Roberta Mfg. Co. v. Royal Exchange Assur. Co.

• Decision Date: 20 December 1912
• Parties: ROBERTA MFG. CO. v. ROYAL EXCHANGE ASSUR. CO. et al.
• Court: North Carolina Supreme Court

76 S.E. 865

161 N.C. 88

ROBERTA MFG. CO. v. ROYAL EXCHANGE ASSUR. CO. et al.

Supreme Court of North Carolina

December 20, 1912

Appeal from Superior Court, Mecklenburg County; Lyon, Judge.

Action by the Roberta Manufacturing Company against the Royal Exchange Assurance Company and others. There was judgment for plaintiff in favor of some of the defendants, and plaintiff and such defendants appeal from so much of the judgment as dismissed the action as to other defendants. Affirmed.

Where insured refused to accept a fire policy unless the premium was reduced, the policy could not be delivered so as to render the policy valid unless the premium had been reduced.

This is an action to recover upon divers policies of insurance, 11 in number, alleged to have been issued by the defendants to the plaintiff on its property, which was destroyed by fire on December 25, 1910. Five of these policies were alleged to have been issued by the Royal Exchange Assurance Company and its four associates on November 26, 1910, the said companies being, at the time, represented by C. N. G. Butt & Co., an insurance agency at Charlotte, N. C., and their policies have, by consent and for convenience, been called the "Charlotte policies," and will be so styled in the discussion of the case, and the other policies, called the "Concord policies," and hereinafter styled as such were issued by the insurance agency of Jno. K Patterson & Co., at Concord, N.C. E. F. White, of Concord, was a member of the insurance firm of Jno. K. Patterson & Co., and also secretary and treasurer of the Roberta Manufacturing Company plaintiff in this case. John C. Rankin was its president, and S. M. Robinson was a director, and had joint control and management of the plaintiff's affairs with John C Rankin. At the request of White, policies to the amount of $40,000 were made out by Jno. K. Patterson & Co., and afterwards other policies to the amount of $20,000 were similarly made out by them, and all of them handed to White who placed them in the drawer of the desk which was in the office of Patterson & Co. Issues were submitted to the jury and answered as follows: "(1) Were the Charlotte policies delivered to plaintiff by the Charlotte companies? Answer: Yes. (2) Were they accepted before the fire by plaintiff? Answer: Yes. (3) Had they been canceled at the time of the fire? Answer: No. (4) Were the Concord policies delivered to plaintiff by the Concord companies? Answer: Yes. (5) Were they accepted by plaintiff before the fire? Answer: Yes. (6) Was E. F. White plaintiff's secretary and treasurer and also agent of the Concord companies when the Concord policies were written? Answer: Yes. (7) Did he so continue up to and after the fire? Answer: Yes. (8) Are the Concord companies estopped from setting up as a defense White's double agency at the time said policies were issued or accepted? Answer: No. (9) Did the Concord companies by their conduct or course of dealing prior to the issuing of these policies authorize their agents to issue these policies to plaintiffs through White, and thereby waive their right to defend on the ground that said policies were invalid because White was agent of both insurer and insured? Answer: Yes. (10) Were the Concord policies in force at the time of the fire? Answer: Yes." The Concord companies made a motion to strike out the verdict on the fourth, fifth, ninth, and tenth issues. Plaintiff gave notice of a motion that, if any part of this motion was sustained, it would move to strike out the answers to the sixth, seventh, and eighth issues. The court sustained the motion of the Concord companies, and struck out the findings of the jury on the fourth, fifth, ninth, and tenth issues and, on motion of counsel for the Concord companies, dismissed the action, as to them, under the statute. It also overruled plaintiff's motion for judgment against all the defendants, set aside the findings against the Concord companies for insufficiency of evidence to sustain the same, as matter of law and not as matter of discretion, and refused a new trial to the Charlotte companies on their motion. Judgment was rendered for the plaintiff against the Charlotte companies for the full amount sued for, and in favor of the Concord companies, dismissing said action as to them, with costs against plaintiff. Plaintiff and the Charlotte companies appealed.

Burwell & Cansler, of Charlotte, for plaintiff.

Tillett & Guthrie, of Charlotte, and A. C. King, of Atlanta, Ga., for Concord companies. Osborne & Cocke and W. S. O'B. Robinson, Jr., all of Charlotte, for Charlotte companies.

WALKER J. (after stating the facts as above).

