King v. Cox

37 S.W. 877, 63 Ark. 204, 1896 Ark. LEXIS 274

• Court: Supreme Court of Arkansas
• Decided: November 14, 1896
• Status: Published

Opinion

Hughes, J.,

(after stating the facts.) The policy w]1ic]1 was to be renewed according to the parol contract was, of course, to be upon the same terms and conditions as the one that expired on the 27th day of December, 1892, numbered 31,162. It is contended by counsel for appellant that the oral agreement to renew the policy was invalid; that the contract, to be binding, should have been in writing. But in this, we think, the counsel are mistaken. An oral contract for insurance is not within the statute of frauds, and if supported by a valuable consideration, and free from fraud, and made by competent parties, is binding, though the premium be not paid at the time, if credit be given, or it appears from the circumstances and the.situation of the parties that payment of the premium at the time was not exacted. Ellis v. Ins. Co., 50 N. Y. 405; Trustees v. Ins. Co., 19 N. Y. 306; Angell v. Ins. Co., 59 N. Y. 171; Gans v. Ins. Co., 43 Wis. 108; Putnam v. Ins. Co., 123 Mass. 324; Goldwater v. Ins. Co., 39 Hun., 176; 1 May on Ins., sec. 126; Southern Ins. Co. v. Booker, 9 Heisk. 606; Steen v. Ins. Co., 89 N. Y. 315; Union Ins. Co. v. McKookey, 33 Ohio St. 555; Taylor v. Ins. Co., 2 Dill. 282; Scott v. Ins. Co., 53 Wis. 238.

It is also insisted that the policy was void, or that ■ the agreement for it was void, because of the violation or falsity of the representation and warranty that Cox & Denton made, when they said they were the absolute owners of the house and lot, whereas they had sold it to Cox, an individual — a member of the firm. But the evidence shows that they had consented to the sale, and knew, when the contract for renewal was made, that it had been so sold and conveyed. They thereby are precluded from insisting upon a forfeiture by reason of this. They waived it. Insurance Co. v. Brodie, 52 Ark. 11. The agent knew it and his knowledge was the company’s. We think the proof in the case shows that King Brothers were the general agents of the insurance company, with power to make contracts of insurance and to issue policies, and that they had the power to make this contract of insurance, and that they did make it. They had the power therefore to waive the forfeiture (as they did) by reason of the fact that the company had consented through them, as general agents, to the sale and conveyance by Cox & Denton of the store house and lot to Cox.

But it is urged that the warranty that the house and lot were free from incumbrance, according to the evidence, was broken, as there existed at the time the oral agreement was made an equitable mortgage upon the property, in the shape of a vendor’s lien for purchase money, and that this, according to the express terms and stipulations of the policy, rendered the entire policy void. To support the contention, counsel cite, Providence Life Assurance Society v. Reutlinger, 58 Ark. 528; 1 May on Ins., sec. 290; N. Y. Life Ins. Co. v. Fletcher, 117 U. S. 519; Loehner v. Home Mutual Ins. Co., 17 Mo. 247. If there was no waiver of this in-cumbrance, the contention is well founded. But “assent given by an insurance company to a sale of the ‘insured property amounts to an assent to the terms of sale, although the company did not know till after the loss that the terms provided for the execution of a mortgage to secure the purchase money.” 1 Wood on Pire Ins., sec. 330; Farmers' Ins. Co. v. Ashton, 31 Ohio St. 477. In this case the insurance company waived the sale of the property insured, and also the existence of the lien for the purchase money, knowing as they did of the sale before entering into the agreement to renew the policy.

Inability of agent.

As we have held that King Brothers were the general agents o£ the insurance company, and that they as such agents bound the company, and were acting within the scope of their authority, it follows that the insurance company is bound, but that King Brothers are not.

The judgment as_ to King Brothers is reversed, and the cause dismissed as to them, but as to the insurance company it is affirmed.