Opinion
29470.
DECIDED JUNE 27, 1942.
Action for damages; from Fulton superior court — Judge Pomeroy. October 25, 1941.
W. L. Bryan, Bennett Wimberly, for plaintiff.
A. S. Grove, Claud F. Brackett, for defendants.
1. Count 1 of the petition did not set forth a cause of action against the insurance company for damages for the negligent repairing of the premises, for the reason that the insured indorsed a draft for the full amount of her claim which contained a full release of the company on its liability under the policy for the fire damage to the insured premises, and there was no allegation of any incompetency or any emergency, and no reason alleged why the insured did not read the draft. No fraud was alleged which would have authorized the insured to believe that the agent delivering the draft had apparent authority to agree to repair the insured premises as agent of the insurance company.
2. The second count did not set forth a cause of action against the insurance company, for the reason that it did not allege facts sufficient to show that the agent delivering the draft had apparent authority to agree on behalf of the insurance company to repair the insured premises.
DECIDED JUNE 27, 1942.
Mrs. Nell Blalock sued Millers National Insurance Company and J. E. McJenkin for damages. The suit was in two counts, and as amended, alleged substantially the following: Count 1. That J. E. McJenkin, the individual agent, is doing business under the name of McJenkin Insurance Realty Company; that the defendants have jointly and severally damaged plaintiff in the sum of $750; that on April 14, 1939, the insurance company, through its agent, McJenkin, issued a fire-insurance policy to plaintiff; that on October 1, 1940, plaintiff suffered a fire loss on the property insured; that the policy provided "It shall be optional, however, with this company to take all, or any part, of the articles at such ascertained or appraised value, and also to repair, rebuild, or replace the property lost or damaged with other of like kind and quality within a reasonable time on giving notice, within thirty days after the receipt of the proof herein required, of its intention to do so; but there can be no abandonment to this company of the property described;" that within said option period the company issued a draft in the sum of $1000 to plaintiff, and that McJenkin as agent of the company and Mr. Fred Myer, southeastern manager of the company, presented the draft to plaintiff; that when the draft was presented to plaintiff she refused to accept it, and said to the company's representatives, and especially McJenkin, the acting agent in charge of this negotiation, that she did not want the draft but only wanted the company to repair the house; that she stressed the fact that she was a widow and was ignorant of business affairs, that she knew little about contracts, building, and repairs, that she had been defrauded in the past and was satisfied to leave the matter with McJenkin as representative of the insurance company; that McJenkin then and there offered to attend to the repairs, assuring the plaintiff that they would have his personal supervision, and summarily instructed the plaintiff to indorse the draft; that plaintiff having explained her ignorance as to the possible effect of her indorsement of the draft she refused to indorse it; that McJenkin then stated to the plaintiff that the effect of her indorsement would be merely to enable him to obtain funds with which to pay for labor and materials, and that it would expedite his service to her; that he declared his unwillingness to undertake the work unless she immediately indorsed the draft; that McJenkin stated that he was not compelled to undertake the repairs, although he would do so as a favor to her, but that he cautioned her that she must now and presently make the choice between having him supervise the work or depend on persons whom she did not know to be reliable; that the obvious impatience of McJenkin with plaintiff's poor understanding was manifested in such a way as to excite and increase her expressed fear of being defrauded by unscrupulous contractors, and that she was thus induced to sign the draft without having read the same and without knowledge of its effect except as explained by McJenkin, which facts were apparent to said agents present; that upon plaintiff's indorsement of the draft and her turning it over to McJenkin he assured her that the work was now in capable and responsible hands and that it would be done in a good and workmanlike manner; that all the above facts occurred in the immediate presence of Fred Myer, the company's other agent, without comment or criticism on his part; that relying on McJenkin's apparent authority she thus dealt with him exclusively as agent for the company and relied upon his apparent authority to assume and undertake the obligations of the repairs in such capacity; that McJenkin fully knew his lack of authority to undertake the repair of the insured premises as agent of the company, and intending that the plaintiff rely upon his apparent authority fraudulently and deceitfully withheld the true facts in the manner above set out, and that plaintiff without fault or negligence on her part relied on such representations or authority and failure to disclose the true facts, all to her injury and damages; that McJenkin, fully knowing that the effect of the plaintiff's indorsement of the draft would relieve the company of further contractual obligations, did falsely and fraudulently misrepresent such effect in the manner set out above, intending that the plaintiff be deceived thereby and induced to make the indorsement without precautions she ordinarily would have taken, and the plaintiff relied upon such misrepresentations and was induced thereby to incautiously indorse the draft; that the repairs were done in a poor and unworkmanlike manner, etc.; that because of the negligence on the part of the company and its agent, and the deceit thereof she has suffered damages in the sum of $750 and $250 attorney's fees.
