New Hampshire Fire Insurance, Co. v. Blakely

• Decision Date: 13 February 1911
• Citation: 134 S.W. 926,97 Ark. 564
• Parties: NEW HAMPSHIRE FIRE INSURANCE, COMPANY v. BLAKELY
• Court: Arkansas Supreme Court

134 S.W. 926

97 Ark. 564

NEW HAMPSHIRE FIRE INSURANCE, COMPANY v. BLAKELY

Supreme Court of Arkansas

February 13, 1911

Appeal from Nevada Circuit Court; Jacob M. Carter, Judge; affirmed.

Affirmed.

Thomas C. McRae, W. V. Tompkins and D. L. McRae, for appellant.

1. When the agent informed Blakely that he had no right to issue other than a builder's risk policy, this charged the church with notice of the limited power of the agent, and the court should have permitted him to answer the question as to what his instructions were. Where one dealing with an agent is aware of instructions modifying or limiting his authority the principal is not bound by an act of the agent outside of the authority as so limited. 2 Am. & Eng. Enc. of L. (3 ed.) 970; 54 C. C. A. 293, 299; 26 Me. 84; 55 Ark. 627; 49 W.Va 437; 42 Wis. 616, 620; 49 Ark. 323. An agency and its scope may not be proved by the declarations of the agent, but may be shown by his testimony. 80 Ark. 228; 90 Ark. 104, 106.

2. The peremptory instruction requested by appellant should have been given. The proof of an oral contract of insurance must be full and clear. Not only must it appear that all the essentials, terms, conditions and stipulations were agreed upon, but it must be shown that it was the understanding and intention of the parties that there should be an oral contract which would for a reasonable or specified time protect the insured, and this intent and understanding must be plainly inferable from the negotiations and surrounding circumstances. Kerr on Insurance, 53.

Hamby & Haynie, for appellee.

1. Fire insurance agents, having authority to write and deliver policies and collect premiums, have power to bind the principal in the issuance of policies, even in violation of the principal's instructions. 63 Ark. 187; 71 Ark. 242; 74 Ark. 72; 88 Ark. 506; 55 L. R. A. 408; 25 Ark. 267.

2. It is true that the evidence does not affirmatvely show that each and every detail of the contract was specified in the oral agreement; but that was not necessary to constitute a valid contract for insurance. 22 L. R. A. 768; 94 U.S. 739 Law. Ed. 298, 300.

3. Oral contracts for insurance are valid and binding. 63 Ark. 204; 67 Ark. 438.

MCCULLOCH, C. J. HART, J., concurs in the judgment.

OPINION

MCCULLOCH, C. J.

Appellees sued appellant to recover on an oral contract of fire insurance, alleged to have been entered into between them and appellant's agent at Prescott, Ark., whereby a certain building and furniture therein were insured against damage or destruction by fire. The policy was not issued, but Blakely, one of appellees, testified that appellant's agent agreed to insure the property in the amount named for a stipulated premium, and to issue a policy in accordance with said agreement. The agent was the cashier of a bank where appellee had money on deposit, and it was the custom of the agent to issue policies to his patrons and present bills for the premiums on the first day of the succeeding month. No question is raised in this case as to the failure to pay the premium, nor is there any question raised as to the authority of the agent to issue policies for appellant or to bind appellant by an oral contract of insurance.

The building which was the subject of the alleged contract of insurance was a church house. It had been completed except putting in the windows and doors, which were to be placed in the building in a few days so as to complete it. The pews and furniture, which were also insured, were in the building. Appellees had a policy of builder's risk insurance in another company, which expired on March 24, 1908, and on that date they applied to appellant's agent for a regular policy. The evidence shows that the rate was $ 1.50 per annum for builder's risk insurance and $ 1.25 per annum for a regular policy.

Blakely testified that Reagan, the agent of the company, first stated that he would not write regular insurance until the doors and windows were put in, but would give him a builder's risk policy at the higher rate; that he told the agent he could get a regular policy elsewhere, and that the agent then agreed to issue the regular policy. Mr. Reagan testified that he did not agree to write the policy, but took a memorandum of the amount of insurance, etc., and agreed to write the policy as soon as Blakely let him know that the windows and doors had been put in the building. This conflict in the testimony must, of course, be treated as settled by the verdict of the jury.

During the course of examination of Mr. Reagan as a witness appellant's counsel offered to propound the following question, which the court on objection of appellees excluded: "What was your instruction from this particular company, and what was your...