Meiselman v. Wicker, 224 N.C. 417 (1944)

June 2, 1944 · Supreme Court of North Carolina

224 N.C. 417

HERMAN B. MEISELMAN v. PHIL WICKER et al.

(Filed 2 June, 1944.)

Insurance § 11—

Where an agent or broker undertakes to procure insurance for another, affording protection against a designated risk, the law imposes upon him the duty, in the exercise of reasonable care, to perform the obligation he has assumed, and within the amount of the proposed insurance, he may be held liable for the loss properly attributable to his negligent default.

Appeal by defendants from Nimochs, J., at October Term, 1943, of CUMBERLAND.

Civil action to recover damages for negligent failure to keep plaintiff’s theatre equipment insured against loss by fire.

The plaintiff operates two moving pictures theatres, one in Fayette-ville and the other in Rockingham. The defendants are engaged in selling theatre supplies and equipment. In 1939, the plaintiff purchased valuable equipment from the defendants under conditional sales contract, and installed it in his theatres. The defendants carried insurance on their interest in the property.

The complaint alleges: •

1. That on 13 February, 1941, the defendants agreed to provide the plaintiff with repair or replacement insurance against 'loss by fire up to $4,000.00 on his property in the Rockingham theatre for a period of one year; that premiums were to be paid at intervals of 90 days under an extended coverage arrangement, and bills rendered therefor as other items in the open account between the parties.

2. That defendants provided insurance for tbe first three quarters of tbe year in accordance witb their agreement, but failed to provide any during tbe last quarter.

3. That on 26 January, 1942, plaintiff’s equipment in tbe Rockingham theatre was destroyed by fire, and that be suffered a loss of $4,000.00.

Upon denial of liability and issues joined, tbe jury returned a verdict for tbe plaintiff, and fixed bis damages at $3,000.00.

From judgment on tbe verdict, tbe defendants appeal, assigning errors.

W. Louis Ellis, Jr., and Jamies B. Nance for plaintiff, appellee.

Stern & Stern and Nose, Lyon& Bose for defendants, appellants.

Stacy, C. J.

Tbe plaintiff grounds bis action on tbe principle announced in Elam v. Realty Co., 182 N. C., 599, 109 S. E., 632, 18 A. L. R., 1210, that where an agent or broker undertakes to procure insurance for another, affording protection against a designated risk, tbe law imposes upon him tbe duty, in tbe exercise of reasonable care, to perform tbe obligation be has assumed, and within tbe amount of tbe proposed insurance, be may be held liable for tbe loss properly attributable to bis negligent default. See, also, Boney v. Ins. Co., 213 N. C., 563, 197 S. E., 122; Anno. 18 A. L. R., 1214; 8 Am. Jur., 1043.

It is alleged that tbe plaintiff relied on tbe defendants to see that bis property in tbe Rockingham theatre (also in bis Fayetteville theatre) was insured against loss by fire as per agreement and according to tbe usual course of dealing between them. This is denied by tbe defendants, but tbe direct conflict in tbe evidence has been resolved against them. Tbe jury might have taken either view of tbe matter. After all, tbe case presents little more than a controverted issue of fact, determinable alone by tbe twelve. Tbe plaintiff’s evidence tends to establish liability-; tbe defendants’ just tbe reverse. Tbe conflict is sharp and irreconcilable.

Tbe defendants advance tbe theory that if tbe agreement were to provide “repair or replacement insurance,” as alleged, no demand has been made on them to repair or to replace tbe property, and therefore tbe plaintiff has no cause of action or right of recovery. This contention apparently arises from a misconception of tbe gravamen of tbe complaint. Tbe plaintiff is not seeking to recover on tbe contract, which would have existed bad tbe policy been procured, but for negligent failure to provide tbe insurance as agreed. Hence, a different situation arises; likewise, a different cause of action, for which tbe plaintiff sues.

Tbe principal exception urged by tbe defendants is tbe one addressed to tbe court’s failure to sustain tbe demurrer to tbe evidence and dismiss tbe action as in case of nonsuit. Tbe ruling is supported by tbe record. None of tbe exceptions can be sustained.

As ilo reversible error bas been made to appear, the verdict and judgment will be upheld.

No error.