Terry v. American Insurance Co.
| Decision Date | 07 April 1925 |
| Docket Number | 35904 |
| Parties | L. TERRY et al., Appellees, v. AMERICAN INSURANCE COMPANY, Appellant |
| Court | Iowa Supreme Court |
OPINION ON REHEARING JANUARY 18, 1927.
Appeal from Allamakee District Court.--W. J. SPRINGER, Judge.
Action by assignee to recover upon a fire insurance policy. Verdict and judgment for plaintiffs. Defendant appeals. (Former opinion 203 N.W. 17.)--Affirmed.
Affirmed.
Sampson & Dillon and G. B. Richter, for appellant.
W. S Hart, for appellee.
This case is before us on rehearing, granted in order that the court might receive additional argument and give further consideration to the question whether the case should have been submitted to the jury.
The main question is whether the purported consent of the defendant to an assignment of the policy before loss, indorsed upon the policy by defendant's agent, is binding on defendant. The policy covered a stock of merchandise and fixtures, and was issued to the then owner, Fett. Fett sold out to plaintiffs, and assigned the policy to them October 1, 1918. Land was defendant's local agent. Land, under date of October 1, 1918, indorsed upon the policy, and signed as agent, defendant's purported consent to the assignment in proper form. Defendant's contention is that Land was only a soliciting agent, and exceeded his authority in giving the consent. Plaintiffs plead the consent as having been made and approved by defendant, and plead also waiver and estoppel. The allegation that the act was performed by the defendant is supported by proof that it was performed through an agent, and the act of the agent ratified. McColl v. Jordan, 200 Iowa 961, 205 N.W. 838; Long v. Osborn, 91 Iowa 160, 59 N.W. 14. We assume, for the purpose of the appeal, that Land was only a soliciting agent, and that, merely as such, he had no authority to consent to the assignment. He was, however, the local agent of the defendant, and the policy was issued through him. A loss occurred October 7, 1918. On the same date, Land notified defendant's general agent thereof, and asked him to send an adjuster. We will, for convenience, speak of the transactions had with the general agent as having been with defendant, as no question arises concerning his authority. On October 11, 1918, defendant referred the loss to Carl Miller, an independent adjuster. Miller proceeded to make a personal inspection and investigation, in the course of which he was shown the assignment and the indorsement of consent. On October 20, 1918, Miller made a written report to the defendant. In this report the plaintiffs were named as those with whom the negotiations for adjustment were being carried on, and who said that the companies would have to settle with their attorney; but in it the assignment and consent were not mentioned, Miller assuming evidently that defendant knew about them. The defendant's claim is that it did not then have such knowledge. On October 23, 1918, Mr. Hart, attorney for the plaintiffs, wrote defendant:
It will be noted at this point that the adjuster employed by the defendant to give attention to this particular loss knew of the assignment of the policy and of the giving in form of defendant's consent thereto by defendant's agent. Defendant also, through its general agent, knew from Mr. Hart's letter that the insured had sold the insured property to plaintiffs and transferred the policy with the property to them, and that it was because thereof that the plaintiffs were claiming the insurance. The knowledge thus acquired by the adjuster was the knowledge of the defendant. Hemmings v. Home Mut. Ins. Assn., 199 Iowa 1311, 203 N.W. 818, and cases cited; Allen v. Phoenix Assur. Co., 14 Idaho 728 (95 P. 829); Western Reciprocal Underwriters' Exch. v. Coon, 38 Okla. 453 (134 P. 22); Corson v. Anchor Mut. F. Ins. Co., 113 Iowa 641, 85 N.W. 806. In its further dealings with the plaintiffs or their attorneys, the defendant was chargeable with the knowledge of Miller and of the general agent, whether those representatives knew of each other's knowledge or not. Smeesters v. New Denmark Mut. H. F. Ins. Co., 177 Wis. 41 (187 N.W. 986). It must be remembered also that Land was the defendant's agent, and acting as such in consenting to the assignment. The case is not that of one acting voluntarily, or an intruder acting wholly without authority, but that of an agent, who, while acting for his principal, is claimed by his principal to have exceeded his authority. The defendant, charged as it was with knowledge of the sale of the insured property and of the assignment to the plaintiffs and the consent given by its agent, and of the fact that the assignee, through such assignment and consent, was claiming the rights of owner and of insured in the property and the loss sustained, and charged with knowledge that its agent had given the consent, and that in doing so he had exceeded his authority (if such was the fact), was put to its election whether to confirm or repudiate its agent's act. The defendant would not be permitted to play fast and loose with the plaintiffs, to blow hot and cold, to recognize the assignment and the policy as being in force, induce the plaintiffs to act accordingly, and later repudiate the act of the agent. If the defendant desired to escape liability for the act of its agent, it was bound to disavow such act promptly after it came to its knowledge. Failure to do so would operate as a ratification. Argus v. Ware & Leland, 155 Iowa 583, 136 N.W. 774; Story County Tr. & Sav. Bank v. Estate of Youtz, 199 Iowa 444, 447, 200 N.W. 700; Windahl v. Vanderwilt, 200 Iowa 816, 823, 203 N.W. 252. In this situation, under date of October 28, 1918, the defendant replied to Mr. Hart's letter as follows:
"This acknowledges receipt your letter of the 23rd relative to claim, loss and damage to the property described under policy No. 94678--R. W. Fett, and in reply beg to say that you will find the policy in question provides the manner and form in which any claim for damage should be made, and if there is any loss and damage claimed or sustained to the property for which claim is made, then such claim should be presented in accordance and with the terms and conditions of the policy."
This letter is a plain recognition of the policy as still in force, and an invitation for the presentment of claim,--that is, proofs of loss in accordance with its terms. The defendant did not, in any communication with plaintiffs or their attorneys, disavow the consent or deny Land's authority or question the continued existence of the policy. It appears from the record that the point of disagreement between the adjusters for the defendant and the other insurance companies, on the one hand, and the plaintiffs, on the other, was the amount of the loss; and it appears from the correspondence between defendant and its adjuster that absence of authority in Land to consent to the assignment was, as between them (not, however, communicated to plaintiff's), to be made use of only in the event that plaintiffs would not make what defendant would regard as a reasonable settlement. In the course of this correspondence, and under date of November 7, 1918, Miller informed defendant specifically of the assignment and consent. On November 9, 1918, defendant wrote the adjuster:
A number of letters between plaintiffs' attorney and the defendant followed, in none of which was there any question or repudiation of Land's consent to the assignment. On December 4, 1918, plaintiffs furnished to defendant proofs of loss. During this period, the negotiations between the company and plaintiffs appear to have been limited to a discussion of the question whether one of the adjusters represented defendant, and the amount of the loss. In the course of this correspondence, defendant, in a letter to Mr. Hart, denied that one Allen was authorized to represent it. In a letter dated December 9, 1918, by defendant to Miller, it says:
On December 10, 1918, Mr. Hart inquired of defendant whether Miller represented it. On December 31, 1918, defendant wrote a letter to plaintiffs as follows:
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