"Appellant
Sutherland, through his agent, Epley, insured a dwelling
owned by him in the Federal Insurance Company, the appellee
for $ 2,000, which was destroyed by fire, and Sutherland sued
the insurance company for the amount of the policy. At the
conclusion of the testimony the court instructed the jury
peremptorily to return a verdict for the insurance company,
which was done, and judgment entered accordingly, from which
this appeal is prosecuted.
"The
policy was issued February 13, 1907, for a term of three
years. The fire occurred August 8, 1908. The policy contains
the usual ten-day vacancy clause. At the time of the fire the
dwelling had been vacant a little over thirty days. On July
6, 1908, McLeod & Gunter, the agents of the Federal Insurance
Company, with whom the insurance was effected, gave a vacancy
permit for thirty days, and agreed to renew every thirty days
until notified to the contrary. The insurance company defends
on the ground that the vacancy clause was violated; that
McLeod & Gunter, at the time they gave the vacancy permit,
and agreed to renew it every thirty days without further
notice, were not, and had long since ceased to be, the agents
of the company, and without power to make such indorsements.
On the other hand, it is contended for Sutherland that they
were the agents of the company, with power to bind their
principal, so far as this policy was concerned, until he had
actual notice from the company to the contrary, which he did
not have. The controlling facts in the record touching this,
the only question in the case, are as follows:
"At
the time this insurance was effected, McLeod & Gunter were
general fire insurance agents at Hattiesburg, and so
continued up to the time of the fire. At the time this policy
was issued they represented this company and others. On
February 14, 1907, the Federal, for its own convenience, and
without the knowledge or consent of Sutherland or his agent,
Epley, who looked after his rents and insurance, reinsured
this risk and others in the National, and immediately wrote
their agents, McLeod & Gunter, at Hattiesburg, to that
effect, using this language in the letter: 'You will
therefore, on receipt of this letter, immediately cease
acceptances of all new business or renewals on our behalf;
but such policies as have already been issued, where the date
of commencement is subsequent to the present date, may stand
undisturbed, provided same cover risks, acceptable to us. May
I therefore ask you to kindly acknowledge receipt of this
letter, and to return to us by early express your commission
of authority and all unused policies on hand, in order to
facilitate the closing of our agency affairs; also that you
render your account current, with remittances to balance,
promptly, in usual form. All losses occurring after noon
February 14, 1910, should be reported to our reinsurer.'
On April 29, 1907, they wrote McLeod & Gunter again as
follows: 'We have forwarded to our reinsurer, the
National Fire Insurance Company, of Hartford, Conn., all
daily reports and reinsurance schedules of business written
in the state of Mississippi, and would thank you in the
future to refer direct to them all indorsements,
cancellations, and losses.'
"Carroll
& King, another insurance agency at Hattiesburg, represented
the reinsurer, the National Insurance Company. On July 6,
1908, Epley, as agent for Sutherland, applied in the form of
a letter to McLeod & Gunter, as the agents of the Federal
Company, to correct the description of the property, which
was discovered to be wrong, and for a vacancy permit for
thirty days, to be renewed until further notified, of which
letter the following is a copy: 'July 6, 1908. McLeod
Insurance Agency, City--Gentlemen: I understand the insurance
policy which we gave you for Mr. D. J. Sutherland on the
two-story house reads, "Lot 6, Block 8," which
should read, "Lot 7, Block 8." Kindly change the
policy so that it will read "Lot 7, Block 8;" also
send me slip for policy; also inclose vacancy permit for
thirty days, and continue vacancy permit until we notify you,
and, if you receive no notice at the end of thirty days,
continue permit.' After writing this letter Epley saw
McLeod, of McLeod & Gunter, who acknowledged its receipt, and
stated that the indorsements he asked would be made,
including the vacancy permit for thirty days, to be renewed
from time to time as it expired, until further notice from
Epley. A short time before the fire McLeod delivered to Epley
a vacancy permit for thirty days, which was executed by
Carroll & King, agents of the reinsurer, the National, as
follows: 'Indorsement--D. J. Sutherland. Permission is
hereby granted for premises to remain vacant for a period of
thirty (30) days from date of this indorsement. Attached to
and forming part of policy No. 162699 of the Federal
Insurance Co. The Federal Insurance Co., by the National Fire
Ins. Co., Reinsurers, Carroll & King, Agents, per M. D. King.
July 7, 1908.'
"There
is nothing to show that the agent, Epley, read this
indorsement, and Sutherland never saw it until after the
fire, and neither of them knew anything about the
reinsurance, that Carroll & King were the agents of the
National, and that McLeod & Gunter were no longer the agents
of the Federal. On the contrary, the latter, from the time
the policy was issued, up to and after the fire, continued to
hold themselves out as the agents of the Federal. After the
14th of February, 1907, they gave Sutherland a rebate on his
policy, paying him the difference, some fifty odd dollars.
Thirty or forty days before the fire, McLeod approached
Sutherland to renew his policy, thinking it was for only a
term of one year, and ascertained it was a three-year policy;
and after the fire McLeod & Gunter, representing the Federal
Company, undertook to have the loss adjusted, from time to
time reporting progress. In fact, neither Sutherland nor his
agent, Epley, knew any one else in the transaction except
McLeod & Gunter, who held themselves out all the time as
agents of this company."
