Tacoma Lumber & Shingle Co. v. Fireman's Fund Ins. Co.

• Decision Date: 20 August 1915
• Docket Number: 12572.
• Citation: 151 P. 91,87 Wash. 79
• Court: Washington Supreme Court
• Parties: TACOMA LUMBER & SHINGLE CO. et al. v. FIREMAN'S FUND INS. CO.

151 P. 91

87 Wash. 79

TACOMA LUMBER & SHINGLE CO. et al. v. FIREMAN'S FUND INS. CO.

No. 12572.

Supreme Court of Washington

August 20, 1915

Department 2. Appeal from Superior Court, Snohomish County; Ralph C Bell, Judge.

Action by the Tacoma Lumber & Shingle Company and another against the Fireman's Fund Insurance Company. From a judgment for plaintiffs, defendant appeals. Reversed and remanded with directions to dismiss.

Granger & Clarke, of Seattle, for appellant.

Chas J. Dobbs and Herr, Bayley & Wilson, all of Seattle, and John E. Gallagher, of Tacoma, for respondents.

MORRIS C.J.

Appeal from a judgment sustaining a recovery upon a fire insurance policy. The facts are about these: On May 19, 1912, Calhoun Denny & Ewing, agents at Seattle for several fire insurance companies, including the Royal Insurance Company and appellant, wrote a policy in the Royal Insurance Company covering the property of respondent, and delivered the same to it. About the last of August a special agent of the Royal Insurance Company instructed Calhoun, Denny & Ewing to cancel this policy. Mr. Arnold, manager of the insurance department of Calhoun, Denny & Ewing, sought to inform respondent by telephone at Tacoma, its place of business, of this cancellation, but did not succeed in getting in touch with any one representing it. The next day Arnold went to Tacoma to give personal notice of the cancellation, but found no one upon whom he could serve notice. He then returned to Seattle and instructed One of the clerks in the office of Calhoun, Denny & Ewing to cancel the Royal policy and rewrite the insurance in the appellant company. These instructions were carried out the next day, and the policy handed Mr. Calhoun for signature. The policy was dated August 31st, and on the same day the property was destroyed by fire. The policy was delivered to respondent on September 3d, and on the same day Calhoun, Denny & Ewing learned of the fire. At the time of the delivery of the policy to respondent a request was made for the surrender of the Royal Insurance Company policy, which request was not complied with; the policy being in possession of a bank at Everett, and its surrender being refused upon a claim of interest in the loss.

It is evident that no notice of cancellation was given respondent and that it had no knowledge of the attempted cancellation of the Royal policy and the substitution of the Fireman's Fund policy until after the fire. Section 108 of the Insurance Code (section 6059-108, 3 Rem. & Bal. Code) provides for the cancellation of insurance policies only upon the giving of five days' notice to the insured. The policy issued by the Royal Insurance Company contained a like provision. Not having complied with the law nor its own stipulation as to cancellation, the Royal policy was still in force at the time of the fire, and, as the policy of appellant was intended to take effect only upon cancellation of the Royal policy, it follows that it never became effectual. We cannot subscribe to the doctrine that a fire insurance agent is such an agent of the insured that notice to him of the cancellation of a policy by the insurer is notice to the insured, nor that an attempt to cancel a policy pursuant to such notice without compliance with the terms of the statute or the stipulations of the policy will work a cancellation. The protection of an insurance policy would be precarious indeed if such should be held to be the law. Neither reason nor authority will sustain such a contention. Stebbins v. Lancashire Ins. Co., 60 N.H. 65; Waterloo Lumber Co. v. Des Moines Ins. Co., 158 Iowa, 563, 138 N.W. 504, 51 L. R. A. (N. S.) 539; Johnson v. North British & Mercantile Ins. Co., 66 Ohio St. 6, 63 N.E. 610-612; John R. Davis Lumber Co. v. Hartford Ins. Co., 95 Wis. 226, 70 N.W. 84-88, 37 L. R. A. 131; Commercial Union Assurance Co. v. State, 113 Ind. 331, 15 N.E. 518; Quong Tue Sing v. Anglo-Nevada...