Springfield Fire & Marine Ins. Co. v. Price

• Decision Date: 17 June 1909
• Citation: 64 S.E. 1074,132 Ga. 687
• Parties: SPRINGFIELD FIRE & MARINE INS CO. v. PRICE.
• Court: Georgia Supreme Court

64 S.E. 1074

132 Ga. 687

SPRINGFIELD FIRE & MARINE INS CO. v. PRICE.

Supreme Court of Georgia

June 17, 1909

Syllabus by the Court.

Where a policy of fire insurance contained a stipulation that it should be void if the subject of insurance be a building on ground not owned by the insured in fee simple, but at the time the application for insurance was made the company through its agent, knew that the applicant did not own the land on which the building sought to be insured was situated the company, in defending an action on the policy, will be estopped from setting up the noncompliance of the insured with this condition of the policy.

[Ed Note.-For other cases, see Insurance, Cent. Dig. § 968; Dec Dig. § 378. ^[*] ]

An agent of an insurance company fully authorized to make out and issue policies of insurance has power to employ clerks in the ordinary business of the agency; and, if such clerk solicits insurance, and a policy of insurance is duly issued, knowledge of facts material to the risk acquired by the clerk in the solicitation and prior to the issuance of the policy is notice to the insurance company.

[Ed. Note.-For other cases, see Insurance, Cent. Dig. § 973; Dec. Dig. § 378. ^[*] ]

Reformation is not necessary to avoid the defeat of a policy of insurance on account of any matter in existence at the time of the issuance of the policy, with which the company is charged with knowledge. So, where the duly authorized agent of an insurance company failed to note on the policy containing the stipulation specified in the first headnote that the building which was the subject of insurance was on leased land, the failure of the insured read his policy, and to observe the company's omission in this respect, is not such laches as will defeat his recovery on the policy by destroying the estoppel of the defendant to dispute the validity of the contract of insurance.

[Ed. Note.-For other cases, see Insurance, Cent. Dig. § 968; Dec. Dig. § 378. ^[*] ]

Where a tenant rents land from year to year under a verbal contract with his landlord that, in consideration of the payment of an annual rental, the tenant may occupy the premises and erect thereon a building which is to be the property of the tenant and removable by him, and where such tenant erects a building and in his application for insurance notifies the authorized agent of the insurance company that the building is on "leased ground," such information is sufficient to put the insurance company on notice of the character of his interest in the building, and effectual to estop the insurance company from setting up as a defense the stipulation in the policy that the contract of insurance was to be invalid if the building which was the subject of insurance was not on ground owned by the insured in fee simple.

[Ed. Note.-For other cases, see Insurance, Cent. Dig. § 966; Dec. Dig. 377. ^[*] ]

Error from Superior Court, Chatham County; Paul E. Seabrook, Judge.

Action by L. S. Price against the Springfield Fire & Marine Insurance Company. Judgment for plaintiff, and defendant brings error. Affirmed.

Adams & Adams, for plaintiff in error.

R. R. Richards and Saussy & Saussy, for defendant in error.

EVANS P.J.

This is a suit by L. S. Price against the Springfield Fire & Marine Insurance Company to recover damages sustained by reason of the destruction of two certain buildings described in a policy of insurance issued by the defendant to the plaintiff. The petition contained an equitable feature, in that it sought to reform the policy in case the court should hold that the pleaded facts required reformation of the contract as essential to recovery. The defendant demurred generally and specially, the plaintiff amended to meet the special demurrers, and the court overruled the general demurrer. The case resulted in a verdict for the plaintiff. The court refused a new trial, and the exceptions are to the overruling of the demurrer and the refusal of a new trial.

