Northern Assur. Co. v. J. J. Newman Lumber Co.

• Citation: 63 So. 209,105 Miss. 688
• Decision Date: 13 October 1913
• Docket Number: 16147
• Court: United States State Supreme Court of Mississippi
• Parties: NORTHERN ASSURANCE CO. et al. v. J. J. NEWMAN LUMBER CO

63 So. 209

105 Miss. 688

NORTHERN ASSURANCE CO. et al. v. J. J. NEWMAN LUMBER CO

No. 16147

Supreme Court of Mississippi

October 13, 1913

APPEAL from the chancery court of Adams county, HON. J. S. HICKS Chancellor.

Suit by J. J. Newman Lumber Company against the Northern Assurance Company and others. From a judgment for plaintiff, defendants appeal.

The facts are fully stated in the opinion of the court.

Reversed.

McLaurin Armistead & Brien, attorneys for appellant.

Truly Ratcliff & Truly, attorneys for appellees.

Counsel on both sides filed elaborate briefs, too long for publication.

OPINION

COOK, J.

Appellee began this action in the chancery court of Adams county against appellants, seven insurance companies, on policies written by them, to recover their pro rata of the loss by fire of the lumber plant of appellee at Hattiesburg on the 17th day of March, 1908. The defense of the insurance companies is that the policies were canceled before the fire, either by the insured, or by the mutual agreement of the insured and the insurers. In his finding of facts, the chancellor decreed that the policies had not been canceled before the fire, and that they were valid and binding at the time of the fire. Five of the policies involved were issued October 23, 1907, one November 23, 1907, and the other one February 23, 1908.

All of the policies covered both the Hattiesburg plant No. 1 and the Sumrall plant No. 3, and were obtained by Fulton & Bradbury, insurance brokers, of Scranton, Pa., and were written by the insurance agency of McLeod & Gunter and the McLeod Insurance Agency, of Hattiesburg, Miss. When these policies were written, it was the understanding between the insured and the agent for the insurers that certain improvements should be made by appellee for the purpose of reducing the hazard, and unless this was done that an advance in rate and a change in the form of the risk would be attached to each policy. At the time these policies were issued, there were a number of other policies issued in other agencies and in other companies, and the same agreement was had about improvements with the agents of other companies. All of the insurance was obtained by the same brokers, Fulton & Bradbury, of Scranton, Pa. On November 23, 1907, Fulton & Bradbury wrote a letter to the Mcleod agency at Hattiesburg, viz.:

"Scranton, Pa., November 23, 1907.

"Messrs. McLeod & Gunter, Hattiesburg, Mississippi --Gentlemen: We telegraphed you last night as follows: 'Improvements at Newman Hattiesburg plant all completed, except dry kilns and planing mill. Rating company suggests that policies be not issued till improvements all finished. Mr. Major desires a few days' more time. Kindly call at Newman office Saturday morning and indorse on binders they now have thirty day extension. Lines on other plant to follow.' We had to do this, as the rating company preferred not to have policies issued until the improvements are all completed. We were sorry to have to trouble you to extend the binder; but Mr. Major requested that it be done, and we could not see any way out of it. We think, however, that it will only be for a few days, as Mr. Major informs us that the work that is yet to be done is progressing, and we hope that it will only be a small portion of the thirty days before they are finished. You can rest assured we will do everything possible to hurry the matter, and trust that you will bear with the assured and all concerned for a little while longer. We might say that we had a case of this kind ourselves regarding a street railway line, which we kept binding for nearly six months, and then the companies allowed us to use the reduced rates by dating the policies back for six months; but in the case of the Newmans we certainly think that they will not keep you waiting but a few days longer, when we will have the rates named and advise you to write up the policies. We are glad to be able to send you an order for twenty-five thousand dollars on the new No. 3 plant, which we wired you to day, and hope from now on we will have orders to give you right along on the different plants of this company, and to be able in some way to return the favor for your many kind considerations to us and the assured in making the extensions of the binder to-day, as requested. Again thanking you for your kind considerations, we are, yours truly,

"C W F/A. M.

FULTON & BRADBURY."

On March 8, 1908, Fulton & Bradbury wired the McLeod Agency as follows:

"Scranton, Pa. Mch. 9-- 08.

"McLeod & Gunter, Hbg. Miss. Reference Hattiesburg and Sumrall Newman policies assured will accept no change in forms or rates wire us immediately if your policies will hold as originally written.

"11 26 Am.

FULTON & BRADBURY."

To this telegram, McLeod Agency replied by wire as follows:

"Hattiesburg, Miss., March 9, 1908.

"To Fulton & Bradbury, Scranton, Pa. Our companies demand change in form and advance in rate.

"MCLEOD INSURANCE AGENCY."

March 11, 1908, Fulton & Bradbury wrote the following letter to the Hattiesburg Agency:

"Scranton Pa., March 11, 1908.

"Messrs McLeod & Gunter, Hattiesburg, Mississippi--Gentlemen: The writer finds that it will be impossible to go to Hattiesburg this month as intended. Referring to your telegram of the 9th instant, would say that we are very sorry that you did not advise us at the time you took the matter up with the Newman people regarding change in form and advance in rate, as they will not stand for any of these changes; and as you say in your telegram that your companies demand the advance in rate and change of form, there is nothing left to do but cancel the policies pro rata, as the other agents have done. The other agents gave us until March 1st to decide whether it would be an advance in rate or cancellation, as they said they wanted to know by that time, so as to be able to return their policies and get credit for same in their February account. As you did not do this, it complicates the matter still further, and we are at a loss to know how best to handle the situation. As it may be that you paid for these policies, which will have to be canceled, we inclose herewith a thirty-day acceptance with eight per cent. interest added for you to use in case you have paid your companies for these policies and cannot get credit for the return premiums until next month. We explained the matter to our bank, and told them that the policies would be canceled, for which our check to you for six hundred and seventeen dollars and ninety cents was payment; and, this being the case, we asked them to return the check not paid. As we said before, we wish that you had told us last month that your companies demanded the extra premium and change of form, as in the case of the other agents, so that the matter would not be complicated as it is now. We want to be perfectly fair, and you will notice that we have included the interest in the acceptance, so that you will not be out anything, and all you will be required to do is to sign the acceptance and use it in your bank until you get credit for your return premiums next month--in case you have already paid for this business. Of course, it seems a little strange to us why you would change the forms and advance the rates on these policies without first conferring with us, but we learned that some special...