76 Tenn. 513 | Tenn. | 1881
delivered the opinion of the court.
The American Central Insurance Company has appealed in error from a judgment recovered against, it by McCrea, Maury & Co. on one of its policies insuring against loss by fire.
May 15, 1872.
1 Liverpool, London & Globe, with privilege of §10,000 additional, §5,000
.2 Franklin, “ 5,000
8 American Central, “ “ 5,000
January 7, 1873.
4 Koyal, with privilege of §25,000 additional, 5,000
5 Boatman, “ “ 2,5.00
6 Citizens, “ “ 2,500
January 10, 1873.
7 Equitable, with privilege of S25,000 additional, 5,000
January 14, 1873.
8 Louisiana Mutual, with privilege of §15',000 additional, 5,000
These policies were all issued for one year from their respective dates. The first seven of them covered both stock and machinery, one half of the amount ■called ..for being on each. The last policy, that of the Louisiana Mutual, was exclusively on the stock of liquors. ■ The insurance on stock was, therefore, in the sum of $20,000, and on machinery $15,000, in all’ $35,000.
McCrea, Maury & Co. brought separate suits on each one of these policies. The suit on the first policy against the Liverpool, London & Globe Insurance Company, was .compromised before the trial. ■Judgment was recovered on the second policy, against
The policy of the American Central was issued May 15, 1872, for one year, in the sum of $5,000, one-half on the stock of liquors, and one-half on the machinery, with the privilege of $10,000 additional insurance. It contained the following provision: • “If the assured shall have, or shall hereafter make any other insurance on the property hereby insured, or any part thereof, without the consent of the company written hereon; or if the above-mentioned premises shall be occupied or used so as to increase ' the risk, or the risk be increased by any means whatever within the control of the assured, without the assent of the company endorsed hereon; or, if a manufacturing establishment, running at night, then in every such case
The insurance on the property was, after the issuance of this policy, increased, as we have seen, to $35,000. There was proof also tending to show that, •in the months of October, November and December, 1872, the building, in which the stock and machinery Were located, was changed so as to increase the risk. It was admitted, moreover, that the distillery had always been run at night, and was so run beforé, at the ■time of, and after the issuance of the defendant’s policy. No endorsement of the consent of the company to the additional insurance, change of risk, or running at night had ever been made upon the policy. The policy was, however, issued at the same time with the policies of the Liverpool, London and Globe and the Franklin -companies, and by the same agents, Peck & Cahill, who were the agents of all three of the companies, these companies being foreign corporations. -The defendant, the American Central, was a corporation chartered by the State of Missouri, and having its principal place of business at St. Louis. It was doing ■business in this State under our insurance laws, through
During the year 1872, and probably before the issuance of the policies of May 15, 1872, although the fact does not distinctly appear, McCrea, Maury & Co. had taken out policies of insurance on their stock to the extent of $5,000, through other agents, in the .¿Etna and Queen’s companies, one-half the amount in each. These companies declined to continue the risks after the changes made by the insured in the building in the latter part of the year, and, at the instance of the agents of these companies, the policy of the Louisiana Mutual was taken out on January 14, 1873, for the same amount on the stock alone. Peck & Cahill knew of the original insurance for this sum, although they seem to have thought that it was exclusively in the ¿Etna. They did not know of the policy of the Louisiana Mutual until after the fire. At their solicitation, they were authorized by McCrea, Maury & Co., early in January, 1873, to place $15,000 more of insurance on the property, and undertook to do so .with the knowledge that, if effected, the entire insurance would be $35,000. Under this authority, Peck & Cahill did obtain the additional insurance in the Royal, the Boatman, the Citizens and the Equitable companies, in all $15,000. These policies were received by them before the fire, but were not delivered to McCrea, Maury & Co. until after the fire. The premiums were paid and
No endorsement of the additional insurance was made upon the policy of the American Central. There is proof, however, that Peck & Cahill, a week or two before the fire, requested McCrea, the active member of McCrea, Maury & Co., to bring up the policies held by the firm- to be endorsed with the additional insurance, and that only a few days before the fire McCrea proposed, at the office of Peck & Cahill, to go after the policies for the purpose of having the endorsements made on them, and was requested not to-do so because of some repairs then being made in the office.
