Moore v. Farmers' Mut. Ins. Ass'n

• Decision Date: 19 April 1899
• Citation: 107 Ga. 199,33 S.E. 65
• Parties: MOORE. v. FARMERS' MUT. INS. ASS'N.
• Court: Georgia Supreme Court

33 S.E. 65

107 Ga. 199

MOORE.

v.FARMERS' MUT. INS. ASS'N.

Supreme Court of Georgia.

April 19, 1899.

Insurance — Action on Policy — Defenses — Jurors—Competency.

1. It is competent and lawful for an insurance company, in defense to an action upon a fire policy purporting to have been issued by it, to plead that the same was never in fact delivered, but merely handed to the person therein named as the insured, under an agreement that it was not to become binding upon the company until he had canceled another policy in a different company insuring the same property, which was never in fact done; and parol evidence is admissible to prove a plea of this kind.

2. Persons related within the prohibited degree to members of a mutual fire insurance company, who are liable to be assessed for the purpose of raising the money to pay losses incurred by it, are incompetent to serve as jurors on the trial of an action against such company upon one of its policies; and where persons so related actually served as jurors on such a trial without the knowledge or consent of the losing party, a new trial should be granted, notwithstanding the ignorance of these jurors that their kinsmen were members of the company. It is not in such a case incumbent upon the plaintiff to ascertain in advance of the trial who are the members of the company, with a view to having them excluded from the panel of jurors.

(Syllabus by the Court.)

Error from superior court, Oglethorpe county; S. Reese, Judge.

Action by W. F. Moore against the Farmers' Mutual Insurance Association. Judgment for defendant, and plaintiff brings error. Reversed.

W. M. Howard and Saml. H. Sibley, for plaintiff in error.

H. McWhorter, for defendant in error.

COBB, J. W. F. Moore sued the Farmers' Mutual Insurance Association upon a policy of fire insurance. The defendant pleaded, among other things, that at the time the policy sued on was issued the plaintiff hada policy of insurance in another company on the same property, and that it was distinctly agreed between the parties that the policy issued plaintiff by the defendant should not become operative until the plaintiff canceled the other policy, and that, if this was not done, the policy sued on should become void, and of no effect; that plaintiff failed to cancel the other policy, but left the same open and operative, whereby the policy issued by the defendant became null and void; that, as soon as defendant was informed that plaintiff was claiming to be a member of the defendant association, and that it was liable upon the policy issued him, defendant offered, and does now offer, to refund to plaintiff the premium paid by him to its agent Upon the trial a verdict was rendered in favor of the defendant. Plaintiff made a motion for a new trial upon grounds hereinafter referred to, and, upon the same being overruled, he excepted.