Count 2 alleged about the same facts, except that instead of alleging that McJenkin misled the plaintiff as to his authority, etc., it was alleged that plaintiff relied on McJenkin's apparent authority to make the agreement, and that she was without reason to doubt or question the authority of McJenkin to act in such capacity, and that McJenkin, assuming to so act and to thus exercise the option to repair, did assume and undertake to repair the damaged premises. The policy was attached to the petition, and was countersigned at Atlanta, Georgia, by McJenkin Insurance Realty Company, by J. E. McJenkin, president (agent). The draft indorsed by plaintiff was also attached. Just above the indorsement by the plaintiff appeared the following: "In indorsing this draft, receipt is hereby acknowledged of the amount hereof, in full payment and compromise settlement of all claims and demands for loss and damage of the date and under the policy indicated on the face hereof. The insurer is hereby subrogated to all the rights of the insured." The face of the draft also stated that upon indorsement it would constitute full payment, compromise and satisfaction of all claims and damages etc. covered by the policy. The draft was paid. The court sustained the general demurrer of the insurance company to the petition as amended, and the plaintiff excepted.
The gist of the first count seems to be that McJenkin, in the course of the exercise of his actual authority to deliver the draft, committed a fraud upon the plaintiff which justified her in relying upon his apparent authority to agree on behalf of the insurance company to repair the building. This count is without merit, because no fraud is alleged which justified the plaintiff's failure to read the draft and the stipulation appearing over her indorsement. No emergency is alleged, and it is not alleged that the plaintiff could not read or could not understand the stipulations on the draft if she read them. If the plaintiff had read the draft the information gained thereby would have put her on notice that the insurance company had not elected to repair the building but had elected to pay her the amount she had claimed. She should and would have known that if the company desired to repair the building or have it repaired it would not have issued her a draft for her loss providing for a complete release under the policy. What has just been stated also shows that the second count is without merit.
The second count seems to be predicated on the idea that the plaintiff was justified in believing that McJenkin had apparent authority to make the contract, even if he did not commit a fraud justifying the plaintiff in signing the draft without reading it. The petition nowhere alleges that the McJenkin Insurance Realty Company, the agent which countersigned the policy, was a general agent of the insurance company or that it had authority to adjust the loss. In fact it is clearly indicated that the agent delivering the draft was performing a ministerial function of delivering to the plaintiff the amount of her claimed loss, whether in a draft or in cash. The plaintiff did not demand cash; so that issue is not involved. In addition to what has been said, attention should also be called to the fact that the insurance policy provided that "in any matter relating to this insurance, no person, unless duly authorized in writing, shall be deemed the agent of this company." The many cases cited by plaintiff, involving authority of agents, adjusters, and agents authorized to deliver drafts or make payment in cash if demanded, are distinguishable from this case on their facts. Neither count of the petition set out a cause of action, and the court did not err in sustaining the general demurrer and in dismissing the action as to the insurance company.
Judgment affirmed. Sutton, J., concurs.
I concur in the judgment that the first count of the petition does not set out a cause of action. I dissent from the judgment that the second count does not set out a cause of action. From the allegations in the second count it appears that the plaintiff did not accept the draft of the insurance company, but merely indorsed it and left it in the hands of the company, through its agent with whom she was dealing and who had brought her the draft, for the purpose of having the money to be realized on the draft used by the company, through the individual with whom she was dealing and who was the agent of the company, to make the repairs on the plaintiff's house. Shea v. Manhattan Life Insurance Co., 224 Mass. 112 ( 112 N.E. 631). It appears from the allegations that the agent of the company, in agreeing with the plaintiff to take the proceeds of the draft and apply them towards the repair of the house, was acting within the apparent scope of his authority as agent for the company, and therefore that the company was acting through and by him in dealing with the plaintiff. From the allegations it appears that the repairs to the house were made by the company, through its agent with whom the plaintiff dealt, and who had agreed with the plaintiff to make such repairs, and that the company was responsible, as alleged, for failing to properly make the repairs to the plaintiff's damage.