Where a local agent has authority to issue and deliver a policy of insurance insuring an automobile against fire and theft and collision, in reliance upon declarations by the insured which are to be inserted in the policy itself by the agent of the insurer, and where the agent has authority to issue a policy in spite of an existing encumbrance provided it is so stated in the policy, the law will imply the authority of the agent to waive encumbrances and the failure of the agent to make inquiries of the insured as to the existence of encumbrances and the leaving blank of the space provided in the policy for the facts as to encumbrances is a waiver of such encumbrances as exist and such a policy is not ineffective to cover a loss to an automobile, encumbered by a conditional sale, under a provision of the policy which provides that the policy does not apply where the automobile is subject to a conditional sale not specifically declared and described therein.
Wade Cash sued the Pacific Fire Insurance Company to recover under his policy of insurance to collect for damage to the automobile covered by the policy by reason of a collision. The insurance company answered and contended that the policy did not cover the loss because of a provision of the policy that it did not apply when the automobile was subject to a conditional sale not specifically declared and described in the policy. The jury found for the plaintiff in the amount of damages agreed on by the parties. The insurance company excepts to the overruling of its motion for a new trial.
The defendant in error contends that the verdict was authorized on several theories. A consideration of one will be sufficient for a determination of the case. The policy sued on was issued by Mrs. R. V. Jones, local agent at Cartersville, Georgia. There was no written application for the policy either attached or detached. Item 1 of the policy was partly as follows: "Ownership: Except with respect to bailment lease, conditional sale, mortgage or other encumbrance the insured is the sole owner of the automobile, except as herein stated: No exceptions." Since the defendant insurance company seeks to avoid liability under the policy for violation of a provision against encumbrances undisclosed and since the above provision excepts encumbrances, such provision is not pertinent. Item 4 of the policy contained blank spaces for "Description of the automobile and facts respecting its purchase by the insured:" Blanks were provided for the following items, all of which left blank where not otherwise specified. "Year Model, 1939, Make of Car, Ford; Model, --------; Body Type etc., 4 Door Sedan; Serial Number and Motor Number, M 52442; No. of Cyls.-------- ; F. O. B. List Price or Delivered Price at Factory, --------; Actual Cost when purchased including equipment, --------; Purchased, Month -------- Year --------, New or Used, Used; The automobile --------; is unencumbered unless otherwise stated herein: Encumbrance, --------; Instalment Payments, --------; Due Date and Amount of Final Instalment, --------." Paragraph "5. Use: The purposes for which the automobile is to be used are, Business and Pleasure." Paragraph 14 of the conditions in the policy is in part as follows: "This policy shall be void if the insured has concealed or misrepresented any material fact or circumstance concerning this insurance or the subject thereof . . ." Under "Exclusions" the policy contained the folloWing provision: "This policy does not apply: . . . (b) under any of the coverages, while the automobile is subject to any bailment lease, conditional sale, mortgage or other encumbrance not specifically declared and described in this policy." This is a case in which the local agent is authorized to pass on the risk, issue and deliver the policy. The insured had no opportunity to read the policy before its issuance. The insured testified that he answered all the questions asked him by the insurance agent, which she did not deny. Under the facts of this case we think that the insurance company waived the outstanding conditional-sale contract, assuming for the sake of argument that the evidence was sufficient to show that there was one. Item 3 of the policy provided: "In consideration of the payment of the premium and in reliance upon the statements in the declarations . . . the company agrees to pay," etc. While there was no application, the plan of the policy amounts to the making of an application which is in the exclusive possession of the agent and an insured has to rely on questions by the agent in order to furnish the information desired by the agent. Inasmuch as the agent had the authority to insert in the policy the fact that the automobile was encumbered and to nevertheless issue the policy, her failure to make inquiry of the insured as to encumbrances, will be held to be a waiver of the existence of encumbrances. See 29 Am. Jur. 436, 437, 540. The jury was authorized to find that the agent did not make inquiry concerning encumbrances and that any encumbrances were therefor waived. The circumstances of this case make it analogous to one where an agent acts for an insurance company in filling out an application, and as such fails to make material inquiries called for by the application.
The court did not err in overruling the motion for a new trial.