Southern States Fire Ins. Co. of Birmingham v. Kronenberg, 6 Div. 165

• Court: Supreme Court of Alabama
• Writing for the Court: THOMAS, J.
• Citation: 74 So. 63,199 Ala. 164
• Docket Number: 6 Div. 165
• Decision Date: 01 February 1917
• Parties: SOUTHERN STATES FIRE INS. CO. OF BIRMINGHAM v. KRONENBERG.

74 So. 63

199 Ala. 164

SOUTHERN STATES FIRE INS. CO. OF BIRMINGHAM
v.
KRONENBERG.

6 Div. 165

Supreme Court of Alabama

February 1, 1917

Appeal from City Court of Birmingham; H.A. Sharpe, Judge.

Action by I.A. Kronenberg, as assignee, against the Southern States Fire Insurance Company of Birmingham, upon a fire insurance policy. Judgment for plaintiff, and defendant appeals. Affirmed.

Assignments Nos. 14 to 18, inclusive, are as follows:

(14) Overruling appellant's objection to the following question propounded by appellee to witness J.P. Hazzard

"Don't you also examine the rate of premiums which was charged on the policy when you stamp it?"

(15) "Don't the Southeastern Underwriters' Association, the association which fixes the rate of insurance?"

(16) "Now, Mr. Hazzard, isn't it a fact that this--as to what your duties were in there, to get it before the jury, you were representing the Southeastern Tariff Association, and policies of insurance were sent by different companies through your office; the stamping consisting of putting a stamp on it, if the rate that you checked up compared with the established rate, but if it did not you took some other action?"

(17) "State whether or not the Southern States Fire Insurance Company objected to the proceedings on your part of stamping the policies as you have testified and mailing the daily report to the company."

(18) Answer to last question: "I don't remember of any objection."

The following charges were refused to defendant:

(1) General affirmative charge.

(2 and 4) Same.

(B) I charge you that the burden of proof is on plaintiff to satisfy you of the proof of the matters set up as a waiver; and, unless you are reasonably satisfied from the evidence that plaintiff has proven one of its replications, your verdict must be for defendant.

(38) I charge you that in order to constitute a waiver of the violation of a warranty in the policy sued on, which would defeat such policy, such waiver must have been made by defendant, or by an agent duly authorized to make such waiver with knowledge of the alleged violation.

(15) I charge you that, in order to constitute a waiver of any violation of the policy sued on which would defeat such policy, such waiver must have been made by an agent of defendant with authority to make such waiver.

(4) If defendant had left in the hands of the Southern Adjustment Bureau the matter of handling the adjustment of the loss under the policy sued on, no act of any other agent of such company would be sufficient to constitute a waiver of any violation of the policy by the assured, unless such agent was expressly authorized to make such waiver, or did so with the acquiescence of defendant.

(D) Unless you are reasonably satisfied from the evidence that the Southern Adjustment Bureau, after knowledge of the violation of the policy sued on, recognized and treated such policy as valid and binding, and adjusted the loss and damage under said policy, then your verdict must be for defendant.

Other matters sufficiently appear.

Tillman, Bradley & Morrow and P.P. Waldrop, all of Birmingham, for appellant.

Samuel B. Stern and John T. Glover, both of Birmingham, for appellee.

THOMAS, J.

This action was brought by the plaintiff on a policy of fire insurance, whereby the defendant insured certain [74 So. 66] stock of merchandise of the Republic Dry Goods Company at Republic, Ala.

Plaintiff avers the destruction by fire of the insured property on October 24, 1913; that the interest of the assured in and to said policy of insurance and the proceeds thereof was assigned to plaintiff; and that he is the owner thereof. In addition to the amount of the policy, the plaintiff claims 25 per cent. penalty on account of membership in, or connection with, the Southeastern Underwriters' Association, in accordance with sections 4594 and 4595 of the Code of Alabama, as amended by an act approved April 7, 1911 (Gen.Acts 1911, p. 316).

