
    ADAMS v. ROYAL EXCHANGE ASSUR.
    Supreme Court of Florida, en Banc.
    Jan. 18, 1952.
    On Rehearing Jan. 13, 1953.
    
      Coé & Coe, Pensacola, for appellant.
    Yonge, Beggs & Lane, Pensacola, for appellee.
   CHAPMAN, Justice.

. The plaintiff-appellant, Captain G. W. Adams, filed a common law action in the Court of Record of Escambia County, Florida, to recover on a policy of marine insurance issued by Royal Exchange Assurance, a corporation. The complaint alleged that the defendant, through its agent, The Brosnaham Agency, Inc., of Pensacola, Florida, for a premium'of $1,920 then paid or secured, issued its -policy of insurance upon plaintiff’s 63’ Gas Twin Screw Yacht “Surlew” against certain risks inclusive of fire, to the amount of $20,000. A copy of the insurance policy was attached to the complaint and made a part thereof by appropriate allegations.

Thereafter, on July 31, 1950, while the policy of insurance was in full force and effect, the said Yacht “Surlew” was burned and totally destroyed by fire in the coastal waters of the Gulf of Mexico off the West Coast of Florida, under such circumstances as to render liable and oblige the defendant to pay the sum of $20,000 of which the defendant had due notice and proof of loss which entitled the plaintiff to said payment of $20,000 by the defendant, but the defendant failed and refused to pay the same. The complaint seeks as additional thereto interest and attorneys’ fees. -

The answer of the Royal Exchange Assurance, defendant-appellee, to the complaint admitted: (1) the issuance of the policy of marine insurance sued upon; (2) it alleged that, the policy of .insurance was void for enumerated reasons; (3) denied that it was liable to the plaintiff in the sum of $20,000 for reasons set .out in its affirmative defenses; (4) it denied liability to the plaintiff - for reasonable attorneys’ fees incurred in the proceeding; (5) it denied that plaintiff was entitled to the judgment claimed in the complaint.

As, an affirmative defense to the complaint, the defendant set out: (1) the plaintiff, on or about July 1, ' 1950, made application in writing through defendant’s agent for the issuance of a policy of marine insurance on the Yacht “Surlew” and plaintiff signed the same; (2) plaintiff’s application stated and represented to defendant’s agents, among other things, that he was then President of Pensacola Yacht Basin, Inc., and that no underwriter had ever refused insurance to the plaintiff; (3) the said statements and representations were made by the plaintiff to the defendant’s agent for the purpose of inducing defendant to make, enter into and issue the policy of marine insurance sued upon; (4) the defendant relied upon the statements and representations of the defendant and issued and delivered to the plaintiff the policy sued upon; (5) the statements and representations contained in said application were, and each of them was, material to the risk and to the subject matter of said insurance; (6) the said statement and representation were false, untrue and misleading as plaintiff well knew * * * in that other underwriters had refused insurance to the plaintiff on the same Yacht within a comparatively short period of time prior to the signing of the said application by the plaintiff; (7) because of the false, untrue and misleading' statements and material misrepresentations so made by the plaintiff the policy of insurance sued upon is invalid; (8) the defendant tendered to plaintiff the premium of $1,920 with interest, and deposited the amount in the registry of the Court.

Plaintiff through counsel replied to the affirmative defenses numbered 2, 3, 4, 5, 6 and 7 substantially as follows: prior to the time of application for the policy sued upon plaintiff made application to the Marine Office of America, a marine insurance underwriter, for insurance upon the Yacht “Surlew”, but the insurance policy did not issue due to the unwillingness of the underwriter, for reasons unknown .to the plaintiff, to assume the risk; that no other underwriters had at any time refused plaintiff insurance; the policy sued upon was issued to plaintiff through Siebels, Bruce & Company, which at the time was the manager of defendant’s Southern Department, and acted as its agent in the investigation of risk and the issuance of the policy sued upon; it was authorized as defendant's agent, in its discretion, to issue or refuse to issue the policy; Siebels, Bruce & Company was not the agent of plaintiff, but an insurance broker, and applied to the Marine Office of America for coverage and by it informed of all facts incident to the application for the insurance on the “Sur-lew”, and of the Marine Office of America previously declining to issue the insurance on the “Surlew”.- Said Siebels, Bruce & ' Company had full knowledge of said facts as agents of defendant prior to and at the time defendant authorized and caused to be issued the policy sued upon.

