the Liverpool & London & Globe Ins. Co. Ltd. v. Payton
| Decision Date | 16 April 1917 |
| Docket Number | 306 |
| Citation | 194 S.W. 503,128 Ark. 528 |
| Parties | THE LIVERPOOL & LONDON & GLOBE INS. CO. LTD. v. PAYTON |
| Court | Arkansas Supreme Court |
Appeal from Sebastian Circuit Court, Fort Smith District; Paul Little, Judge; affirmed.
Judgment affirmed.
J. A Watkins and S. M. Wassell, for appellant.
1. No proof of loss was furnished the company or waived by it. 122 Ark. 357; 120 Id. 268.
2. There was a breach of warranty. The answers were untrue and voided the policy. 4 L. R. A. (N. S.) 607; 27 Mich. 429; 177 U.S. 519; 183 Id. 308; 22 S.Ct. 133.
3. No notice was given nor proofs of loss filed within the sixty days. 87 Ark. 171; 72 Id. 484; 84 Id. 224; 91 Id. 43; 88 Id. 120.
4. Instruction No. 7, asked by defendant, should have been given. 82 Ark. 401-2; 57 Id. 279; 58 Id 565, 528; 261 U.S. 613; 14 L. R. A. 297; 16 Id. 33.
5. The contract limited the recovery to three-fourths of the cash value of the property destroyed.
Kimpel & Daily, for appellee.
1. Proof of loss was waived. 122 Ark. 357; 120 Id. 268.
2. The answers in the application were true, and the company can not take advantage of the mistakes of its agents in writing down incorrect answers. Each of the instructions requested by the insurance company ignores the rule that the knowledge and acts of the agent are those of the company, and the company is estopped. 52 Ark. 11; 64 Id. 253; 71 Id 242; Ib. 295; 79 Id. 315; Ib. 270; 81 Id. 509, 206; 102 Id. 151; 108 Id. 261; 79 Id. 315; 52 Id. 11.
3. The policy was for $ 500 and the liability is for that amount. 72 Ark. 368; 75 Id. 409.
This is an action on a fire insurance policy where there was a total loss of the insured building and some of the insured contents and a partial loss of other property insured. The insurance policy was for $ 500 on gin house; $ 1,350 on machinery, such as gin stands, feeders, condensers, presses, elevator, etc., $ 300 on engine, boiler, smokestack, etc.; $ 75 on seed house, and $ 100 on cotton seed while contained in the seed house; making a total of $ 2,325.
There was a recovery below of the sum of $ 1,890.80, which included the full amount of insurance on the building, and the defendant insurance company has appealed. The company defended on the ground that there was a breach of warranty with respect to the statement of the assured in his application concerning the original cost of the personalty covered by the policy, and with respect to the statement of the assured to the effect that no other company had at any time declined to insure the property, or any part of it. Another defense presented is that proof of loss was not furnished within sixty days, as required by the terms of the policy. The issues were submitted to the jury on instructions, the correctness of which is not challenged on this appeal, but it is insisted that according to the undisputed evidence the issues should have been determined in favor of the defendant, and that a peremptory instruction should have been given to the jury.
The property covered by the policy was a gin outfit owned by the plaintiff, J. C. Payton, which was situated at Mansfield, Arkansas, and the policy was negotiated, written and delivered by Mr. W. R. Alexander, the local agent of the company. In the application for insurance there was a question and answer with reference to the building as follows:
There was another question and answer in the application with respect to the engine and boiler, as follows:
It is contended that according to the undisputed evidence these answers were untrue and constituted breaches of the warranty. It is not correct to say that the testimony is undisputed as to the cost of the building, for one of the witnesses testified that it cost $ 900. The evidence establishes the fact that neither the agent of the company, Mr. Alexander, nor Payton, the assured, understood that the question related to the original cost, but they thought that the inquiry was concerning the value of the articles at the time that the policy was written. Mr. Alexander was the agent at Mansfield and walked out to the gin to see the plaintiff about securing the insurance on the property. He testified that he discussed with Payton the question of value of the different items to be incorporated in the policy and made pencil memoranda of what was determined in the negotiations to be the values. It is undisputed that Payton stated to Alexander that the engine and boiler were second-hand articles which Payton had purchased and that as installed in the gin plant were then of the value of $ 1,000. The proof shows that the engine and boiler cost Payton less than that sum, but the jury were warranted in finding that the statement concerning the value of those articles properly installed in the gin was the amount stated in the application. After securing the data from which the application was to be prepared Alexander went back to his office and copied the amounts into the printed application and later presented the application to Payton, who signed it, and it was forwarded to the company.
The evidence shows that Alexander alone was responsible for the mistake in inserting the present value of the articles into the blank for the answer concerning the actual cost. The undisputed evidence shows that Alexander knew that the engine and boiler had been bought second-hand by Payton and it was not claimed that they actually cost the amount inserted in the application. Under those circumstances the agent of the company was responsible for the mistake, and his knowledge was the knowledge of the company, and the company is estopped to plead the incorrect statement in the application as a breach of warranty. People's Fire Ins. Assn. of Arkansas v. Goyne, 79 Ark. 315, 96 S.W. 365.
Counsel for the defendant rely upon decisions of the Supreme Court of the United States holding in substance that an applicant for insurance can not plead estoppel, and thus escape responsibility for untrue statements of facts which he permits an agent of the insurance company to insert in the application by showing that the agent was responsible for the incorrect statement and was actually advised as to the true facts. The cases relied on were fully discussed by this court in the case cited above, and we declined to follow them and declared the law on that subject to be as follows (quoting from the syllabus): "An insurance company may be estopped by the conduct of its agent, acting within the apparent scope of his authority, from availing itself of a false answer to a material question or of any other breach of warranty or violation of the provisions of the application or policy, notwithstanding clauses in the application or policy provide that it shall not be bound by any such conduct of its agent."
The rule thus announced has been followed by this court in numerous cases which are cited on the brief of plaintiff's counsel. Those cases are absolutely decisive of the question now before us, and we are of the opinion that the evidence makes out a clear case of estoppel on the part of the insurance company to plead the breach of warranty caused by the conduct of its own agent.
Another question in the application was this:
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