Elam v. Smithdeal Realty & Insurance , 182 N.C. 599 ( 1921 )

Hoke, J.

There was evidence on the part óf plaintiff tending to show that on or about 31 March, 1919, the plaintiff entered into a contract with defendant company, doing business, among other things, as insurance agents and brokers, to procure a policy of $5,000 on the car of defendant, affording protection against damage by fire or collision or other kind of accident. That shortly thereafter the said agent come to plaintiff, who was at the time presently engaged at his business in a tobacco warehouse, and told witness he had obtained the policy desired, and had left same for plaintiff at the garage with the proprietor, who had put the policy in the latter’s safe. Plaintiff, with a view of then paying the premium, asked for the amount, and was told by the agent, an officer and one of the owners of the defendant company, that plaintiff had 60 days in which to pay the premium, and it appeared that the premium was paid after the accident and after suit was instituted against defendant. That .within a week from this time, or near that, plaintiff’s car, in a collision, sustained damages to the amount of $1,000, and on application or preparation through the same agent for adjustment with the insurance company which had issued the policy, it was ascertained that the policy did not extend to or cover such damages. There was evidence to the effect further that during the time the policy remained in the safe, and' before the injury, when plaintiff’s car had a near accident but sustained no pecuniary damage, the agent had assured plaintiff that in any event plaintiff was protected, as the policy he had procured covered risks of that kind, and that on another occasion when the owner of another car was about to procure insurance against accident and collision, through defendant, plaintiff being present, the agent referring to plaintiff said be bad a policy of tbe kind on tbe car owned by bim; and, also, tbat when plaintiff reported tbe loss, and it was found on examination tbat tbe risk was not covered, tbe same agent, Mr. Smitbdeal, expressed bis regret, saying, “Mr. Elam, I misrepresented tbis to you, and I am just as sorry as you are; I tbougbt you were insured.” Upon tbis, a statement of tbe facts chiefly pertinent to tbe inquiry, we are of opinion tbat tbe judgment of nonsuit should be set aside and the cause submitted to tbe jury. It is very generally beld tbat where an insurance agent or broker undertakes to procure a policy of insurance for another, affording protection against a designated risk, tbe law imposes upon bim tbe duty, in tbe exercise of reasonable care, to perform tbe duty be has assumed, and within tbe amount of tbe proposed policy be may be beld liable for tbe loss properly attributable to bis negligent default. Rezac v. Zima et al., 96 Kan., 752; reported, also, in Ann. Cas., 1918 B, p. 1035; Thomas v. Funkhouser, 91 Ga., 478; Backers v. Ames, 79 Minn., 145; Lindsay v. Pettigrew, 5 S. D., 500; Criswell v. Riley, 5 Ind. App., 496; Reed Mfg. Co. v. Wurt, 187 Ind. App., 379; Fellows & Co. v. Gordon & Barnett, 47 Ky., 415; Mechem on Agency, sec. 1258. In resistance to tbe application of tbe principle to tbe facts of tbe present record, we are cited to a number of authorities to tbe effect tbat a policy of insurance, when issued, is considered as expressing tbe contract between the parties, and has the effect of shutting off prior or contemporaneous parol inducements and assurances in contravention of tbe written policy. Tbe position, in proper instances, is very generally recognized, and has been approved in many cases in tbis jurisdiction. Clements v. Ins. Co., 155 N. C., 61-62; Floars v. Ins. Co., 144 N. C., 232. But in tbe instant case tbe action is not one against tbe insurance company in which plaintiff is seeking to bold it liable for an obligation not contained in tbe written policy, but plaintiff sues tbe agent and broker for negligent failure to perform a duty be bad undertaken and assumed as agent, by which plaintiff has suffered tbe loss complained of, and in our opinion tbe authorities cited are not apposite to tbe question presented on tbe record. It is further insisted for defendant tbat no cause of action is disclosed because there is no consideration given for defendant’s promise, but tbe better considered decisions on tbe subject are to tbe effect tbat while tbe agent or broker in question was not obligated to assume the duty of procuring tbe policy, when be did so, tbe law imposed upon bim tbe duty of performance in tbe exercise of ordinary care, and, as a matter of contract, it is said in some of tbe cases on tbe subject tbat tbe trust and confidence imposed on bim as agent .afforded a sufficient consideration for tbe undertaking and carrying out tbe instructions given. Criswell v. Riley, supra, and in Reed v. Wurts, supra, presiding Justice Baume, delivering tbe opinion, quotes'with approval from 1 Joyce on Insurance, see. 687, as follows': “If a person voluntarily, without consideration and without expectation of remuneration or reward, agrees to procure an insurance, and actually takes steps in the matter, he is responsible for misfeasance, and if he proceeds to effect a policy, and is so negligent and unskilled that no benefit is derived therefrom, he is liable, although he was not bound to undertake the performance.” And it would seem that the promise to take the policy would suffice as a consideration. Again, it is contended that defendant may not be held liable for this loss because of his own negligent default in not ascertaining the contents of the policy and having taken out a policy which would have afforded him the protection he desired. It is an established principle with us, subject to some qualifications not pertinent to this inquiry, that in case of breach of contract, which is definite and entire, or tort committed, it is incumbent upon the injured party to do what reasonable care and business prudence requires to minimize the loss, and for damages thereafter occurring and incident to his own breach of duty no recovery should be allowed, the same being regarded as too remote. Yowman v. Hendersonville, 175 N. C., 574-579; Hocutt v. Tel. Co., 147 N. C., 193; Bowen v. King, 146 N. C., 385; R. R. v. Hardware Co., 143 N. C., 54; 8 R. C. L., p. 442, and it is also held with us, in accord with principles very generally prevailing, that where a person of mature years, of sound mind, who can read or write, signs or accepts a deed or formal contract affecting his pecuniary interest, it is his duty to read it, and knowledge of the contents will be imputed to him in case he has negligently failed to do so. But this is subject to the qualification that nothing has been said or done to mislead him or to put a man of reasonable business prudence off his guard in the matter. Clements v. Ins. Co., 155 N. C., 61-62; Floars v. Ins. Co., 144 N. C., 233. The latter citing, among the authorities, Bostwick v. Ins. Co., 116 Wis., 392.

