Stephenson v. Allison

• Decision Date: 03 February 1910
• Citation: 165 Ala. 238,51 So. 622
• Parties: STEPHENSON v. ALLISON.
• Court: Alabama Supreme Court

51 So. 622

165 Ala. 238

STEPHENSON v. ALLISON.

Supreme Court of Alabama

February 3, 1910

Appeal from Circuit Court, Morgan County; D. W. Speake, Judge.

Action by R. L. Stephenson against E. H. Allison in justice court. There was a judgment for defendant on appeal to the circuit court, and plaintiff appeals. Reversed.

E. W Godbey, for appellant.

Callahan & Harris, for appellee.

SAYRE J.

Plaintiff in error and in the court below sued as trustee in bankruptcy of the firm of Johnson & McDonald. In the circuit court, on appeal from the judgment of a justice of the peace, there was judgment for the defendant. Defendant admitted the indebtedness sued upon, but sought to avoid liability by showing an accord and satisfaction, in that, pursuant to an agreement to that effect, he had issued to plaintiff a policy of fire insurance in a company for which he was agent, had assumed responsibility for the premium in settlement of the account, and in his settlement with his company at the end of the month then current had been charged with the premium. The agreement was made in August, 1906, when the account was presented for payment, and was written across the face of the account as follows: "Balance of account $10.00, which is to be taken up in insurance on policy now with Watson, Bowles & Curry, which will be taken out June 7, 1907. Johnson &amp McDonald." The agreement must be held to have contemplated a policy on such terms as were usually employed in such cases. June 4, 1907, agreeably to the contract for the discharge of the account in all substantial respects, so far as we can see, defendant wrote a policy in the Germania Insurance Company, insuring plaintiff's assignors against loss by fire. The evidence rather points to the conclusion that the policy was retained in the possession of the defendant; but he held it for the insured. A contract of fire insurance is complete when it appears that the terms of the contract have been settled by the concurrent assent of the parties, and nothing remains to be done but to deliver the policy. The actual delivery is not essential to its completion. The insurer is considered as holding it for the benefit of the assured. Flanders on Fire Ins. 104. The general rule is that delivery to the agent is delivery to the insured and is sufficient to put the insurance into effect though the agent retains the policy in his own keeping. Cooley's Briefs, 442-449; Ph nix Assurance Co. v. McAuthor, 116 Ala. 659, 22 So. 903, 67 Am. St. Rep. 154. We do not doubt that there was a constructive delivery of the policy according to the intent of the parties, and that, if a loss had occurred prior to cancellation, insured could have maintained his suit to recover.

But on July 4, 1907, plaintiff's assignors having become insolvent and having been put into bankruptcy, defendant, as agent for the company and in pursuance of the right reserved by the company, canceled the policy of insurance, whereupon the insured became entitled to the return of a certain proportion of the premium as unearned. Defendant drew for this unearned premium, and got credit for it with his company. This was admitted by the defendant. After the argument, and while the court was delivering its opinion, the plaintiff moved for leave to file amendatory counts. We infer from the argument submitted by the appellant that the purpose of the proposed amendments was to secure a recovery of the unearned premium. We have not been favored by appellee with any statement of the objections taken to the amendments. These amendatory counts differed from the original only in...