1. The policy sued on contains a clause that, "if the subject of insurance be a building on ground not owned by the insured in fee simple," the "entire policy, unless otherwise provided by agreement indorsed hereon or added hereto," shall be void. The petition sets out that the ground on which the buildings were situated was not owned by the insured, but that at and before the date of the issuance of the policy a duly authorized agent of the company was informed by the insurer that the buildings upon which insurance was sought were upon leased ground, and the agent of the insurance company was instructed to so note upon the policy, which by accident or mistake he failed to do. The policy also contained the further stipulation that "no officer or other representative of this company shall have power to waive any provision or condition of this policy, except such as by the terms of this policy may be the subject of agreement indorsed hereon or added hereto, and, as to such provisions and conditions, no officer, agent, or representative shall have such power or be deemed or held to have waived such provisions or conditions unless such waiver, if any, shall be written upon or attached hereto, nor shall any privilege or permission affecting the insurance under this policy exist or be claimed by the insured unless so written or attached." The insurance company defends its refusal to pay the amount of damage done the property insured because the buildings were upon ground not owned by the insured. In Johnson v. AEtna Insurance Co., 123 Ga. 404, 51 S.E. 339, 107 Am.St.Rep. 92, it was held that: "Where a policy of fire insurance contained a stipulation that it should be void 'if the subject of insurance be a building on ground not owned by the insured in fee simple,' but at the time the application for insurance was made the company, through its agent, knew that the applicant did not own the land on which the building sought to be insured was situated, it will not be heard in defense to an action on the policy to set up the noncompliance of the plaintiff with this condition of the contract." Restrictions inserted in the contract upon the power of the agent to waive any condition, unless done in a particular manner, do not apply to those conditions which relate to the inception of the contract, where it appears that the agent has delivered it, and received the premiums, with full knowledge of the actual situation. Wood v. American Fire Ins. Co., 149 N.Y. 382, 44 N.E. 80, 52 Am.St.Rep. 733; Mechanics' Ins. Co. v. Mutual Bldg. Ass'n, 98 Ga. 262, 25 S.E. 457; Johnson v. AEtna Ins. Co., supra; 3 Cooley's Briefs on Ins. 2651. From these authorities the conclusion follows that, if notice was given by the insurer to an authorized agent of the company that the buildings insured were upon leased ground prior to the issuance of the policy, the company could not avoid the policy if the proof showed that the buildings were upon leased premises, even if that fact was not noted on the policy.

2. The defendant, however, contends that the person whom the plaintiff notified at the time of the issuance of the policy that his buildings were located on leased ground was not its agent, but was a mere clerk or employé in the office of the company's agent, and that such clerk was not its agent for any purpose. On the trial it was developed that the defendant appointed George S. Haines as its agent, "with full power to receive proposals for insurance against loss or damage by fire in Savannah and vicinity, to receive moneys and countersign, issue, renew, and consent to the transfer of policies of insurance signed by the president and secretary of the said Springfield Fire and Marine Insurance Company subject to the rules and regulations and to such instructions as may from time to time be given by the company." Haines did an insurance business in Savannah, rented and paid for his own offices, and employed and paid his clerks and other help without any participation by the company. He employed N. L. Bedford and J. A. Sullivan in the conduct of his insurance business. Bedford wrote up the forms of policies on the typewriter, filled in the descriptions, etc., and Haines would sign them. Bedford solicited insurance and delivered policies. In December, 1901, he solicited the plaintiff to insure with the defendant the buildings covered by the policy sued on, as plaintiff had his stock and some other buildings insured with defendant. Prior to that time, the plaintiff had had them insured with A. G. Guarard & Sons, and the policy with that agency had noted on it that the buildings were on leased ground. When Bedford solicited this insurance, the plaintiff informed him that the buildings were on leased ground, and requested him to note that fact on the policy, as the Guarard agency had done. Bedford requested that he be furnished with the old policy to write the new one from, which was done. When the policy was delivered by Bedford, the plaintiff asked him if it was all right, and, on being assured it was, placed it in his safe. Later the plaintiff permitted one Andeppa to remodel one of the three buildings covered by the original policy, and insure it for himself, and at that time telephoned the office of Haines to send out a man, and, Sullivan came. The plaintiff testifies that he explained his rights and those of Andeppa to Sullivan, and on March 20, 1902, the old policy was canceled, and a new one issued, covering the two remaining buildings of the plaintiff, insured in the canceled policy. At the expiration of the year, on March 20, 1903, a renewal policy was brought to the plaintiff by Bedford. When this policy was delivered, the plaintiff did not look at it, but placed it in his safe, and never bad occasion to examine it until after the fire,...