In the present case, as it now appears, there are facts in evidence tending to show that plaintiff had the policy in his possession for some little time before the collision, and from reading it he could have ascertained that it did not afford any protection in case of collision. There are facts further to the effect that the policy was not delivered to him personally, but at a time when he was busily engaged in a tobacco warehouse, and same was left for him with the proprietor of the garage where his car was kept, and that several times while the policy was so placed and before the collision things were said and done by the agent giving assurance that the policy gave the protection contracted for, and, on application of the principles stated, we are of opinion that the cause should be submitted to the jury on the question whether the failure to hold an adequate policy is due to plaintiff’s own negligence in not reading Ms policy and taking out one sufficient to protect Mm. It is ordinarily true tbat for breaches of duty involved in the contract of agency the principal may sue either for breach of contract for faithfulness or in tort for a breach of duty imposed by the same. 31 Cyc., 1609.

Where, in a case of this kind, the action is for tort, and there is a negligent default on the part of plaintiff contributing to the injury, this would have the effect of defeating the action. But where the action is brought for breach of contract, and that is established, contributory negligence is not allowed to defeat the action in toto, but the negligence of the claimant contributing to the injury is not to be properly considered on the issue as to damages. Hale on Damages, p. 68.

In the present case plaintiff has elected to sue for breach of contract of agency causing the damages complained of, and, if this should be established, the cause will be further considered on the question of damages, and if it is made to appear on the facts, as they may be accepted by the jury, that the failure to have an adequate policy affording protection is due to plaintiff’s own negligent default in not ascertaining the defect in the policy held by him, and procuring another, in that event the damages would be nominal.

This will be certified that the judgment of nonsuit be set aside and the cause tried by the jury on appropriate issues.

Reversed.