Opinion
6 Div. 992.
February 16, 1937. Rehearing Denied April 6, 1937.
Appeal from Circuit Court, Jefferson County; John Denson, Judge.
Action on a contract of fire insurance by Bethel Chapel, a corporation, against the Queen Insurance Company of America. From a judgment for plaintiff, defendant appeals.
Affirmed.
Certiorari denied by Supreme Court in Queen Insurance Co. v. Bethel Chapel, 234 Ala. 184, 174 So. 640.
Count A of the complaint as amended, upon which the trial was had, is as follows:
"Plaintiff claims of the defendant the sum of One Thousand Dollars ($1,000.00) as damages for the breach of an oral contract to insure made by the defendant acting through or by its duly authorized agent, while acting within the line and scope of his employment as such, on, to-wit, about the month of May or June, 1934 in substance as follows:
"The said defendant, acting as aforesaid on or about May or June, 1934 orally agreed to insure the Church building of the plaintiff, namely the Bethel African Methodist Episcopal Church building of the plaintiff located in Ensley, Alabama, against loss by fire which said policy was to take effect July 5, 1934, and was to run for one year from its date and to be a renewal of a like policy which plaintiff had with the defendant expiring on July 5, 1934 and that the terms of the new policy were to be the same as the old policy; that said policy was to be in the principal sum of $1,000.00 at the rate of $1.10 or a total premium of $11.00 which said premium of $11.00 the plaintiff promised to pay; that it was mutually agreed between the parties as aforesaid that said premium could and would be paid in installments as had been the custom between said parties for many years, so long as the whole premium of $11.00 was paid before the expiration of one year from the date of said agreement; and plaintiff (sic) still acting by or through its duly authorized agents agreed to immediately issue such a policy.
"Plaintiff further avers that relying upon said agreement it paid to defendant an installment or installments on said premium, each being in the sum of $2.00 and on the dates of, to-wit, June 26, 1934 and July 23, 1934.
"Plaintiff further avers that the defendant failed to issue said policy of insurance as agreed and that thereafter, on to-wit, November 23, 1934 the said Church building was partly or wholly destroyed by fire of an origin unknown to plaintiff, of which defendant has had notice and that thereafter and within 60 days after the said fire plaintiff informed the said defendant, acting as aforesaid of said fire and was informed by said defendant, acting as aforesaid that no policy of insurance had ever been issued on said church edifice, which was the first knowledge that plaintiff had that same had not been insured.
"Plaintiff further avers that the said church building was destroyed by fire as aforesaid at a loss of to-wit, $1,000.00 which was the reasonable cash value of the same at said time and that plaintiff has suffered a loss in the sum of $1,000.00 as a result of said failure of the defendant so to insure the said church building, hence this suit."
The demurrer, among other things, points the objection that plaintiff, Bethel Chapel, is not the proper party to sue for loss of the property, the insistence being that said plaintiff is a Methodist Church and that the legal title to property belonging to such church is in the trustees for the church.
The policy previously issued to plaintiff and which, it is alleged, defendant agreed to renew, contained this provision: "This policy shall be cancelled at any time at the request of the insured, or by the company giving five days notice of such cancellation."
Coleman, Spain, Stewart Davies, of Birmingham, for appellant.