Evidence was adduced before a jury, by the respective parties. in support of the issues made by the. above pleadings and, after argument of counsel and instructions upon the law by the trial Court, the jury returned a verdict in the cause for, the defendant-appellee. The plaintiff filed a motion for a new trial on grounds: (1) the verdict was contrary to the evidence; (2) the trial Court erred in overruling plaintiff’s motion to strike the evidence of the witness Herbert Pfeiffer, Jr.;. (3) the Court erred in overruling plaintiff’s motion to strike the evidence of the witness J. E. Daniels; (4) the Court erred in refusing to permit the plaintiff to make proof of the circumstances surrounding the burning of the “Surlew”. The motion was duly overruled, judgment for the defendant entered in the Court below and the original plaintiff appealed.

According to the record, Julius E. Daniels was called as a witness for the defendant and testified that he was engaged in the general insurance business in the City of Pensacola. The plaintiff, Captain Adams, called over the telephone and wanted some 90-day or short term marine insurance on his Yacht “Surlew”. “I told him he might get what everybody was using on shrimp boats.” “I told him I didn’t care to handle it.” “Q. You declined to handle his application? A. I declined not to take his application.”. On cross examination the witness stated that he was not a marine operator.' He further stated (Tr. 71) that he was furnished with blanks and could submit complete information on the part of an applicant to the Marine Office of America at New Orleans for marine insurance. The Marine Office only had the power' to accept or reject the application for marine insurance. The witness had authority to issue and deliver policies of insurance in behalf of his fire insurance companies to applicants at' his own discretion. The witness further stated (Tr. 73) : “We are not agents for any marine. Marine of America is the one we do business with.” Also on Tr. 74: “Q. The only thing you can do in a marine risk is to submit the application? A. Positively.” Counsel for plaintiff ’ objected to the witness’ testimony and moved to strike same, but the trial Court denied the motion.

Plerbext Pfeiffer, Jr., was called and testified as a witness for the defendant. He testified as to being an insurance agent engaged as such in the Pensacola area. •Captain Adams called him over the phone and asked about trip coverage from Pensacola to South Florida. “I declined the insurance.” Captain Adams called over the phone the second time and inquired about the cost of coverage on his boat. “I advised” that it was impossible to give him any cost on this type of coverage because a survey of the boat was necessary. We would submit the same to the Company for quotations. On cross examination the witness stated they placed their marine insurance with underwriters operating out of Pensacola. “We did not submit Captain Adams’ application for marine insurance to the Marine Office of America (New Orleans). Captain Adams just called and asked df we could give him trip insurance and we replied that we could not.” The inquiry was not passed on the Marine Office of America.

The witness Pfeiffer was later recalled for cross examination (Tr.' 74-5). He stated that his office'issued fire insurance policies on houses and buildings in Pensacola — the agents are clothed with a broad discretion in accepting and rejecting applications for fire insurance policies:

“Q. Do you handle marine policies the same way ? Suppose I bring my $20,000.00 yacht in here and say ‘Mr. Pfeiffer, I want a $20,000.00 yacht policy’. Do you write it? A. No, sir.

“Q. What do you do? A. We submit the application to the Marine Office of America.

“Q. Some times they accept it? A. They will not always accept the policy.

“Q. Some times they reject it? A. Well, I believe, — I don’t know, I am not that familiar with marine underwriting.

“Q. Have they got to write every policy you send in there ? A. No.

“Q. You send in the application, and they accept or reject it? A. That’s correct.”

Thereupon the witness was excused.

“Mr. Coe: I renew my motion.

“The Court: Motion denied and exception noted.”

The defendant’s-appellee’s requested charge No. 17 as given by the trial Court was based on the testimony of the above named witness. ' It is contended here that the above'testimony, coupled with the said charge, was clearly erroneous. The charge is viz.: “Should- you find that the defendant or its agents acquired knowledge of one refusal of insurance for the plaintiff, but the plaintiff was actually refused insurance by more than one other underwriter, then the knowledge of the defendant insurance company would not be full and complete, and your verdict should be for the defendant. In other words, you must find that the defendant insurance company had knowledge of all refusals of insurance to the pláintiff before the effect of any misrepresentation in the application on this score can be overcome.”

