Fleming v. Employers Mutual Liability Ins. Co. of Wis.

153 S.E.2d 60 (1967)

269 N.C. 558

F. T. FLEMING, Sr. v. EMPLOYERS MUTUAL LIABILITY INSURANCE COMPANY OF WISCONSIN.

No. 30.

Supreme Court of North Carolina.

March 1, 1967.

*62 Redden, Redden & Redden, Hendersonville, for plaintiff appellant.

William J. Cocke, Asheville, B. Boyd Massagee, Jr., Hendersonville, for defendant appellee.

PLESS, Justice:

The obligation of Riegel Textile Mills to pay the plaintiff has not be determined either by judgment, or "by written agreement of the insured, the claimant and the company". Under the terms of the policy the above is a condition precedent to any claim or action against the defendant. It also provides that the terms of the policy cannot be "waived or changed, except by endorsement issued to form a part of this policy, signed by an executive officer of the company".

In Muncie v. Travelers Ins. Co., 253 N.C. 74, 116 S.E.2d 474, in which the plaintiff was seeking to hold the defendant under an automobile liability policy, the Court said where a provision of the policy is valid, the parties are entitled to have it enforced as written, and "this Court has consistently held that plaintiff has the burden of showing that he has complied with those conditions precedent to his right to maintain his action"; and "[t]he general rule requiring plaintiff to establish compliance with contractual conditions precedent has general recognition". It also holds that "[t]he general rule imposing on plaintiff the burden to establish his compliance with conditions precedent to the maintenance of his action has been frequently applied in actions on liability policies by courts of sister states". Fourteen North Carolina cases and more than a dozen from other States are cited to substantiate the above.

But the plaintiff contends that the defendant entered into a verbal agreement to pay which gave rise to an action in favor of the plaintiff to enforce it. While he does not plead in technical terms a waiver of the provisions of the policy, his position, if sustained, would have that result. Thus, unless the plaintiff can offer evidence waiving by other means the provisions of the policy, he cannot prevail.

He seeks to prove this by an alleged statement of a lady in the claims department of the defendant that they would pay the bills for having the plaintiff's truck fixed, and that they would pay for another tractor to do the hauling while the vehicle was being repaired. The evidence is completely silent as to the position of Mrs. Graham with the defendant company. There is no presumption that one who answers the telephone in a business office may waive the provisions of an insurance policy in direct violation of its terms, nor otherwise bind the employer in matters of importance.

"A third person dealing with a known agent may not act negligently with regard to the extent of the agent's authority or blindly trust the agent's statements in such respect. Rather, he must use reasonable diligence and prudence to ascertain whether the agent is acting and dealing with him within the scope of his powers. The mere opinion of an agent as to the extent of his powers, or his mere assumption of authority without foundation, will not bind the principal; and a third person dealing with a known agent must bear the burden of determining for himself, by the exercise of reasonable diligence and prudence, the existence or nonexistence of the agent's authority to act in the premises." 3 Am. Jur.2d, Agency § 78.

*63 In his brief the plaintiff cites a number of North Carolina cases as well as other authorities to the effect that an agent of an insurance company may by his acts or declarations waive certain provisions of the policy. An examination of the authorities cited shows, however, that these usually refer to requirements as to proof of loss, filing them on time, and other similar technicalities. In all instances cited wherein a waiver results, it requires that if the insurer "through the conduct of an agent acting within the scope of his authority" cause the third party to lose a substantial position, etc., the insurer may be bound.

In Williams v. State Highway Comm., 252 N.C. 514, 114 S.E.2d 340, the plaintiffs sought to introduce a statement made by an employee of the defendant in regard to damages which was excluded by the lower court. Winborne, C. J., speaking for the Court, said: "The extra-judicial declarations were not competent to prove the agency of the declarant. * * * Even if it be conceded that declarant was respondent's agent, there was no showing that the quoted statements were within the scope of authority of declarant, and the burden of so showing was on petitioners. Fanelty v. Rogers Jewelers [Inc.], 230 N.C. 694, 55 S.E.2d 493; Sledge v. Wagoner, supra [250 N.C. 559, 109 S.E.2d 180]."

Here we have nothing more to show agency than that Mrs. Graham answered the telephone and the plaintiff has noticeably failed in the necessary requirement of showing that she was acting within the scope of her authority.

The record does not indicate any consideration moving to the defendant for the alleged admission of liability by Mrs. Graham, and the plaintiff has surrendered no right in the transaction. We can find nothing in this record to prevent the plaintiff from suing Riegel and establishing its negligence, (which would eventually result in liability on the part of the insurer) if the evidence as to the collision will permit.

We are of opinion that the action of the lower court in sustaining the motion for judgment as of nonsuit was correct, and it is hereby

Affirmed.