A mere agreement to pay in installments without specifying any sum or fact upon which the sum can be ascertained is void for uncertainty. Gafford v. Proskauer, 59 Ala. 264, 266; Pulliam v. Schimpf, 109 Ala. 179, 19 So. 428; Adams v. Adams, 26 Ala. 272; Erwin v. Erwin, 25 Ala. 236; 89 A.L.R. 1364, note; 13 C.J. 266; Birmingham Electric Co. v. Praytor, 22 Ala. App. 45, 111 So. 895. In an action brought for breach of an oral contract to insure, plaintiff must allege and prove payment or tender of premium before he can recover. 26 C.J. 60; 32 C.J. 1126; 14 R.C.L. 899; Hardwick v. State Ins. Co., 20 Or. 547, 26 P. 840; City M. D. Co. v. Palatine Ins. Co., 226 Ala. 179, 145 So. 490; Liverpool, etc., Ins. Co. v. McCree, 210 Ala. 559, 98 So. 880; 1 Cooley's Briefs (2d Ed.) 683; California Ins. Co. v. Settle, 162 Ky. 82, 172 S.W. 119; Cunningham v. Connecticut F. I. Co., 200 Mass. 333, 86 N.E. 787; Royal Ins. Co. v. Eggleston, 19 Ala. App. 638, 99 So. 828; Tourtlott v. West Bangor, etc., Co., 126 Me. 118, 136 A. 481; New York L. I. Co. v. Mason, 151 Ark. 135, 235 S.W. 422, 19 A.L.R. 618; 1 Couch on Ins. § 127, p. 239, notes 20, 21. To make valid a contract of insurance, delivery of the policy to insured must be shown. 26 C.J. 58; 1 Cooley's Briefs (2d Ed.) § 629; Consumers' M. Co. v. German Ins. Co., 70 N.J.Law, 226, 57 A. 440; Wainer v. Milford Mut. F. I. Co., 153 Mass. 335, 26 N.E. 877, 11 L.R.A. 598. Trustees of a Methodist Church are the proper parties plaintiff to bring suit to recover for injury to church property. Tilson v. Graham, 208 Ala. 312, 94 So. 295; 8 Couch on Ins. § 2053; 54 C.J. 99; Methodist Church v. Equitable Surety Co., 269 Pa. 411, 112 A. 551. An action for breach of contract to insure must be against the agent and not the company. Royal Exch. Assur. Co. v. Almon, 202 Ala. 374, 376, 80 So. 456; Cherokee L. I. Co. v. Brannum, 203 Ala. 145, 148, 82 So. 175.
Murphy, Hanna, Woodall Lindbergh and Wm. H. Ellis, all of Birmingham, for appellee.
An incorporated religious society may sue in its own corporate name and is not required to sue in the name of trustees. Code 1923, §§ 7169, 7015 (2). If a contract to insure is in fact made by the insurance company, acting at the time by and through its duly authorized agent, an action will lie against the company for any damages occasioned by or resulting from such breach. Globe Rutgers F. I. Co. v. Eureka Sawmill Co., 227 Ala. 667, 151 So. 827; Sun Ins. Office v. Mitchell, 186 Ala. 420, 65 So. 143. A verbal contract of insurance, as well as a verbal contract to insure, can be made and will be enforced when and if all the terms of the contract are agreed upon. Globe Rutgers F. I. Co. v. Eureka Sawmill Co., supra; Commercial F. I. Co. v. Morris, 105 Ala. 498, 18 So. 34; Home Ins. Co. v. Adler, 71 Ala. 516. In a suit for breach of an oral contract to insure, prepayment of a premium is not necessary, the insurance company having the right to a deduction of the amount of unpaid premium. Home Ins. Co. v. Adler, supra; Globe Rutgers F. I. Co. v. Eureka Sawmill Co., supra; 13 C.J. 725. Where insurance policy is issued and credit extended to insured by agent, the premium becomes a debt due by insured and amounts to such payment as that the company cannot cancel the policy. Buckley v. Citizens' Ins. Co., 188 N.Y. 399, 81 N.E. 165, 13 L.R.A.(N.S.) 889; Insurance Companies v. Raden, 87 Ala. 311, 5 So. 876, 13 Am St. Rep. 36; Farmers' Mut. Ins. Ass'n v. Tankersley, 13 Ala. App. 524, 69 So. 410, 411.
As has been decided in this state, a verbal contract of insurance is valid and when complete will be enforced according to its terms. As was said by our Supreme Court: "The rate of premium, duration of the policy, nature of the risk, the property, and location of same, as well as the amount of insurance must be agreed upon." Globe Rutgers Fire Ins. Co. v. Eureka Sawmill Co., 227 Ala. 667, 151 So. 827, 829. It was also held in the case just cited, supra, that the plaintiff must allege and prove a consideration for the contract. Liverpool L. G. Ins. Co., Ltd., v. McCree, 210 Ala. 559, 98 So. 880.
