Bell v. Traders and Mechanics Insurance Co., Inc.

192 S.E.2d 711 (1972) 16 N.C. App. 591

Edward BELL and Pauline W. Bell
v.
TRADERS AND MECHANICS INSURANCE COMPANY, INC.

No. 7229SC596.

Court of Appeals of North Carolina.

November 22, 1972.

Hamrick & Bowen, by Fred D. Hamrick, Jr., Rutherfordton, and McFarland & Key, by William A. McFarland, Tryon, for plaintiff.

Williams, Morris & Golding, by James F. Blue, III, Asheville, for defendant.

BROCK, Judge.

Defendant assigns as error the court's refusal of his motion to strike certain portions of the plaintiff's reply alleging waiver. Defendant contends plaintiff's reply does not specifically state the facts constituting waiver, and so should be struck as an insufficient defense under Rule 12(f) of the North Carolina Rules of Civil Procedure. Rule 8(c) designates waiver as an affirmative defense. The language in Rule 8(a), dealing with general pleading, and that in Rule 8(c), dealing with pleading affirmative defenses, is largely identical: (such pleading shall contain) "a short and plain statement . . . sufficiently particular to give the court and the parties notice of the transactions, occurrences, or series of transactions or occurrences, intended to be proved." Under our new Rules of Civil Procedure, the requirements for pleading an affirmative defense are no more stringent than those for pleading a cause of action. Plaintiff's reply in question was sufficiently particular to place the court and defendant on notice of the matter intended to be proved. This assignment of error is overruled.

Defendant makes numerous assignments of error to the admission of evidence. Assignments of error Nos. 10-16 challenge the admissibility of the testimony of Robert Adams, manager of Polk Insurance Company, Inc., which was the local or producing agent for Traders and Mechanics Insurance Company, Inc., in the issuance of the fire insurance policy in question. The testimony, admitted over defendant's objections, was as follows:

"Q. What did you tell Mr. McFarland, if anything, with reference to whether or not the claim would be paid?

"A. I told Mr. McFarland that the claim would be paid; that it was a matter of how much money.

"Q. Now, was the claim still in your office and in negotiation as of the time you left there?

"A. We had sent to Mr. Black in Spartanburg the fire loss claim that was filed. Now, I don't know whether we had a copy of this in Mr. Bell's file or not.

"Q. Were you still talking with Mr. McFarland and Mr. Bell about this claim up until the time you left?

"A. Yes, Sir.

"Q. And that was about a year and a half to two years from this date?

"A. That's right."

This testimony tended to show that Adams had told plaintiff his claim would be paid, and that Adams had negotiated with plaintiff at a time after the one-year-from-loss period for bringing suit had passed. Both of these statements affected the critical issue of this trial, i. e., whether defendant waived the time limitation provision of the insurance contract through the actions or statements of its agents.

It is a general principle that one who has dealt with an agent or who has availed himself of the act of an agent must, in order to charge the principal, prove the authority under which the agent acted; he has the burden of establishing the agent's authority to bind the principal by the act or contract in controversy. 3 Am.Jur.2d, Agency, § 348, p. 705. "Thus, the person alleging the agency must prove not only the fact of its existence, but also its nature and extent." 3 Am.Jur.2d, supra; accord, Harvel's, Inc., v. Eggleston, 268 N.C. 388, 150 S.E.2d 786. Statements of the alleged agent are not competent against the principal as admissions against interest unless the fact of agency and the authority of the agent to bind the principal in the matter are shown by competent evidence. 6 Strong, N.C.Index 2d, Principal & Agent, § 4, p. 406.

Adams testified that he told plaintiff he had no authority to settle the claim. In light of this testimony, plaintiff could not rely on a presumption that Adams was acting within an implied or ostensible authority. It was incumbent on plaintiff to establish Adams' authority to bind the defendant. See Horton v. Iowa Mutual Insurance Co., 9 N.C.App. 140, 175 S.E.2d 725. Plaintiff did not meet this burden. The admission of this testimony was error prejudicial to the defendant.

New trial.

MALLARD, C. J., and BRITT, J., concur.