Mallette Ex Rel. Thomas v. British American Assurance Co.

This is an action brought by Wm. H. Mallette for the use of Susan M. Thomas, as mortgagee, to recover from the appellee $1,150 for the loss of property destroyed by fire. There are three counts in the declaration, the first being upon a verbal agreement to insure certain buildings in Oakland, Maryland, for the use of Susan M. Thomas, for an amount not exceeding $1,150, for one year from June 21st, 1898, in consideration of a premium of $33.75, part of which was then paid, and the residue of which it was agreed should be paid in a few days thereafter; no reference being made in this Court to any other terms or conditions of the agreement than those above mentioned.

The second count set forth the execution of a written policy of insurance on the same buildings, in favor of the plaintiff for the use of Susan M. Thomas, for one year from June 21st, 1897, to the amount of $1,150 in consideration of a premium of $33.75 then paid, and a verbal agreement, made shortly before the expiration of said policy on June 21st, 1898, in consideration of the further sum of $33.75 to renew said policy for the same amount, and upon "the same identical terms, agreements, covenants and stipulations as were contained in said policy, for the further term of one year from June 21st, 1898," and alleged that the plaintiff then paid a part of said renewal premium and promised to pay the remainder in a few days, which payment and promise was accepted by the defendant as satisfactory. Both counts averred in due form the loss sustained, and demand for, and refusal of, payment. To both these counts the defendant demurred, and the Circuit Court for Garrett County overruled the demurrer as to the first count, but sustained it as to the second count.

Under leave of Court a third count was then filed, setting forth the execution of the same policy for one year from June 21st, 1897, as was set forth in the second count, and in the same language, and then alleged that shortly before June 21st, 1898, when said policy was about to expire, the defendant, in consideration of the further sum of $33.75, renewed said policy for another year from June 21st, 1898, "on the same terms and conditions as those contained in said written policy, which said renewal was made by verbal agreement between the plaintiff and defendant, and plaintiff paid thereon part of the premium and promised to pay the balance, which payment and promise was accepted by the defendant as the consideration for said renewal." The loss, demand for, and refusal of payment was duly set forth. Defendant demurred to this count also, and the demurrer was overruled. The general issue pleas were then filed, as also pleas specifically denying that the defendant either renewed, or agreed to renew, said policy for any period after June 21st, 1898. The case was then removed to Washington County, where a trial by jury was had, and at the close of the testimony on both sides the plaintiff offered one prayer, framed upon the theory of the third count which had been sustained on demurrer, and asking the Court to instruct the jury that the facts recited therein, if found by it, constituted a renewal of the policy offered in evidence; and the defendant offered a prayer that there was no evidence legally sufficient to entitle the plaintiff to recover under the pleadings in the case. The Court rejected the plaintiff's prayer and granted the defendant's prayer, to which action of the Court the plaintiff excepted and has brought this appeal.

We will consider first the ruling upon the demurrer to the second count, which may be very briefly disposed of. We are of opinion that this count is defective, if for no other reason, because it fails to set forth with sufficient fullness and clearness the terms, agreements, covenants and stipulations contained in the former policy and which were to be inserted in the renewal of the policy.

We come next to the ruling of the Court upon the defendant's prayer by which the jury were instructed that there was no evidence legally sufficient to entitle the plaintiff to recover under the pleadings in the cause. It is always competent by reference to the pleadings to ask for the judgment of the Court upon their legal sufficiency and effect with respect to the evidence offered, but before a prayer can be granted withdrawing a case from the jury, the Court must assume the truth of all the evidence before the jury tending to sustain the claim or defense, as the case may be, and of all inferences of fact fairly deducible from it; and this, though such evidence be contradicted in every particular by the opposing evidence in the cause.Balto. City Passenger R.W. Co. v. Wilkinson, 30 Md. 230;Jones v. Jones, 45 Md. 154.

It was argued as to the first count that no evidence whatever was offered to sustain it, because, as we understand the argument made, the contract there set out was a contract for original insurance, not for renewal of an existing policy, while the evidence offered all shows a previous insurance, and shows, or tends to show, an agreement for renewal. But it is wholly immaterial whether the agreement was for original insurance or for renewal, because in either aspect the contract is a contract to insure. As to the second count, which alleges an agreement torenew the existing policy, and as to the third count, which alleges an actual renewal, it is contended there was no contract whatever shown to have been made between the parties, because there was no evidence to show that this particular policy was agreed to be renewed, or was renewed, or what the terms and conditions of renewal were. But the testimony of Mrs. Mallette is clear that Mr. Thayer, the defendant's agent, wrote to inquire whether her husband wished to have renewed the two policies expiring June 21st, 1898, and that she told him her husband directed her to reply that he wished these two policies renewed, and would send him a check for the premium soon, and that he replied "all right, Mrs. Mallette, all right, I will attend to it." Mr. Thayer, on cross-examination admitted he knew she referred to these two policies, and that he did not tell her he did not intend to renew them, without payment of the premiums. We cannot doubt, therefore, that the policy now under consideration, which was one of the two maturing June 21st, 1898, was included in the renewal offered by Thayer, and accepted by Mallette. As to the objection that nothing was said as to the terms and conditions of renewal, we hold that where there is an agreement for a renewal of a policy, the insured is justified in assuming that the premium, and all the terms and conditions of the renewal will be the same as those of the original, unless he has notice of some proposed change. This would hardly seem to need authority, but if desired it will be found in Hartford Ins.Co. v. Walsh, 54 Ill. 164, where it was held that, "unless otherwise expressed, a renewal of an insurance policy is on the same terms and conditions as were originally contained in the policy." Moreover, in the present case, the very terms of the policy so provide, as appears from the following clause: "This policy may, by a renewal, be continued under the originalstipulations in consideration of premium for the renewed term, provided that any increase of hazard must be made known to this company at the time of renewal, or this policy shall be void."