Each of the other policies of January 7th,- and the-two policies of the 10th and 14th of January, contained the same provisions as those of the American Central policy touching over insurance, increase of risk, running at night and waiver of conditions. No endorsement was made on any of them of the consent of the company to the previous or subsequent insurance, as the case may be. The records of the suits on the Boatman and Citizens’ policies, introduced in evidence,
It seems to be well settled that when a contract of insurance is executed with a full knowledge of an existing fact which would render it void under a condition precedent embodied therein, the condition or its breach will be considered as waived, because otherwise it would be an unmeaning form, the only effect of which would be to deceive and defraud. Where, therefore, a policy of insurance on a house provided on its face that if the building insured was on leased land the fact must be expressed in writing in the policy, and the house was on leased property and the fact not so expressed, the truth being known to the agent of the company issuing the policy, the court felt itself constrained “ by the force of authority ” to hold that the condition was waived: Van Schoick v. Niagara Fire Ins. Co., 68 N. Y., 434. So, where the policy contained a condition that it should be void if refined, coal or earth oils were used on the premises, and the agent had inspected the premises and knew that kerosene oil was used for lighting them: Bennett v. North British, etc. Ins. Co., 81 N. Y., 273. So, of the condition that the policy should be countersigned by the local agents: Myers v. Life Ins. Co., 27 Penn. St., 268; Hibernia Ins. Co. v. O’Connor, 29 Mich., 241. So, of the condition that a memorandum of prior insurances should be made on the policy: Crane v. National Ins. Co., 16 Md., 269. So, of the customary clause in a policy that it will not .be binding until the premium is paid in fact: Eagan v. Ætna Fire Ins. Co., 11 W.
The defense is rested upon the over insurance and the increase in the risk by the change of the building after the issuance of the policy.
The policy of the American Central allowed additional insurance to the amount of |10,000, and to that extent furnished its own rule of construction as to the definiteness meant to be required in the consent to future insurance: Westchester Fire Ins. Co. v. Earle, 33 Mich., 144; Philbrook v. New England Mut. Ins. Co. 37 Me., 137. It is not contended that the additional insurance thus allowed required any further consent, or any endorsement on the policy. The amount allowed was covered by the other two policies issued on the same day. The insurance in the .¿Etna and Queen, whether obtained before or afterwards, and the insurance afterwards obtained in the other companies mentioned were in excess of the amount allowed, and were never endorsed on the policy. Nor was the increase in the risk, if the risk was increased by the change in the buildings, ever sanctioned by an endorsement of the consent of the company on the policy. The answer made to these defenses is that the conditions were waived by the knowledge of the agents of the
The question, raised and argued in the other cases of McCrea, Maury & Co., that the subsequent insurance, being void by over insurance or other cause, will not affect the policy in suit, does not arise in this case. Eor the policy of the Louisiana Mutual, which was on the stock alone, expressly allowed $15,-000 of additional insurance, and as the entire amount, of insurance then existing on the stock was only $20,-000, there was no over insurance as to this company. And the recovery of judgment on this policy, which was acquiesced in, shows that there was no other ground for impeaching its validity. There was, therefore, over insurance so far as the American Central is concerned, by reason of the subsequent policy of the Louisiana Mutual. The issue is consequently narrowed down to that of waiver or estoppel.
“ What acts or declarations,” say the learned editors of the American Leading Cases, “will operate as a waiver of the warranties or conditions, which play a large and important part in most modern policies' of insurance on life or against fire, is a question about which the authorities differ too much to be easily reduced to order and method. For while the courts have been desirous on the one hand to carry out the general purpose of the contract as one of indemnity, they have been fettered on the other by stipulations introduced as safegards against fraud or malpractice, and the conflict has arisen between the general design and the
The policy in suit undertakes to provide that the consent of the company to additional insurance over; the amount allowed,, and to any increase of risk, shall', be endorsed on the policy, and that this condition shall j not be waived except by a specific agreement, clearly ^ expressed and endorsed on the policy. It was at first held by the courts, when these requirements were' inserted in policies, to be essential that these requirements should be literally complied with, and that anything short of the prescribed formalities would work a forfeiture.But the weight of authority is now that if notice be duly given to the company, or its agent, of the additional insurance or increased risk, and no objection is-made, the company will be estopped to insist upon a.