The defendant pleaded the general issue, and several special pleas averring different breaches of the warranty contained in that part of the policy known as the "iron-safe clause." In this clause the assured warranted that a set of books, presenting a complete record and inventory of all purchases, sales, shipments, and stock on hand at all times, would be kept by assured in a place not exposed to fire, and securely locked in a fireproof safe at night, and that in case of loss such books would be produced for the inspection of the insuring company; and agreed that, in the event of failure to produce such set of books and inventories, the policy should become null and void.

The plaintiff filed replications, in which a waiver of the defense pleaded was averred. The first replication set up an alleged waiver by one M.J. Harper, the agent of defendant who wrote the policy sued on, in that such agent, "with full power and authority on behalf of the defendant, *** made an adjustment of said loss and damage with the Republic Dry Goods Company, Inc., *** after having been fully informed in every particular as to how and when *** the assured had violated the terms, conditions, covenants, and warranties of the policy sued on, recognized and treated said policy as binding and valid, and promised to pay to the assured *** the sum of $1,500 in full payment of the demand herein sued for." The second replication averred a similar waiver by the Southern Adjustment Bureau, acting for defendant. The third replication was like unto the second, except that, in addition to the allegation of waiver by the Southern Adjustment Bureau, it contained the averment that M.J. Harper, with full power and authority to bind the defendant, promised that the defendant would pay the alleged adjustment made by the Southern Adjustment Bureau.

No error was committed in overruling the demurrers to the replications.

The facts averred in defendant's pleas were admitted by the plaintiff's witness B. Zavello, manager of the Republic Dry Goods Company, and the evidence presents no contradiction to the pleas.

As to the replications of the plaintiff, it was undisputed that Mr. Zavello, after the fire in question, went to the office of M.J. Harper, said agent, and that Mr. Harper sent him to the Southern Adjustment Bureau, where the matter of claim of loss was taken up. On questioning by the agents of the adjustment bureau, Mr. Zavello stated that the books of the assured had burned; and it was thus ascertained that the warranty in the policy of insurance had been violated. Thereupon a nonwaiver agreement was presented to Mr. Zavello for signature before proceeding further in regard to the adjustment of the claim of loss. The matter of signing the nonwaiver agreement was discussed on several occasions by the parties, but in the end it was not signed.

The testimony as to the waiver set up in the several replications was in conflict. The burden of proof was on the plaintiff as to this waiver. Ala. State Mut. Ass. Co. v. Long, etc., Co., 123 Ala. 667, 677, 678, 26 So. 655; B.R.L. & P. Co. v. Washington, 192 Ala. 617, 69 So. 65.

A disputed question of the authority of the agent to receive the notice, or to waive a breach of the contract provisions of the policy, is for the jury. Cont. Ins. Co. v. Parkes, 142 Ala. 650, 39 So. 24; Robinson v. AEtna Fire Ins. Co., 128 Ala. 477, 30 So. 665; Ray v. Fidelity Fire Ins. Co., 187 Ala. 91, 96, 65 So. 536; Penn Fire Ins. Co. v. Draper, 187 Ala. 103, 65 So. 923.

The effect of the nonwaiver agreement has heretofore been declared by this court. Queen Ins. Co. v. Young, 86 Ala. 424, 5 So. 116, 11 Am.St.Rep. 51; Day v. Home Ins. Co., 177 Ala. 600, 58 So. 549, 40 L.R.A. (N.S.) 652; Penn Fire Ins. Co. v. Draper, supra.

As to the "iron-safe clause," there is no conflict in the evidence that insured did not comply with this provision of the policy. However, three questions are presented under the evidence: (1) Did defendant know of this failure of compliance before the fire damage, and waive compliance by acquiescence? (2) If this fact was known to defendant's agent, was he such agent with authority to bind the company by such acquiescence? (3) Did the insurer, after the destruction of the property, with knowledge of the breach of this clause of its policy acquired subsequent to the loss, by act, conduct, or declaration, in the attempted adjustment of the claim for the loss, waive said contract provisions?

Insurance companies have the right to employ agents with general or limited authority, as they may choose, and as the nature of the business or the duties of the agency require....