As we read the opinion in Globe Rutgers Fire Ins. Co. v. Eureka Sawmill Co., supra, count A of the complaint is sufficient to state plaintiff's cause of action. The terms of the policy were specifically alleged to be that of a similar policy contract between the same parties expiring July 5, 1934; the rate of the premium was named, the duration of the term, the nature of the risk, the property insured, and its location and the amount of the insurance, together with a consideration to be paid by plaintiff of $11, which said $11 premium was to be paid within one year. The demurrer to count A was properly overruled.
It is insisted by appellant that there was no definite time fixed for the payment of the premium of $11. We do not so read the allegation in the complaint. The obligation of plaintiff was to pay the premium of $11 within the year and to this extent credit was extended plaintiff. That the amount was to be paid in installments during the year, in accordance with a custom long existing between the parties, did not render the time of payment so uncertain as to render the transaction void. Certain it is, if the contract had continued for the year, defendant could have recovered the premium by suit and if for any reason the plaintiff failed to live up to the custom of partial payments the defendant, under the contract, could on five days' notice cancel the policy.
Appellant's counsel seems to misconceive the effect of the allegation in the complaint relative to the making of the contract. The allegations make a completed contract between the plaintiff and defendant's agent and an extension of credit for the premium not to exceed one year. The fact that the $11 was to be paid during the year at indefinite times in amounts according to a custom of dealing between the parties does not render the final due date indefinite or the contract void. If this suit was by the defendant to recover installments due on the $11, the case of City Mortgage Discount Co. v. Palatine Ins. Co., Ltd., 226 Ala. 179, 145 So. 490, would have been in point, but is not in this case. Other cases cited by appellant may be as easily differentiated.
If the contract sued on was in fact made by the defendant, acting at the time through its duly authorized agent, action for loss or damage under the policy will be against the company. 32 Corpus Juris 1144 (252) 2.
Appellant further insists that the complaint is demurrable in that it fails to allege a payment or offer to pay the premium. As authority for this contention, appellant quotes an excerpt from the text of Corpus Juris, 26 C.J. 60, as follows: "Where an action is brought for breach of an oral contract to insure, plaintiff must allege and prove payment or tender of the premium before he can recover." That rule applies where there is no agreement, either expressed or implied, to extend credit as to the payment of premium. The contract of fire insurance, either verbal or written, binds insurer without actual payment of the premium in advance where there is expressed or implied agreement to extend credit to insured. 26 Corpus Juris 61 (55) b.
It is, also, the law declared in many courts of last resort that: "A general agent who has power to countersign and deliver policies, and who is responsible to the company for the premiums and their collections on all policies issued by him, binds the company by an agreement to extend credit to the insured." 26 Corpus Juris 61 (56) 2, note 25. In Royal Ins. Co. v. Eggleston, 19 Ala. App. 638, 99 So. 828, this court held: "The payment or agreement to pay the premium by the insured is a condition precedent to, or at least concurrent with, the assuming of any liability by an insurance company." Such we still hold to be the law.
The action on a verbal contract of insurance, if the same was made by a general agent of the company, is properly brought against the company, and not the company agent. An agreement to insure may be brought against the agent. Sun Ins. Office of London v. Mitchell, 186 Ala. 420, 65 So. 143.
The action is properly brought in the name of the plaintiff. Code 1923, §§ 7015, 7169.
Where there is evidence which if believed authorizes a verdict for plaintiff, the court properly refused affirmative instructions to find for defendant. Such is the case at bar. There was evidence on the part of the plaintiff, not only as to the making of the contract, but as to partial payments of the premium. This evidence was denied and contradicted by defendant's witnesses, but the issue was for the jury. Union Central L. Ins. Co. v. Guffin, 232 Ala. 254, 167 So. 321. Other rulings of the court, if error, did not affect the substantial rights of defendant and in view of what has been said the trial court properly overruled the motion for a new trial.
The judgment is affirmed.
Affirmed.