The reasoning by which the ■ later conclusion is reached may be briefly epitomized. In the first place, the contract of insurance is not within the statute of frauds, and may be by parol: Commercial Ins. Co. v. Union Mut. Ins. Co., 19 How., 318; Relief Fire Ins. Co. v. Shaw, 94 U. S., 574. The policy may, therefore, be renewed by parol, and from year to year: Sanborn v. Fireman Ins. Co., 16 Gray, 448; Post v. Ætna Ins. Co., 43 Barb., 351. The policy may be thus renewed after the property insured has been sold contrary to its terms, and the interest of the 'assured turned into that of a mortgagee: Whited v. Germania Fire Ins. Co. 76 N. Y., 415. The contract may be made retrospective by parol: Security Fire Ins. Co. v. Kentucky M. & F. Ins. Co., 7 Bush, 81. It seems to follow that a parol permission may equally be given, although the terms of the policy require the permission to be endorsed on the policy: N. W. Iron Co. v. Ætna Fire Ins. Co., 26 Wis., 78. Or a forfeiture waived by parol: Warren v. Ocean Ins. Co., 16 Me., 439. And, a fortiori, where there is an understanding that the endorsement shall be made: Rathbone v. City Ins. Co., 31 Conn., 193.
!A written contract may be changed by parol, and this although it stipulate that it shall only be changed in writing, for the obvious reason that men cannot ■tie their hands or bind their wills so as to disable
A contract, express or implied, founded upon sufficient consideration, even though it be only by way of injury to one of the parties, would fall within these principles. And the cases go to the extent of holding that if the agent be authorized to do the act required by the condition, he may bind the company by his parol waiver. For it is in the nature of a condition precedent to be subject to waiver, and that may be either oral or in writing: Pitney v. Glen’s Falls Ins. Co., 65 N. Y., 25. In this connection it may be noticed that the decisions have transferred to the courts of law in this class of cases, the equitable doctrine of' estoppel, where a parol license or assent has been given in place of a license or assent in writing as required by the power under which the party acts: Planters Ins. Co. v. Myers, 55 Miss., 47. Thus, where property has been given by will upon condition that the grantee marry with the written consent of the trustee, executor, or other person named, a parol assent has
In the case before us it is clear that Peck & Cahill, the agents of the American Central company, knew of the change in the building in which the business of the assured was carried on, and did not think the change increased the risk. For they not only allowed this risk to stand, but procured additional insurance
The policy in suit was countersigned by. Peck & Cahill as the. agents of the American Central Company, under a power in writing which authorised them to countersign and issue the polices of the company, “and otherwise to do and perform the customary acts and duties of insurance agents.” There is testimony in the record tending to show that it was their duty, as agents, to make the endorsement on the policy of the assent of the company to the additional insurance and change of risk. The insured were expected to ’deal, with them in all matters touching the policy.
The only question left, is whether the charge of the court was substantially correct within the principles thus established. The charge is open to objection as to the order in which it presents the law to the jury. Eor, his Honor, the trial judge, first delivered a written charge, the substance of which was that, notwithstanding the conditions of the policy in reference to
But we are constrained to reverse the judgment upon other parts of the charge. His Honor instructed the jury that the only object of the clause of double insurance was to guard against the over insurance of property, and the consequent temptation to crime. And if the loss in this case far exceeded the amount of
The charge blends together two entirely different questions, the power of the insurance company to waive a condition of the policy or a forfeiture, and the power of the agent. There can be no doubt of the power of the company. The doubt was as to the authority of the agent, and this point should have been clearly presented to the jury separate from the other. The judge said to them: “If the company, on being informed of all the facts touching a violation of the conditions and loss by fire, appointed an adjuster to ascertain the loss, and settle the amount of the same, without objection as to a breach of any of the conditions, you should look to such facts, in connection with the action of the agent, upon the question of a waiver of such assent being endorsed ’on the policy, and give them such weight, with all the facts found, as they may be entitled to.” Undoubtedly, these facts would have supplied any defect of authority on the part of the agent, but there was no evidence introduced to justify their submission to the jury in connection with the question of the agent’s authority. There is no distinct and separate enunciation of the law on the point of the agent’s power in the premises.
Eeverse and remand for a new trial.