Opinion
43330.
ARGUED JANUARY 10, 1968.
DECIDED JANUARY 31, 1968.
Complaint. Fulton Civil Court. Before Judge Langford.
Samuel L. Eplan, James H. Weeks, for appellant.
Powell, Goldstein, Frazer Murphy, C. B. Rogers, Jack M. McLaughlin, for appellee.
The petition of an insurance company against its general agent alleging that the insurer was damaged by the negligence of the agent in accepting an excessive risk and issuing a binder which effected a binding contract of insurance, and that the insurer paid the insured's claim for loss resulting from a hurricane that was known by the insured and the agent to be imminent at the time the binder was issued, was not subject to general demurrer.
ARGUED JANUARY 10, 1968 — DECIDED JANUARY 31, 1968.
The defendant appeals from the judgment of the trial court overruling his general demurrer to the plaintiff's petition which contained the following allegations: The defendant as a general insurance agent was authorized by a written agreement (attached as an exhibit to the petition) to receive and accept for the plaintiff insurer proposals for contracts of insurance "covering risks located in Atlanta and vicinity." On a stated date at 6:45 p. m. the agent received a call at his home from a client in Riviera Beach, Fla., who requested the agent to issue an oral binder for a contract of marine insurance for $5,000 on the client's boat located there. The agent accepted the proposal on behalf of the insurer and thereby effected a binding contract of insurance between the insurer and the client. At the time the agent issued the binder he knew that a hurricane (1964 Hurricane Isabell) was then in existence off the east coast of Florida and it was predicted it would pass four miles south of where the boat was located before midnight on the same day; that the time of the telephone call the winds at Riviera Beach were blowing between 40 and 50 miles per hour and the seas off Riviera Beach were exceedingly rough and choppy; that the client believed the predicted hurricane was imminent; and that the boat was not then insured. At about 7:30 p. m. on the same day the agent caused a written binder confirming the oral contract of insurance to be issued and mailed to the insurer. The hurricane passed through Riviera Beach about 8 p. m. on the same day, and the boat pulled loose from its moorings, was smashed against underwater obstructions and later sank. Upon demand by the insured to be indemnified for the loss of the boat, the insurer paid the insured $4,000 in full satisfaction of his claim under the oral and written binders. By payment of this claim the insurer was damaged because of the negligent manner in which the agent received and accepted the proposal for insurance, with full knowledge that the risks thereby incurred (as described above) were extraordinary, excessive, unreasonable, and disproportionate to the premium charged, and without first notifying the insurer of said risks, and without visually ascertaining the condition of the property.
The agent argues in support of his demurrer that the petition shows the boat was not a risk located in the vicinity of Atlanta and therefore that he was not authorized to insure it on behalf of the insurer. The alleged location of the boat does not show as a matter of law, however, that the binder was not a contract enforceable against the insurer. The meaning of the term "Atlanta and vicinity" in the contract between the agent and the insurer as well as the actual authority of the agent and the insured's knowledge of limitations on the agent's authority, are questions of fact involving the course of dealing between the parties and the practices in the business. Harris Co. v. P. E. Vallee Co., 29 Ga. App. 769, 770 ( 116 S.E. 642); Johnson v. U.S. Fidelity c. Co., 93 Ga. App. 336, 341 ( 91 S.E.2d 779); 3 Couch on Insurance 2d, 521 et seq., §§ 26:55 — 26:60; 16 Appleman 114, § 8695; 3 AmJur2d 487, Agency, § 83. The authority of the agent cannot be determined from these pleadings but must be determined by evidence presented to prove or disprove the insurer's allegation that the agent effected a binding contract of insurance. The insurer in its brief concedes that it will be required to prove at the trial that the binder issued by the agent was a contract by which it was bound. Unless this binder is enforceable by the insured, the insurer's payment in settlement of the insured's claim would not be recoverable damage resulting from the agent's alleged negligence. Code § 105-2014; accord Benton v. Roberts, 35 Ga. App. 749, 751 (9) ( 134 S.E. 846).
Judgment affirmed. Bell, P. J., and Quillian, J., concur.