McPherson v. McLendon, 45243

• Decision Date: 07 April 1969
• Docket Number: No. 45243,45243
• Citation: 221 So.2d 75
• Parties: Kenneth McPHERSON and Mabel McPherson v. Christine McLENDON, d/b/a General Insurance Agency, James McBride, and NationalBen Franklin Ins. Co. of Pittsburgh.
• Court: Mississippi Supreme Court

Page 75

221 So.2d 75

Kenneth McPHERSON and Mabel McPherson v. Christine McLENDON, d/b/a General Insurance Agency, James

McBride, and NationalBen Franklin Ins. Co. of

Pittsburgh.

No. 45243.

Supreme Court of Mississippi.

April 7, 1969.

J. Harold Graham, Jr., Crystal Springs, for appellants.

Watkins & Eager, W. Thad Cochran, Jackson, for appellees.

INZER, Justice:

This is an appeal from a directed verdict granted by the Circuit Court of Copiah County for the appellees-defendants in a suit brought upon an oral contract of insurance. The circuit court granted the directed verdict on the ground that the appellants, Kenneth McPherson and his mother, Mabel McPherson, plaintiffs below, had not sufficiently proved apparent authority on the part of appellee Miss Christine McLendon to orally bind appellee Nation-Ben Franklin Insurance Company to insurance coverage for the appellants' automobile. The trial court also indicated that the pleadings and proof did not show with enough certainty that a contract had been entered into. We cannot agree with either of these conclusions reached by the learned judge and hold that viewing all the evidence favorable to the appellants as true, together with all the reasonable inferences that can be drawn therefrom, a jury question is presented as to both of these issues.

On November 13, 1965, Kenneth McPherson went to Nelson Chevrolet Company in Crystal Springs and selected a car that he desired to purchase. Since he was a minor and he wanted to buy the car on a monthly payment plan, it was necessary that the purchase be made in the name of his mother. He was also told that it would be necessary that he secure collision insurance coverage before the automobile would be released. Rather than purchase that insurance through the dealer which could have been purchased without delay, Kenneth decided to go to a local agency. He selected the General Insurance Agency owned by Miss Christine McLendon and employing Mr. James McBride.

The appellees' agency is of the 'independent' variety representing a number of insurance companies. Among the companies is the Continental Group which includes appellee National-Ben Franklin Insurance Company of Pittsburgh. Both Miss McLendon and McBride hold certificates of authority from the Mississippi State Insurance Departments as agents of National-Ben Franklin. The agency agreement between General Insurance Agency and National-Ben Franklin was introduced into evidence by the appellees. It consists of a letter from the Continental Insurance Companies offering to Miss McLendon participation in the Non-Standard Automobile Program of National-Ben Franklin, which she had accepted by countersigning. The letter incorporated by reference, as a term of their agreement, the whole of an agency agreement between Miss McLendon and America Fore Loyalty Group which provides as follows:

WITNESSETH THAT:

Pursuant to request that the underwriting facilities of the Company be made available to the undersigned, as Agent, the Company hereby grants authority to Agent to receive and accept proposals for such contracts of insurance covering risks or properties located in Crystal Springs, Mississippi, and vicinity as the Company has authority lawfully to make; subject however, to restrictions placed upon such Agent by the laws of the state or states in which such Agent is authorized to write insurance business and to the terms and conditions hereinafter set out.

IT IS HEREBY AGREED between the Company and the Agent as follows:

(1) Agent has full power and authority to receive and accept proposals for insurance covering such clauses of risks as the Company may, from time to time, authorize to be insured; to collect, receive and receipt for premiums on insurance tendered by the Agent to and accepted by the Company and to retain out of premiums so collected, as full compensation on business so placed with the Company, commissions at the rates as per Schedule(s) attached.

The letter and an attachment containing underwriting procedures, however, restricted Miss McLendon's authority on non-standard policies to taking applications and submitting them to a branch office. A non-standard risk is defined as 'one who has been cancelled, refused or rejected by another company for underwriting reasons.'

It was established at the trial that Miss McLendon acted as a general agent for the other companies she represented and had the power to accept and reject insurance risks. Moreover, in order to qualify Kenneth for a non-standard policy, Miss McLendon testified that by way of mental process she took and rejected an imaginary application from Kenneth to the American Employers Insurance Company and entered this information on the application she took on behalf of National-Ben Franklin.

Kenneth testified that Miss McLendon took the information and filled out the application which he signed. He said the agreement was for him to pay $100 of the yearly premium and finance the rest. Pursuant to this agreement he gave Miss McLendon a check for $40. Appellant made a further payment of $30 on November 20, 1965, and another $30 on November 27, 1965. This last check Miss McLendon admitted cashing after she received notice of the accident which severely damaged appellants' car on November 20, 1965. Kenneth was informed by Miss McLendon on November 13, 1965, when he made the $40 payment, that he was covered as of that time.

The sales manager for Nelson Chevrolet Company testified that he called the General Insurance Agency to get them to remind Kenneth to bring his mother along to sign the papers. He was told by McBride that Kenneth had already left but that he was presently covered by National-Ben Franklin and the dealer could release the car. It was also established that McBride worked in the same office as Miss McLendon, his desk a few feet away from hers.

The sale was concluded and Kenneth got his automobile. On November 20, 1965, he was involved in an accident at a train crossing and his new car was badly damaged.

The sales manager testified that he informed the General Insurance Company the day the accident occurred and on the 21st of November McBride came down to the dealership to look at the car. He promised to send an adjuster but the adjuster never arrived.

Miss McLendon testified that on December 2, 1965, she received notice from National-Ben Franklin that Kenneth's application for insurance had been rejected because of his driving record. Presumably they were referring to his accident on the 20th of November as this was the first automobile he had owned.

The application which was placed into evidence by the appellees shows the following pertinent information. The parties were Kenneth McPherson and National-Ben Franklin Insurance Company of Pittsburgh, Pennsylvania. The policy period was from 11:00 A.M. November 13, 1965, to November 13, 1966. The automobile to be covered was a 1966 Chevrolet, two door hardtop, serial number 118376N108345. The limits of liability were set as...