurance.
5. Judgment. — Where defendant in answer admitted liability in part, judgment should have been rendered therefor with interest (Civil Code of Practice, sec. 380).
6. Judgment. — Plaintiff is entitled to judgment for uncontested amount of claim without precluding himself from prosecuting action to recover residue (Civil Code of Practice, secs. 380, 386).
7. Judgment. — Plaintiff's right to judgment for amount admittedly due is not affected by defendant's offer to confess judgment which is conditional (Civil Code of Practice, secs. 380, 386, 640).
8. Costs. — Refusal of offer to confess judgment does not defeat defendant's right to contest entire claim upon refusal of offer (Civil Code of practice, secs. 380, 386, 640).
9. Costs. — Where defendant's offer to confess judgment is declined, and greater sum is not recovered, plaintiff cannot recover costs accruing after offer (Civil Code of Practice, secs 380, 386, 640).
10. Interest. — In action on accident policy, plaintiff under petition, held entitled to interest from date of filing of petition.
Petition in action on accident insurance policy contained a prayer for interest from the date of the accident, but did not state the date. No other allegation was made as to when payment was due.
Appeal from Whitley Circuit Court.
R.L. POPE and C.B. UPTON for appellant.
TYE, SILER, GILLIS & SILER for appellee.
Reversing.
Bert Martin instituted an action against the Provident Life & Accident Insurance Company to recover $2,000 upon an accident insurance policy for the loss of his foot. The defendant admitted liability for $1,002.20, but sought to avoid further liability under a provision of the policy which reduced the indemnity if the insured obtained similar insurance in another company without giving written notice thereof to the defendant. The insurance in that event was limited to such portion of the indemnity promised as it bore to the total amount of insurance carried, and for a return of such part of the premium paid as exceeded the proper amount due for the reduced indemnity. It was alleged in the answer that Martin had procured another accident policy for like amount without giving written notice to the defendant company which operated to reduce the insurance under the present policy to $1,000. The sum of $2.20 was the excess of premium collected and which was to be returned. The company by its answer admitted liability for $1,002.20. By the reply an estoppel was interposed, in substance, that Martin had informed the general agent of the defendant company of the additional insurance, who had agreed to notify the company, and, relying upon that agreement with the agent, Martin had not given the written notice required by the conditions contained in the policy. In avoidance of the matters of estoppel pleaded, the company set up certain standard terms of the policy by which the authority of the agent was restricted. One provision was that no agent had any authority to change the policy, or to waive any of its stipulations. The other pleadings filed require no special mention. The case was tried before a jury, and, at the conclusion of the plaintiff's evidence, a peremptory instruction was given to find a verdict for the defendant. The plaintiff has prosecuted an appeal from the judgment dismissing his action.
It is not disputed that a provision of the policy required notice in writing of any additional insurance, and, if not given, the amount of insurance was reduced proportionately to the total insurance carried. It is admitted that no written notice was given. But it is argued that the insurance company was estopped to invoke that defense. Assuming, without deciding, that the agent in question was authorized to represent the company in the matter of waiving the written notice, we proceed at once to a consideration of the evidence.
The testimony of the plaintiff did not sustain the broad allegations of his pleadings. He testified that before obtaining the additional insurance he discussed the matter with the local agent who advised him to notify the company in which he proposed to take additional insurance, and, if it accepted the application, to advise him and he would notify his company "if he thought it was necessary." The statement is repeated several times that the agent said he would notify his company if he thought it was necessary. Martin testified further that, if he had not been so advised by the agent, he would have dropped the additional policy. Martin did not state that he was prevented from giving the written notice required by the policy, but he left the matter entirely to the judgment of the agent. Martin was aware of the provision in the policy which required him to give written notice if he took out additional insurance. He had read his policy and was familiar with its terms. He testified that he had read enough of his contract to know what it required respecting additional insurance and he deemed it sufficient simply to advise the agent. It does not appear that the agent advised the company, or that he made any promise in respect to the matter. He was the agent of the company for the purpose of taking applications for insurance, which were mailed to the home office in Chattanooga, Tenn. The policy sued upon was mailed to Martin. In view of the equivocal statements attributed to the agent, Martin was not justified in assuming that the provision of his policy respecting written notice of additional insurance had been waived. South v. Phila. F. & M. Ins. Co., 217 Ky. 612, 290 S.W. 493.
The point is made that the agent was informed of the additional insurance, and the company still continued to collect premiums on the face of the policy. The principle that knowledge of the agent is knowledge of the company is invoked, and such conduct of the company after the agent was advised of the fact that additional insurance had been taken is sought to be made the predicate of a waiver by the company, or of an estoppel against it. The priciples stated may be conceded. Niagara Fire Ins. Co. v. Johnson, 231 Ky. 430, 21 S.W. (2d) 794; Continental Ins. Co. v. Simpson, 220 Ky. 168, 294 S.W. 1048; Glens Falls Ins. Co. v. Elliott, 223 Ky. 205, 3 S.W. (2d) 219; Phoenix Ins. Co. v. Spiers & Thomas, 87 Ky. 285, 8 S.W. 453, 10 Ky. Law Rep. 254; Hurst Home Inc Co. v. Ledford, 207 Ky. 212, 268 S.W. 1090; Northwestern Nat. Ins. Co. v. Avant, 132 Ky. 106. 116 S.W. 274; Rogers v. Farmers' Mutual Aid Assn., 106 Ky. 371, 50 S.W. 543, 20 Ky. Law Rep. 1925; London & Lancashire Ins. Co. v. Gerteisen, 106 Ky. 815, 51 S.W. 617, 21 Ky. Law Rep. 471; Continental Ins. Co. v. Turner, 222 Ky. 608, 1 S.W. (2d) 1063; Westchester Fire Ins. Co. v. Wilson, 220 Ky. 142, 294 S.W. 1059; Owens v. National Life & Accident Co., 234 Ky. 788, 29 S.W. (2d) 557; Germania Ins. Co. v. Ashby, 112 Ky. 303, 65 S.W. 611, 23 Ky. Law Rep. 1564, 99 Am. St. Rep. 295; White Plains Coal Co. v. Tague, 163 Ky. 110, 173 S.W. 360.
It is a general rule of the law of agency that a principal is affected with constructive knowledge, regardless of his actual knowledge, of all material facts of which the agent receives notice or acquired knowledge while acting in the course of his employment and within the apparent scope of his authority, even though the agent may fail to inform his principal thereof. 2 C.J., sec. 542, p. 859. The rule is not applicable, however, unless the notice has reference to the business in which the agent is engaged under authority from the principal, and is pertinent to...
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