Hansen v. Farmers Automobile Inter-Insurance Exchange

BARNARD, P. J. Tbe plaintiffs herein are the widow and children of one H. P. Hansen, who died as a result of injuries sustained in a collision between an automobile in which he was riding and another automobile owned by J. F. Scarbrough, which collision occurred about 8:30 o’clock P. M. on April 24, 1931. In another action the plaintiffs herein recovered judgment against the said James F. Scarbrough and an execution was returned unsatisfied. The plaintiffs then brought this action against this defendant, alleging that at the time of the collision referred to the said James F. Scarbrough was covered by a written contract of insurance with this defendant. The purported contract relied on consists of an application for membership and insurance which had been signed by Scarbrough and forwarded to the defendant, a copy thereof being attached to the complaint and marked “Exhibit A”. In its answer the defendant denied that it was a corporation and alleged that it was a reciprocal or inter-insurance exchange. It further denied that exhibit A, attached to the complaint, constituted a contract of insurance and denied that it ever entered into an insurance contract with Scarbrough. The court found that all of the allegations of the complaint were true except that it found that the defendant was and is a reciprocal or inter-insurance exchange, and that Farmers Underwriters Association, a corporation, is the attorney-in-fact for each, all and every of the members of said exchange. From a judgment entered in favor of the plaintiffs the defendant has appealed.

The main question presented is whether the application referred to, and set forth as exhibit A to the complaint, constituted a temporary contract of insurance covering the said Scarbrough and his automobile during the interim between the date named in the application and the time when a policy should be issued or when the application should be rejected. Incidentally, there is involved the question as to whether the agent who took Scarbrough’s application had the apparent or ostensible authority to bind the appel[390]lant by giving tbe said Scarbrough temporary coverage during the interim referred to.

The application in question was dated April 23, 1931, and was signed by Scarbrough on that date. It is entitled “Application for Membership and Insurance in Farmers Automobile Inter-Insurance Exchange.” The first two paragraphs read as follows:

“The undersigned hereby applies for membership in Farmers Automobile Inter-Insurance Exchange, and for insurance in said Exchange for the classes of insurance as set forth below, which shall become effective when the application is accepted at the Home Office of the Exchange, or at such time thereafter as is indicated below.