We therefore think there was no uncertainty as to the policy to be renewed, or as to any of the terms and conditions of renewal, and there being abundant evidence tending to show an agreement for the renewal of the policy in question, it was error to withdraw the case from the jury as was done in granting defendant's prayer.

The plaintiff's prayer, which was rejected, sets out at length, and in detail, all the facts attending the alleged agreement for a renewal of the policy. It was strenuously argued by the appellee that the policy could not be renewed without actual payment of the full premium and that the agent could not waive this requirement, and for this contention reliance was placed upon the case of Bradley v. The Potomac Fire Ins. Co.,32 Md. 108; but the policy here does not provide, as it did there, that the company should not become liable until the premium in full therefor was actually paid, and that if not paid within fifteen days the policy should be null and void. In deciding that case JUDGE ALVEY said: "The cases cited and mainly relied on by the appellant have no application to this case. They were instances in which the insurers were held to have waived the right to receive the premium as a condition upon which the risk was to attach, upon the ground that the assured would have been otherwise misled and deceived."

Among the cases thus referred to were: Tayloe v. MerchantsIns. Co., 9 Howard, 390; Comm. Ins. Co. v. Union Ins. Co., 19 Howard, 318; Baptist Church v. Brooklyn Ins. Co., 19 N.Y. 305;Post v. Aetna Ins. Co., 43 Barb. 351, and others; and the implication is strong that these cases were approved by this Court in 32 Md. The present case comes directly within the reason of these, as upon the undisputed testimony the plaintiff was misled and deceived by the conduct of the defendant's agent. It is well settled that credit may be given for the premium notwithstanding the policy may provide that the insurance shall not be considered binding until actual payment, and that if credit be given by such an agent as Thayer, it will not affect the validity of the contract. Emery v. Boston Ins. Co.,138 Mass. 413; Angell v. Hartford Fire Ins. Co., 59 N.Y. 171;Franklin Fire Ins. Co. v. Colt, 20 Wall, 560; (the latter case being cited on this point with approval in Phoenix Ins.Co. v. Ryland, 69 Md. 447;) Alexander v. Continental Ins.Co., 67 Wis. 427.

In the last case a premium note was payable in annual instalments, and the policy provided that the liability of the company should cease upon failure to pay any instalment. The agent agreed to give notice to the insured fifteen days before any instalment became due, but failed to do so; and before the policy expired, and while instalments were overdue and unpaid, a loss occurred, and it was held that the condition as to the termination of liability had been waived, and that the insured did not forfeit her rights under the policy by neglecting to pay the instalments as they fell due. The Court said: "This rule is absolutely necessary for the protection of the insured. The insured deals with no one but the agent. The company cannot deal with its patrons in any other way. Justice and law therefore require that the company shall be held to sanction what the agent agrees to and upon which the insured relies. To allow the company to enforce a condition or forfeiture of the policy for a neglect to do that which the agent informs the assured shall not avoid the policy, would work the greatest injustice."

See also Newark Machine Co. v. Kenton Ins. Co., 50 Ohio St. 549, reported in 22 L.R.A. 768, and 11 Amer. and Eng. Ency. ofLaw, p. 333, for a collection of the cases showing the agent's authority to waive payment of premiums. In Hartford Fire Ins.Co. v. Keating, 86 Md. 131, it was held that a clause in a policy providing that no agent shall have power to waive any of its conditions except such as by its terms may be endorsed thereon, does not apply to conditions relating to the inception of the contract, but operates to prevent agents from modifying the terms of the policy after it has been issued; and in MutualFire Ins. Co. v. Eicholtz, 88 Md. 92, the acceptance of part of the premium was held a waiver of non-payment of the residue. Here the proof is that on June 25th, Mallette sent Thayer a check on account of insurance for $20, with a promise to send more in a few days; that Thayer accepted the check and collected the money and that at that time only $10 was due for premiums on policies other than that here in question, thus leaving in Thayer's hands for insurance premiums $10, applicable to this policy as the only one then not paid up, and the plaintiff's prayer carefully and properly left to the jury to determine whether Thayer accepted the check for that purpose. The prayer was claimed to be defective on the ground that the waiver of payment of the premium in full by the agent could not bind the company, but we have seen the decided weight of authority is to the contrary. We think the plaintiff's prayer properly submitted the whole law of the case, and in a more favorable light to the defendant than it could demand, since under the decisions referred to the acceptance of a promise to pay the premium, without actual payment of any part, would be a sufficient consideration to support the contract.

For the reasons given, the judgment will be reversed and the cause be remanded for a new trial

Judgment reversed and cause remanded with costs to theappellant above and below.

(Decided June 15th, 1900.)