Home Insurance v. Adler

71 Ala. 516

• Court: Supreme Court of Alabama
• Decided: December 15, 1882
• Status: Published

Opinion

STONE, J.

The appellee — plaintiff below — a resident of Wilcox county, was engaged in merchandise, and obtained insurance on his goods from the appellant, through Kayser, their agent, who had his office in Selma, Alabama. The plaintiff, Adler, had previously obtained two policies from the same company and through the same agent, insuring merchandise in the same storehouse. The first of these policies was issued September 30th, 1876, and expired twelve months afterwards. The sum of insurance secured by this policy was three thousand dollars, and the agreed premium was 2\per cent. The second policy was issued November 5,1877, and expired at noon, November 5, 1878; amount insured two thousand dollars, and rate of premium 2\per oent. A third policy was filled up and signed by Kay-ser, the agent, dated November 19th, 1878, to run for twelve months from 12 o’clock noon of that day. The insurance provided by this policy was fifteen hundred dollars — twelve hundred on the merchandise, and three hundred on the furniture of the assured, who had his residence in the building in which he kept and sold his merchandise; rate of premium the same — 2^per cent. It was proved, and not denied, that Adler, the assured, left his policies of 1876 and 1877 in the custody of Kayser, the agent, for safe keeping, and that the latter kept them locked up in his safe. It will thus be seen that from noon November 5th, 1878, to the 19th day of that month, there was no written policy insuring Adler’s merchandise. 'The store and merchandise, and dwelling and most of the furniture were destroyed by fire about an hour before daybreak on the morning of November 19th, 1878. This was before the policy of that date, for fifteen hundred dollars, was filled up and signed by the agent, Kayser; but the latter did not know of the burning, until after he had so filled up and signed the policy. The present suit is brought to recover for the alleged loss of ■ the merchandise and furniture.

The complaint in the present action contains six counts. The first count (Haims damages on an alleged policy of insurance issued by the defendant company November 5th, 1878, insuring goods, wares and merchandise for one year. The second count claims damages on an alleged agreement of defendant, through its agent, to issue to plaintiff a policy on his merchandise for the same sum, to bear date November 5th, 1878, and to run one year; and that defendant failed and neglected to issue the policy. The third count is on an alleged insurance of two thousand dollars on merchandise, commencing on same date, November 5th, and running one year, without stating the form in which the contract was entered into.' The fourth count charges that defendant corporation insured plaintiff’s merchandise in the sum of two thousand dollars, by its policy issued November 5th, 1877, and to run one year, and agreed to renew the said policy for one year, commencing November 5th, 1878, but failed and neglected to issue the renewal policy. The fifth count, like the third, avers a contract of insurance to commence November 5th, 1878, and to run one year,' but fails to charge whether the contract was in writing or not. The sum averred in this count to have been insured is fifteen hundred dollars, on “ goods, wares and merchandise, household furniture, bedding and wearing apparel.” The sixth count, like the second, de-dares on an agreement to issue a policy, to bear date and run from November 5th, and a neglect and failure to do so ; the amount and subject of insurance the same as in the fifth count. Eacb of these counts avers a consideration, and a loss by the burning, greater in amount than the sum insured. The defendant took issue on the several counts, and does not here question the sufficiency of either. On the contrary, counsel admit that a valid contract of insurance may be made in parol, if all the terms be agreed on. Such certainly is the law.—Mobile Marine Dock & Mut. Ins. Co. v. McMillan, 31 Ala. 711; Ala. G. L. Ins. Co. v. Mayes, 61 Ala. 163. Some of the adjudged cases — perhaps a majority of them — arose on bills in equity, praying, first, specific performance of the agreement to issue the insurance policy. Under these bills, the court having acquired jurisdiction for the alleged purpose of specific performance, retained the cases, as is its wont, and granted to complainants complete redress — such as they would have been entitled to in suits’ on the policies, if remitted to the law forum.—Eames v. Home Ins. Co.,94 U. S. 621; Tayloe v. Mer. Fire Ins. Co., 9 How. (U. S.) 390; Com. Mut. Ins. Co. v. Un. Mut. Ins. Co., 19 How. (U. S.) 318; Ala. Gold life Ins. Co. v. Mayes, 61 Ala. 163. "We need not inquire whether, in the absence of a special equity, a bill should be entertained for the specific performance of a contract in relation to personalty. That question does not arise in this cause. As we have said, counsel in this case admit an action at law may be maintained, if all the terms’of the contract were agreed upon, so as to cover the time of the loss, and the breach consisted in the failure to issue the policy, as agreed on. Many authorities sustain" this view, and we think them sound.—Mobile Marine Dock & Mut. Ins. Co. v. McMillan, 31 Ala. 711; May on Ins. §§ 43 et seq.; Ib. § 565; Ins. Co. v. Colt, 20 Wall. 560; Sanborn v. Fireman’s Ins. Co., 16 Gray, 448; Sheldon v. Conn. Mut. L. Ins. Co., 25 Conn. 207; First Bap. Ch. v. Brooklyn Fire Ins. Co., 18 Barb. 69.