The decisive question in this case is whether the Concord policies were delivered so as to become effectual as insurance contracts. Counsel for the Charlotte companies virtually, or at least tacitly, conceded, as we think very properly, that the Charlotte policies had been accepted by the plaintiff and were in force at the time of the fire which destroyed the insured property. If anything besides this frank admission were needed to show the fact, the letter of Mr. Griffith, of the firm of C. N. G. Butt & Co., to S. M. Robinson, dated December 17, 1910, and referring to the carbon copy of a letter from S. M. Robinson to E. F. White, dated December 15, 1910, would be sufficient of itself to establish conclusively the delivery by C. N. G. Butt & Co. and the acceptance by the plaintiff of the Charlotte policies. In his letter, as we have said, Griffith refers to the inclosed carbon copy of Robinson's letter to White, in which Robinson, for himself and Rankin, and acting for the plaintiff, declines to accept the Concord policies, and notifies White to cancel them, "so as to leave the business in the hands of C. N. G. Butt & Co., where I find it rightly belongs." With reference to this statement, Griffith, in his letter to Robinson, approves what Robinson had said in his letter to White in these words: "I have read with much interest the carbon copy of letter to Mr. White. I am glad you have taken the position you have, and that you will let the insurance remain with us. I return herewith letter as requested, together with bill. If it is not convenient to pay now, we will take care of same."

With this matter out of the way, we turn our attention to the delivery of the Concord policies. We attach no great importance to the fact that they remained in the actual possession of White--that is, in the drawer of the desk--from the time he got them from Patterson & Co. to the day of the fire and afterwards; for, if they were intended by the parties to be valid and subsisting contracts of insurance, the manual delivery of them to the plaintiff, or to the party authorized to represent it, was not essential to make them binding upon the companies. "In the absence of any other evidence to show assent of the company to the making of a contract of insurance, delivery of the policy must be shown. But where a policy has been duly executed in compliance with an application on the part of the insured, so that the minds of the parties have fully met as to the terms and conditions of the contract, a manual delivery of the policy to the insured is not essential to render it binding on the company." 19 Cyc. p. 603. If the policy has been put into the hands of the company's agent, to be delivered to the insured, and nothing remains but to make such delivery, without any further action on the part of the insured being necessary, except the mere formal act of receiving the policy, then their agent is presumed to hold the policy for the insured, and the contract is complete and binding. Insurance Co. v. Colt, 20 Wall. 560, 22 L.Ed. 423; Wheeler v. Insurance Co., 131 Mass. 1; Dibble v. Assurance Co., 70 Mich. 1, 37 N.W. 704, 14 Am. St. Rep. 470; Insurance Co. v. Meier, 28 Neb. 124, 44 N.W. 97; Morrison v. Insurance Co., 64 N.H. 137, 7 A. 378; Hallock v. Insurance Co., 26 N. J. Law, 268; Machine Co. v. Insurance Co., 50 Ohio St. 549, 35 N.E. 1060, 22 L. R. A. 768.

The fact that White had physical possession of the Concord policies, of course, throws light upon the other question, as to whether they had been issued by the Concord companies and accepted by the plaintiff. Our view of the case also eliminates another question, whether, if the Concord policies had been duly issued and accepted, the dual agency of White, who, in a measure, represented the plaintiff, and also the Concord companies, would have the effect of invalidating the policies.

This brings us to consider whether the Concord policies had been delivered and were in force when the fire occurred. Looking at the entire evidence, and considering it most favorably for the plaintiff, and for the Charlotte companies, the indisputable facts of the case lead us irresistibly to the conclusion that there was no such delivery of the policies as the law requires to complete the contract of insurance and impose liability upon the companies.

It is of course, true that a policy issued by an insurance agent, without the knowledge or consent of either party, is not valid. 19 Cyc. 625; Insurance Co. v. Turnbull, 86 Ky. 230, 5 S.W. 542. "To constitute any contract, there must be a proposal by one party and an acceptance by the other, resulting in an obligation resting upon one or both, or, in other words, there must be a promise." Bailey v. Rutjes, 86 N.C. at page 520; Pollock on Contracts, 5. The property to be insured was worth $70,000. The Concord companies had before tried to get the insurance, but it was given to the Charlotte companies; C. N. G. Butt & Co., their agents, having procured better rates than were offered by the Concord companies. The policies issued by the Charlotte agency were about to expire, and renewals were issued...