Fidelity & Casualty Co. v. Hartzell Bros. ( 1923 )

FARR, J.

Epitomized Opinion

This is an action brought on an insurance policy. On Dec. 20, 1919, the Insurance Company issued to Hartzell its policy of insurance for burglary covering their stock of merchandise in the city of Youngstown. On the night of April 22, 1920, the store was burglarized and an amount of Merchandise taken therefrom including a number of silk shirts and probably some silk neckties. Upon the assurance of the sub-agent of the Company that the policy covered silk materials, the plaintiff took out the policy in question. The Insurance Company refused to pay for the loss, claiming ihat thepoliey specifically exempted silk goods. On the other hand the plaintiff contended that the Company’s sub-agent specifically assured it that the policy covered silk materials and that the sub-agent had taken the matter up with the Cleveland representative where the judgment of the sub-agent was confirmed. As the trial in the lower court resulted in a verdict for the plaintiff, error was prosecuted to the Court of Appeals. In sustaining the judgment of the lower court, the Court of Appeals held:

1. A sub-agent of a Life Insurance Company appointed to represent it in a particular branch of its business becomes in reference thereto, the direct representative of the Company, and notice of a fact to him will operate as notice to the Company, and it will, be bound by acts done by him in respect to that branch of its business entrusted to him.

2. As to such matters made known to its agent the Insurance Company is deemed to have knowledge notwithstanding a clause in the policy provides that “no officers, agent, or other representative of the Company shall have power to waive any provision or condition of this policy except by agreement endorsed thereon or added thereto.”

3. As the Insurance Company had full knowledge of the fact that the policy was issued with the understanding that it was to cover silk materials, the provision in the policy to the contrary could not be relied upon by the Insurance Company to absolve itself from liability.