As we have shown, the complaint in the present cause states the plaintiff’s claim in almost every conceivable form: On the policy, as if issued, on an agreement to renew a policy previously issued which expired before the loss, and on an agreement to issue a new policy, differing somewhat from the former one in the subject and amount insured. The policy issued November 5, 1877, and expiring November 5, 1878, was for two thousand dollars insurance on merchandise. If there-was any agreement to insure for the next year, that agreement was entered into between Adler and Kayser, the-agent-, about October 20th, 1S78. Adler and Kayser agree in fixing this as the time. They do not agree in their statement of the subject, or the amount of the insurance. Adler states it was to be a policy insuring his merchandise to the extent of two thousand dollars; in effect, a counterpart or renewal of the policy of 1877. Kayser states the subject and sum of the insurance, pretty much as the same are set forth in the fifth and sixth counts of the complaint. The finding of the jury indicates that they fixed the amount of their verdict at Kayser’s figures. Adler and Kayser agree substantially in this: That, about October 20th, 1878, there was an agreement between them that the defendant insurance company would issue to the plaintiff a policy of insurance, to be issued in the early part of November then following. Sterne, another witness, proves substantially the same thing. We have shown above wherein they differed as to subject and sum. It is not shown that in the alleged agreement of October 20th any thing was said as to the rate of premium, the duration of the policy, or of the payment of the premium. Nor does it appear that any of the stipulations or details of the policy were agreed upon, or mentioned. It is here contended that because the terms and details were not agreed upon, and because the premium was not prepaid, there was no contract made, and there can be no recovery in this action. Such would doubtless be the case, if there had been no previous dealings between them. In this connection comes in the question of the admissibility of the former policies as evidence. It will be borne in mind that Adler, the plaintiff, had previously obtained two policies of insurance on the goods in the same storehouse, from the same agent, and in the same insurance company — “ The Home Insurance Company” of New York. The first policy was issued in 1876, and the second on the 5th November, 1877; each, by their terms, to run a year. It was testified, both by Adler and Kayser, that the premium was not required to be paid, nor was in fact paid in advance. The premium on the policy first issued was afterwards paid in full, in a settlement had between Adler and Kayser. The testimony tends to show that the matter of credit on the premiums rested in a private understanding between Adler and Kayser, the agent, and the latter was in the habit of paying them, and of trusting Adler for reimbursement. They had private dealings with each other at the time. There was contradictory testimony as to notice to Adler, requiring payment of the premium on the second policy. Kayser testifies that policy was cancelled for non-payment of premium, on the 5th of January, 1878, and that Adler paid for only the two months covered by the policy, before it was cancelled. Adler’s testimony tended to show he had paid the whole premium, and he denied all notice or knowledge that any step would be, or was taken for the cancellation of the policy. It was proved, and admitted by Kayser, that long after the alleged cancellation he, Kayser, admitted to Sterne, who was about to sell Adler a bill of goods, that the merchandise of the latter was under insurance. He added, the policy was about to expire, which tends to show he had reference to the policy of 1877, which would, by its terms, expire some fourteen days afterwards. This was the policy ICayser testified had been cancelled nine or ten months previously. We can not perceive how the question of the cancellation vel non of this policy can exert any influence in the determination of this suit, except that it may have some bearing on the credibility of the testimony. It constituted a part of the history of the transaction, and, as such, it was perhaps legitimate testimony.

The conversation alleged to have taken place between Adler and Kayser, about October 20, 1878, would not, unaided, amount tu a valid contract of insurance, or agreement to insure. It wanted very many essential details. There was no mention of the place or house in which the goods were to be insured, of the rate of premium, or where to be paid, or of the duration of the policy, or of many other stipulations and details found in such policies. Looking alone to that conversation, we can not affirm all the terms necessary to consummate such contract were agreed upon. But the parties had had previous dealings in relation to a subject-matter identical in principle. Those dealings showed in what place and house the merchandise was kept, which was covered by the former policies, the rate of premium paid, or to be paid, the length of time — one year — the policy would run, and the many specifications and details embodied in the policies. They also tended to show that in prior dealings between these parties, pre-payment of premium had not been exacted. Proof of these previous dealings would authorize the inference that when Adler requested insurance, and ICayser agreed to issue the policy early in November, all the previous terms were impliedly understood and adopted, except to the extent they expressed and agreed otherwise. The former policies were clearly admissible in evidence. Harkins v. Pope, 10 Ala. 493 ; Crommelin v. Thiess, 31 Ala. 412; Rainey v. Capps, 22 Ala. 288; Wolffe v. Wolff. 69 Ala. 549.