It is clear that neither of the witnesses had the authority to accept or reject applications for marine insurance, but did have a broad discretion in accepting and rejecting as well as issuing policies of fire insurance on buildings in the Pensacola area. These witnesses were permitted to testify that the application of the plaintiff for marine insurance was by the witnesses rejected, while their authority was limited to receiving applications and transmitting same to the Marine Office of America at New Orleans, where other officials had the discretion to accept or reject the applications. The motion to strike this testimony should have been granted. The evidence and foregoing instruction were prejudicial.

The judgment is reversed and a new trial awarded.

HOBSON, ROBERTS and MATHEWS, JJ., concur.

SEBRING, C. Jv and TERRELL and THOMAS, JJ., dissent.

On Rehearing Granted.

HOBSON, Chief Justice.

We do not consider it necessary to outline again the history of this case or to repeat the questions which are presented for determination on this appeal. Our original opinion, we believe, provides sufficient information concerning this suit to make our opinion upon rehearing understandable to the members of the bench and bar.

Counsel for appellee contend that we should recede from our former opinion and judgment because,

“(1) Plaintiff admits and the evidence conclusively shows one refusal of insurance to him which he falsely concealed from the defendant. One fraudulently concealed refusal is just as effective to defeat his right of recovery as three such refusals.
“(2) The evidence of the two insurance solicitors of plaintiff’s efforts to obtain insurance through them was clearly admissible either (a) as evidence of additional refusals, or (b) as bearing upon the fraudulent intent and knowledge of the plaintiff at the time he misrepresented that there had been no refusal when in fact one refusal had admittedly occurred, and (c) in explanation and contradiction of the testimony previously given by the plaintiff himself in which he detailed these same transactions in a manner and with a color calculated to strengthen his own case.
“(3) The opinion is based in large part on a charge of the court to which appellant took no exception in the lower court. It is not proper for the correctness of the charge to be challenged or considered for the first time in the appellate court. Rule 39(b).”

Appellant naturally takes the position that we should adhere to our opinion and judgment of reversal. It is the contention of counsel for appellant that it was harmful, prejudicial and, therefore, reversible error for the jury to be permitted to consider the .testimony of the witnesses Herbert Pfeiffer, Jr. and J. E. Daniels because such testimony was immaterial, irrelevant and incompetent and was considered by the jury in the light of a charge by the court to the effect that the declinations or refusals of Pfeiffer and Daniels to hándle appellant’s application for a policy of fire insurance on his yacht “Surlew” were actually refusals of other underwriters when in truth and in fact these gentlemen were not properly classified in that category.

There is in this record before us competent substantial evidence which justified the jury in determining that (1) appellant had been refused insurance on his yacht by at least one underwriter and that he falsely represented to appellee that he had not theretofore been refused insurance by any other underwriter; (2) appellant failed to establish that appellee had lcnowl-edge prior to the issuance of the policy in suit that appellant had been refused a policy of insurance by the Marine Office of America. However, appellant insists if such be the case it does.not follow that the admission by the court of evidence of two alleged refusals by underwriters, which he contends were not established as such, was harmless error.

In our original opinion we concluded that the testimony of witnesses Pfeiffer and Daniels should have been stricken by the trial judge upon motion made by counsel for plaintiff (appellant herein). We decided that the testimony of neither of these witnesses established that appellant had made a false representation to appellee in his application for insurance because neither of these witnesses was in fact an underwriter but each was only authorized to submit applications for marine insurance to the Marine Office of America located in New Orleans, where such applications would either be accepted or rejected. We concluded, inferentially at least, that their testimony was not admissible upon any theory. However, our actual determination was that the admission of such testimony could not be considered harmless error because of the following charge which was given as appellee’s requested charge No. 17 by the trial judge:

“Should you find that the defendant or its agents acquired knowledge of one refusal of insurance for the plaintiff, but the plaintiff was actually refused insurance by more than one other underwriter, then the knowledge of the defendant insurance company would not be full and complete, and your verdict should be for the defendant. In other words, you must find that the defendant insurance company had knowledge of all refusals of insurance to the plaintiff before the effect of any misrepresentation in the application on this-score can be overcome.” (Italics supplied.)

