Western Indemnity Co. v. Indus. Acc. Com. , 182 Cal. 709 ( 1920 )

I dissent. The evidence shows that the workmen's compensation law did not apply to Dr. Pond until, at the solicitation of the agent Smith, he elected to be bound by its terms. The effect of his election was to charge him with responsibility for the injury to his employees under the terms of that law, even if he was wholly without fault, as in this case. Because of such election Dr. Pond evidently intended to keep covered by insurance. Accordingly he notified Smith, petitioner's agent, that he desired an indemnity policy, dating from the expiration of his existing insurance, and that he was willing to pay whatever premium was charged by the company. The petitioner offered its insurance policies for sale to the public generally at a fixed and uniform rate. The terms and provisions of the policy being thus fixed, the question of insurance turned upon the willingness of the prospective policy-holder to pay the premium demanded therefor by the company. At the time Dr. Pond applied to Smith for the policy he stated that he was willing to pay the premium, whatever it might be. Instead of communicating this fact to the general agent, Smith inserted in the written application the amount of the premium as $10. This resulted in the complications detailed in the main opinion. The evidence discloses that the company was willing to write the policy and that Pond was willing to pay the amount of the insurance, and this willingness had been communicated by the one to the other. The whole difficulty arose from the failure of Smith to state in the written application for insurance the fact that Dr. Pond was willing to pay the increased premium. This was not the fault of Dr. Pond. The policy applied for was one dated September 25, 1917, and the policy finally issued and paid for was so dated. Wilson, to all intents and purposes, was the general agent of the company. He conducted the entire business of the general agent, in the name of the general agent, without consultation with him. Upon the insistence of Smith that Dr. Pond was entitled to a policy dated September 25, 1917, in accordance with the custom of the office he issued such a policy so dated, after knowledge of the accident, which policy covered the liability here sought to be enforced. In view of the delay caused by the failure of its agent Smith to communicate to the general agent the facts, namely, the willingness of Dr. Pond to pay the premium asked, which would have resulted in the prompt issuance of the policy, it would seem that common honesty demanded of the defendant that it accept the responsibility due to the delay of its own agent in communicating a correct statement of the actual terms of the application. The finding of the ultimate fact by the commission was that the written policy which by its terms covered, the accident was binding by reason of a previous oral negotiation between the parties. I think the evidence is sufficient to justify this finding. Under somewhat similar facts, in Eames v. Home Ins. Co., 94 U.S. 621, [24 L.Ed. 298, see, also, Rose's U.S. Notes], it was held under the circumstances there stated that the acceptance of the rate by the insured in a communication to the local agent was sufficient to bind the company where the rate had been previously fixed by the general agent, and that although no policy was ever issued, the insurance company was bound. The only difference in the two cases in principle is that in the ease at bar the information that the applicant was willing to pay the premium demanded was communicated to the local agent before the premium was fixed by the general agent, and inEames v. Home Ins. Co. it was communicated afterward. In neither ease did the information that the applicant was willing to pay the premium demanded reach the general agent in time for the issuance of the policy before the loss, while in Eames v.Home Ins. Co. the policy was never issued, and in the ease at bar it was issued with full knowledge of the fact. I think that Dr. Pond had signified his acceptance of the terms offered by the insurance company and thus a contract of insurance had been concluded.