There was another use permitted to be made of the policy of 1876, which was the subject of exception. After the destruction of the goods by fire, but later on the same day, Kayser, the agent, filled up and signed a policy, corresponding to that described in the fifth and sixth counts in the complaint. This he did in ignorance that the goods had been destroyed. He deposited it in his safe. The policies previously issued to Adler had been, at his request, similarly deposited and kept. On the day after the fire, Adler informed ICayser, at his office, that the goods had been burned. The policy was then shown to Adler, and he testified that he read it. He then handed it back to ICayser, and never afterwards saw it. Notice had been properly served on defendant to produce this policy, and also the one issued in 1877. They were not produced, and Adler was examined as to their contents. In giving his evidence, he was allowed to look at the policy of 1876, which he testified corresponded with the other two, and, in that way, to state the contents of those not produced. In Acklen v. Hickman, 63 Ala. 494, we defined two classes of cases, in.which a witness may use a memorandum made by him, or known to him to be correct. The present case is scarcely shown to fall within either class.—See Mims v. Sturdevant, 36 Ala. 636; 1 Greenl. on Ev. §§ 436-7. Nor does this case fall within Mr. Green-leaf’s third class. — Ib. § 437.

Can there be a recovery on either of the written policies ? "We have shown that one of .the policies — the second — expired at 12 o’clock noon, November 5,1878. The third and last policy was issued November 19,1878, and insured the merchandise and goods from 12 noon of that day. Between these dates the goods were burned. There are cases where an application for insurance is made, and the terms agreed on, but the policy is not issued until after the property is destroyed, some time afterwards. In such case, if the policy be so framed as to make the risk take effect from the date of the application— a time before the loss — then a recovery may be had on the policy. This is clearly right, for the policy is but the written evidence of a contract previously entered into. — May on Insurance, § 44; Ins. Co v. Colt, 20 Wall. 560; Sheldon v. Com. Mut. L. Ins. Co., 25 Conn. 207; Lightbody v. Nor. Amer. Ins. Co., 23 Wend. 18; City of Davenport v. P. Fire & Marine Ins. Co., 17 Iowa, 276. The present case, however, is different. The policy was not dated, nor, on its face, was it made to take effect at any time before it was issued. The property claimed to have been insured was burned before the date or issue of the policy. Actions at law, founded on written instruments, can be maintained only on the terms expressed, or interpreted to be expressed or implied in the instrument itself. Parol proof of an anterior agreement, variant from, and not carried into the instrument, can not, in a suit at law on the writing, be the basis of a recovery. There can be no recovery on the facts of this case on either of the written policies shown in the testimony. We may add, however, that if, under the rules stated above, there was an agreement that a policy should be issued in the ea/rly part of November, that would,, ex vi ter-mi/norum, have been in time to cover a loss occurring on the morning of the 19th November.

Objection was made to the admissibility in evidence of two' letters; one from Kayser, tlie agent at Selma, and tbe other from the general southern agency of the insurance company at Atlanta, Georgia. These letters gave notice to Adler of a refusal of the company to pay the alleged loss. They placed the refusal on the express ground, that there was no insurance on the goods when they were destroyed. They made no allusion to the sufficiency or insufficiency of the preliminary proofs of loss. ■ They were competent evidence to go to the jury on the question of waiver of further preliminary proof, or of an implied admission that such proof was sufficient. — May on Insurance, § 569. And such refusal to pay by the resident agent of a foreign insurance company, should have the same effect, direct and incidental, as if made by the company itself.—Code of 1876, § 1434; Piedmont & Arl. Life Ins. Co. v. Young, 58 Ala. 476.

The court did not err in refusing to allow defendant to make oral proof of the contents of the written policy, or any part of it. 'There was no proof of its loss or destruction, or that defendant lay under any disability to produce the policy itself.

The insurance moneys if payable at all, was due and payable at the expiration of two months after proof of loss. Interest' could not begin to run till then. When the proof of loss was furnished, was a question of fact to be found by the jury, and should have been left to them in an appropriate charge.

One of the terms of the policy of 1876 was, “that in the event of loss by fire, the company should not be liable for more than three-fourths of the actual cash market value of the property insured, immediately prior to the loss.” If the terms of the insurance agreed to be taken by the company in the early part of November, 1878, as alleged, were to be, in all non-expressed particulars, the same as those found in the policy of 1876, then this clause should have been given in charge to the jury. The purpose and policy of such clause are, that the assured shall carry one-fourth of the risk. It follows that the plaintiff could not recover for the loss he sustained by the burning more than three-fourths of the actual cash market value of the insured goods that were burned. And this should be stated distributively. The goods, wares and merchandise, it is charged, were insured for twelve hundred dollars. To justify a recovery on this account for the full sum, their actual cash market value, immediately prior to the loss, must have been sixteen hundred dollars. Railing below that sum, the recovery on this account should be scaled down correspondingly. So of the three hundred dollars risk on the furniture, bedding and wearing apparel. To justify a full recovery on this clause, the loss at cash market value must, immediately prior to the burning, have been as much as four hundred dollars. And neither class, if deficient in easb market value, can be supplemented by excessive loss on the other class. It should be stated, that if defendant is held liable, a credit should be allowed for the unpaid premium.

Several rulings of the City Court were opposed to these views. We need not specify them. '

Keversed and remanded.