Upon a careful reconsideration of this case in the light of able argument made, and briefs filed, by counsel for the respective litigants, we have concluded that it was not harmful error on the part of the trial judge to give the foregoing charge although, standing alone, it might have given rise to the thought that the trial judge considered the testimony of Pfeiffer and Daniels to amount to refusals on the part of other insurers or underwriters to issue a policy of insurance to the appellant and that said judge was so advising the jury. However, we have repeatedly held that all of the charges given by.-the trial judge to the jury will'be considered by us in determining the question whether any one charge might- have misled • the jury or , prejudicéd it against the appellant. We find that any prejudice which might have developed as a result of the trial judge’s charge No. 17 was completely eradicated by. the "court’s charges numbers 9 and 10 requested by appellant in which the trial judge clearly defined an underwriter as. - well as an agent and left no doubt as to the distinction which exists -between them. These charges were:

. “9. The Court charges you that an underwriter is an individual or business firm having power and authority to write contracts of insurance; that a mere agent with power-to take applications for insurance and forward them for approval or disapproval to his underwriter is not himself an underwriter, and if no application is made to, an -underwriter or its duly authorized agent, and none is forwarded by the agent to the underwriter, it cannot be said that such underwriter has refused insurance, even if the agent has declined to act for its issuance.”
“10. No. 10 is given in an amended form: ‘The court charges you that mere negotiations with an insurance agent, without power himself to issue a policy of marine insurance, or power to refuse to issue such policy, not resulting in an application or any communication with his underwriter who must approve or disapprove of the policy which might be applied for, and even if such agent declines, neglects or refuses to accept and forward an application, does not constitute refusal of insurance by an underwriter’.”

These charges are definite and specific and completely eliminate the possibility of the jury having been misled or prejudiced against appellant by virtue of -charge No. 17.. Moreover, no exception was taken by appellant in the lower court to the giving of this charge. It is not proper for appellant to challenge the propriety of such charge for the first time on appeal. See 30 F.S.A.Rules of Common Law, rule 39(b) and Eli Witt Cigar & Tobacco Co. v. Matatics, Fla., 55 So.2d 549.

Since we have determined that the giving of charge No. 17 was not harmful or .prejudicial error, we turn to the query, was the testimony given by Pfeiffer and Daniels admissible for any purpose, although it was riot sufficient to establish refusals of insurers or underwriters to issue a policy of insurance to appellant prior to his written application filed with the ap-pellee?

Since the defense of a misrepresentation 'by appellant in his application was in essence a defense on the ground of fraud, the good faith of appellant is necessarily involved. We quote with approval from 20 Am.Jur. 320, paragraph 345:

“Whenever issues of * * *
fraud, and good faith are raised, the evidence must take • a rather . wide range and may embrace all of the facts and circumstances which go to make up the transaction, disclose its true character, explain the -acts of the parties, and throw light on their objects and intentions.”

We further quote with approval from 37 C.J.S., Fraud, § 104, p. 410:

“Where a question of fraud is involved, great latitude is ordinarily permitted in the introduction of evidence * * *>>

At this juncture we pause to recite a portion of appellant’s own statement in a discovery deposition which we consider significant upon the question of the existence of mala fides which question is implicit in the factual structure of this case. We quote:

“If you go buy a suit of clothes you don’t .want to tell the man you have been there first and then try the other place.. If you do, they will hold you up.”

We hold that the testimony of the witnesses Pfeiffer and Daniels was not wholly immaterial and irrelevant because of the inherent issue of appellant’s good faith. Appellant in his testimony anticipated the appearance of Pfeiffer and Daniels as witnesses for appellee and in detail gave his version of his transactions with them. Their testimony was therefore also admissible in explanation and ■ contradiction of appellant’s own testimony.

'We are further of the view that the admission of the testimony of these two witnesses did not constitute harmful error because of the clear charges Numbers 9 and 10 given by the- court which left no doubt that Pfeiffer and Daniels were merely agents with power only to take applications for insurance and forward them for approval or disapproval to the underwriter and that neither of these gentlemen was in fact an underwriter. It was also made •clear by the trial .judge in these charges that the declination or refusal to issue insurance by one who is only such an agent, does not amount to a refusal of an underwriter.

We have decided to recede from our former opinion and judgment and affirm the judgment from which this appeal was prosecuted.

Affirmed.

TERRELL, THOMAS and SEBRING, JJ., and HOCKER, Associate Justice, concur.

ROBERTS and MATHEWS, JJ., dissent.  