1. One of the grounds of the motion for a new trial was as follows: "Because the court erred in admitting the following testimony of W. J. Davenport, a witness for the defendant: The policy was delivered to Mr. Moore upon the condition that it was not to be operative until he canceled the policy in the Hartford.' Said testimony was objected to at the time (and all other testimony of the same import was so objected to) on the ground that parol evidence was not admissible to impeach the delivery to the plaintiff, or to contradict or vary the written policy." If the effect of the evidence objected to was to add to, take from, contradict, or vary the terms of a valid written contract, the evidence was, of course, inadmissible. Civ. Code, §§ 3675, 5201. This, however, was not the purpose of the testimony. It was offered, not to vary the contract, but to prove a state of facts from which it would be manifest that no contract of insurance had ever been entered into between the parties. The controversy between the parties was whether or not the paper sued on constituted a contract between them. If the paper contained a contract of insurance, there was no dispute as to its terms; nor was there any pretense that either party was bound in any other way than that set forth in the writing. Did this writing constitute a contract? Had each party assented to it? And had it become a complete and binding agreement between them? If it did constitute a contract between them, then it must be looked to to determine the terms and conditions of the contract, and parol evidence would not be admissible to vary any of the stipulations therein contained. The evidence admitted did not in any way alter any stipulation in the paper claimed by the plaintiff to be a contract of insurance; the effect of the testimony being simply to show that there was no contract between the parties. The paper had been delivered to the plaintiff, but the parties had agreed that it should not be a contract until the plaintiff had per formed certain acts, which were expressly made conditions precedent to the completion of a contract between them. It is true that a manual delivery of a paper purporting to contain a contract of insurance is prima facie evidence of a binding contract of that character. 1 May, Ins. §§ 56, 60. But the purpose of the testimony admitted was to rebut the presumption arising from the possession by the plaintiff of the policy. It has been held by the English courts, as well as by courts of many of the states of the Union, that evidence of the character admitted in the present case is admissible, and that the admission of the same does not infringe upon the well-settled rule which prohibits the introduction of oral testimony to vary the terms of a written contract. In the case of Pym v. Campbell, 6 El. & Bl. 370, Lord Chief Justice Campbell uses this language: "No addition to or variation from the terms of a written contract can be made by parol, but in this case the defense was that there never was any agreement entered into. Evidence to that effect was admissible, and the evidence given in this case was overwhelming. It was proved in the most satisfactory manner that before the paper was signed it was explained to the plaintiff that the defendants did not intend the paper to be an agreement till Abernethie had been consulted, and found to approve of the invention; and that the paper was signed before he was seen only because it was not convenient to the defendant to remain. The plaintiff assented to this, and received the writing on those terms. That being proved, there was no agreement." In Wallis v. Littell, 11 C. B. (N. S.) 369, the defendant pleaded that the agreement declared on was made subject to the condition that it should be null and void if a named person should not, within a reasonable time after the making of the agreement, consent and agree to the transfer of a certain farm to the plaintiff, and it was held that "it was competent [for] the defendant to prove by extraneous evidence this contemporaneous oral agreement; such oral agreement operating as a suspension of the written agreement, and not in defeasance of it." In Faunce v. Insurance Co., 101 Mass. 279, a suit was brought upon a policy of insurance. The plaintiff undertook to show that the defendants agreed to issue such a policy as was sued on, and that the terms on which it was to be issued were fully complied with; that the policy was written and executed, and thereby became a valid contract; and therefore, though the paper was not delivered, and remained in the hands of the defendants or their agents, that it was her property, and would support her action. To meet this, the defendant proved by parol that it was agreed between the parties that the policy should issue, not in addition to, but as a substitute for, a policy previously made, which was to be surrendered; that the earlier policy was not surrendered, but had been enforced andpaid. It was held that it was competent to prove this defense by parol evidence, "because the evidence is not to vary the contract, but to prove whether any contract was made. No written contract passed from one party to the other; and the point in controversy is whether the parties agreed that a certain paper, without more, should be the contract. This must, of course, be proved by parol." See, also, Markey v. Insurance Co., 126 Mass. 158. In Benton v. Martin, 52 N. Y. 570, the court of appeals of New York held: "An instrument not under seal may be delivered upon conditions the observance of which, as between the parties, is essential to its validity; and the effect of the delivery and the extent of the operation of the instrument may be limited by the conditions upon which the delivery was made. And this is so as between the parties to it or those having notice, although the instrument be negotiable. The annexing of such conditions to the delivery is not an oral contradiction of the written obligation." The same court, in Reynolds v. Robinson, 110 N. Y. 654, 18 N. E. 127, held that "parol evidence is admissible to show that a writing which is, In form, a complete contract, of which there has been a manual tradition, was not to become a binding contract until the performance of some condition precedent resting in parol." The court, however, said that, to avoid "mistake or imposition, this rule should be cautiously applied, and confined strictly to cases clearly within its reason." A similar ruling was made by the supreme court of New York in the case of Harnickell v. Insurance Co., 40 Hun, 558, which was affirmed in 111 N. Y. 300, 18 N. E 632. See, also, Blewitt v. Boorum, 142 N. Y. 357, 37 N. E. 119. Evidence of this character was held admissible by the supreme court of Maryland in the case of Beall v. Poole, 27 Md. 645, it being there said that: "Where a question is raised as to the existence of a partnership, parol proof proffered to show that the articles of co-partnership was a paper, which it was agreed among those who signed it should not be given up by the party who prepared it, and who himself was not to be...