Queen Insurance Co. of America v. Hartwell Ice & Laundry Co. , 7 Ga. App. 787 ( 1910 )

Hill, C. J.

(After stating the foregoing facts.)

1. It is manifest that Linder, as president of the Hartwell Ice & Laundry Company, and Matheson, as agent of the Queen Insurance Company, intended to make a binding contract of insurance. It was in the contemplation of both parties that the memorandum made by Matheson, in accordance with his custom, called á “binder,” should constitute an effective and complete contract of insurance between the insurer and the insured, and that the duration of the contract thus created, first by the temporary “binder,” and continued by the regular policy, should be for one year from August 27, 1908. It is equally manifest that the insurance company, with full knowledge of all the facts, confirmed and approved the temporary contract, as evidenced by the “binder” made by its agent, and, both prior and subsequent to the fire, treated it as valid. If the temporary contract lacked any of the essential elements of a valid contract of insurance, it was due entirely to the agent of the insurance company; and if in fact any incompleteness existed in this temporary contract, it was fully known to the insurance company, which, nevertheless, recognized the binding effect of the temporary 'contract. These facts clearly appearing, the contract should be upheld, unless it contravenes some law of this State, or is too imperfect and incomplete to be enforced. It is insisted that the statute of this State requires that the whole contract of insurance shall be in writing, and shall be signed by the insurer, and that the written memorandum or “binder,” relied upon as a contract, is incomplete, in that several elements necessary to make a contract of insurance are omitted therefrom. The memorandum in question, it is contended, does not sufficiently describe the parties thereto, it not showing,’ (1) who the insured is; (2) nor the insurer, unless the insurer is B. E. Matheson, individually, the word “agent” being merely descriptio personae; (3) nor is the premium to be paid agreed upon, nor any promise moving from either party disclosed. Of course, there can be no contract without parties, and the contract should identify the parties. It should not be lost sight of in this case that the plaintiff, while setting up the memorandum made by the agent as creating the contract, relies upon other contemporaneous and subsequent writings as evidence of the contract. The evidence shows “a series of writings internally connected one with another, executed contemporaneously with or subsequently to” the written memorandum, which are intelligible without parol and which clearly prove the contract relied upon. Capital City Brick Co. v. Atlanta Ice & Coal Co., 5 Ga. App. 436 (63 S. E. 562). Construing together all the writings on the same subject-matter, every essential element of a complete contract of insurance appears; and the written report of the temporary contract made by the agent to the manager of the company omits no essential element of a complete contract of insurance. Todd v. German-American Insurance Co., 2 Ga. App. 789 (59 S. E. 94). But even if the memorandum made by the agent and called in insurance parlance a “binder” stood alone, we do not think it lacks any essential element of a contract of insurance. According to Mr. Joyce in his work on insurance (1 Joyce on Insurance, §46), temporary insurance contracts evidenced by “binders” need not contain all the terms and conditions of a permanent contract, as where the terms of the usual policy are presumed to' be intended, or where the usual rate of premium is presumed to be meant; and this statement of the law is expressly approved by this court in the Todd case, supra. But the “binder” now under discussion left nothing uncertain, except the amount of.the rate of premium, and it shows an .agreement to pay the rate of premium as fixed by the company and when the regular policy should issue and be received by the insured. Any uncertainty as to the rate of premium was clue solely to the action of the agent of the defendant and of the defendant itself. While the “binder” does not show any specific premium to be paid, it does show by necessary implication an agreement to pay whatever rate of premium might be fixed by the company, and when the permanent policy was issued and delivered to the insured. The insurer in. this case, by the very terms of the “binder,” postponed the pajrment of the premium by the insured until the temporary contract was ended by the substitution of the regular standard policy. The fact that credit is given for the payment of a premium in no wise invalidates the contract of insurance. 1 Cooley’s Briefs on the Law of Insurance, 375. Suppose in this case the memorandum or “binder” had been delivered to the insured, instead of having been kept by the agent and made a part of the records of the company in his office, would not the insured have been legally liable, in accepting the “binder,” to pay whatever rate of premium was subsequently fixed on the property covered by the contract? And if the insurance company had failed to fix the rate of premium before the loss occurred, would not the insured have been bound to pay a reasonable rate for the protection which he received by the temporary contract, or, under the facts of this case, the rate as subsequently fixed on similar property? But in this case the insured, when he made the application for the insurance, offered to pay the premium, which was refused by the agent of the company because the rate had not at that time been fixed. It seems to us that to hold that this contract was invalid or incomplete because there was no specific rate of premium mentioned in the “binder,” under the uncontrover'ted evidence, would be a gross injustice to the insured. A ease very much in point is that of Smith v. Prussian Insurance Co., 68 N. J. L. 674 (54 Atl. 458). In that case an insurance company, by its agent, issued and delivered to the insured a “binder,” or “binding slip,” whereby it assumed and bound itself for $2,000 of insurance upon certain property of the insured, the “binding slip” to be void on the delivery of the policy. Ko rate of insurance was mentioned in the “binder,” because the insured .requested the agent to obtain from the company some concession, which the agent consented to do; and before the rate was agreed on, the property covered by the “binder” was destroyed by fire. The court held that a complete temporary contract of insurance existed between the insurer and the insured from the date of the delivery of the “binder,” and the insured was bound to pay a reasonable rate of premium for the protection which he had received by the temporary contract.

While some of the earlier cases proceed on the theory that these “binding slips” or memoranda merely constitute agreements to issue policies, yet it is now universally held that these “binding slips,” memoranda, or receipts have all the force and effect of insurance contracts, and are as binding as the policies themselves. The cases on this subject are collected by Mr. Cooley in his 'Briefs on the Law of Insurance (vol. 1, beginning on page 535). The case of Todd v. German-American Insurance Co., supra, in principle fully controls the point now under discussion, and we conclude this branch of the case by the statement that in our opinion the trial judge very properly construed the writing in question as constituting a valid contract of insurance, and very properly refused to submit this question to the determination of the jury, it being the duty of the judge, and not of the jury, to decide whether the memorandum or “binder” constituted a valid contract of insurance.

It is contended by the plaintiff in error, in the next place, that the agent had no authority to make such a contract of insurance. There are three reasons shown by the evidence why this position is unsound: (1) The agent who made the binding memorandum or temporary contract was fully authorized by his written commission to take applications for insurance, and to countersign and issue policies, and the making by him of a temporary contract was clearly within the limits-of his authority as agent. (2) The temporary contract was in accordance with his general custom as agent in connection with his agency; and (3) his act in making the temporary contract was fully approved and confirmed by the company. The company accepted the temporary contract and treated it as valid.

3. The breaches of the terms and conditions of the contract of insurance relating to other insurance, incumbrances on the property, and failure to furnish proofs of loss within a reasonable time, were each claimed to have been waived by the company. These issues were solely questions of fact, to be decided by the jury, and there was both positive and circumstantial evidence in support of the waivers claimed by the plaintiff, and in denial of such waivers by the defendant. The law applicable to these questions was fully submitted to the jury in the charge of the judge, in accordance with the repeated decisions of this court and the Supreme Court. Insurance Company of North America v. DeLoach, 3 Ga. App. 807 (61 S. E. 406); American Insurance Co. v. Peebles, 5 Ga. App. 731, 736 (64 S. E. 304); Southern Fire Insurance Co. v. Knight, 111 Ga. 622 (36 S. E. 821, 52 L. R. A. 70, 78 Am. St. R. 216), and cases there cited. We are clearly of the opinion that the verdict is fully supported-by the evidence and the láw applicable thereto. Judgment affirmed.