59 Minn. 182 | Minn. | 1894
Lead Opinion
May 9, 1893, the defendant, by a Minnesota standard policy, insured a building of plaintiff against loss or damage by fire for one year, and June 18th the building was destroyed
The policy of defendant (the standard policy) contains this condition: “This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void if the insured now has, or shall hereafter make or procure, other contract of insurance, whether valid or not, on property covered in whole or in part by this policy,” — and this further condition: “And no officer, agent, or representative of this company shall have power to waive any provision or condition of this policy except such as, by the terms of this policy, may be the subject of agreement indorsed hereon or added hereto; and, as to such provisions and conditions, no officer, a.gent, or representative shall have such power or be deemed or held to have waived such provision or condition unless such waiver, if any, shall be written upon or attached hereto.” There was no indorsement on the policy referring in any way to the other and previous insurance.
The only question in the case is, could an agent of the defendant, notwithstanding the last above quoted condition, waive by parol, and without indorsing on the policy, the condition as to other insurance?
In Lamberton v. Connecticut Fire Ins. Co., 39 Minn. 129, (39 N. W. 76,) the court passed upon a condition similar to the condition last above quoted, and held it to be not an attempt to limit or restrict the power of any particular agent or class of agents, but to disable one of the parties to make, even with the consent of the other, an agreement that would otherwise be valid; and the court said: “A contracting- party cannot so tie his own hands, so restrict his own legal capacity for future action, that he has not the power, even with the assent of the other party, to bind or obligate himself by his further action or agreement contrary to the terms of the written contract.” The court decided, in effect, that such a condition was nugatory; that the parties could not bind themselves by any such condition.
The defendant claims that Láws 1889, ch. 217, providing for a uniform policy of fire insurance, to be known as the “Minnesota Standard Policy,” changed the rule of law in that particular; and
No other question on that act is suggested by either party, either as to its validity or construction in any particular, except as above stated; and we ivill pass on nothing but the point thus made as applying to the condition last above quoted.
The standard policy was, under the act, prepared by the Insurance Commissioner, with the assistance of the Attorney General. Its use by insurance companies doing business in this state is made compulsory. The courts must, when called on, interpret it and its various provisions and conditions, and generally by the same rules as though the form of policy were voluntarily adopted by the parties. But in respect to the power of the parties to insert the provisions and conditions that are contained in the standard policy, and the binding effect of them, the act is conclusive; for it would be absurd to say that, while the statute compels the use of a particular condition, the parties cannot or shall not bind themselves by it, but it may be nugatory. By requiring the condition to be inserted, the statute certainly enables the parties to make the condition. It follows that the conditions quoted are valid and binding. In respect to the power of the parties to bind themselves by such conditions, the act changes the rule in the Lamberton Case.
Order reversed.
Dissenting Opinion
(dissenting). I cannot agree to the foregoing opinion, for reasons that I will state. The questions involved in this decision are of very great importance to the people of this state, as well as to the insurance companies. By Laws 1889, ch. 217, the legislature, under the guise of reform, enacted a most extraordinary law. It provides that the Insurance Commissioner, within sixty days after the passage of that act, shall prepare and file in his office “a printed form in blank of a contract or policy of fire insurance, together With such provisions, agreements or conditions as may be endorsed thereon or added thereto and form a part of such contract or policy, and such form when so filed shall be known and designated as the Minnesota standard policy.” It further provides that he shall call upon the Attorney General for such assistance as to him may seem
It further provides that printed or written forms of description, "or any other matter necessary to clearly express all the facts and conditions of insurance on any particular risk (which facts or conditions shall in no case be inconsistent with, or a waiver of any of the provisions or conditions of the standard policy herein provided for), may be written upon or attached or appended to any policy issued on property in this state.”
If these provisions mean anything, they mean that every condition in such standard form which will allow the insurance company to escape liability must be inserted in every insurance policy issued, and, when so inserted, it cannot be waived by any power on earth, but absolutely protects insurance companies in taking advantage of every technical violation for the purpose of evading payment of losses, and under no circumstances can the company waive or forgive any such technical violation.
Within sixty days after the passage of this act the insurance commissioner did prepare and file the Minnesota standard policy, which contains at least thirty five conditions, the violation of any one of which will forfeit the policy.
Any one familiar with insurance law can readily understand that one such forfeiture clause, protected from the doctrine of waiver as heretofore applied by the courts, will render void more policies than a dozen such clauses to which such doctrine of waiver is applied; and, if this statute and standard policy is the law of this state, then not one insurance loss in ten which the insurer sees fit to refuse to pay can be collected.
By the law of waiver, the party to a contract who would enforce an act of forfeiture committed by the other party must do no act recognizing the contract as still in force after he learns of the forfeiture. If he does, he waives the forfeiture. This rule applies as well to forfeiture clauses in leases, deeds, and other contracts as it does to those in insurance policies.
If this statute is constitutional, the decision of the majority is right. But it seems to me that the constitutionality of this statute
It is true that the question of the constitutionality of this legislation has not been raised by either party to this appeal; but it seems to me that, on account of the great public importance of the question, this court should not dispose of the case in a way that, to a considerable extent, implies that it considers the legislation constitutional, but should, when the question is suggested, raise it of its own motion, and order a further argument of the case as to this question. If such a course is unprecedented, it seems to me that it is time such a precedent was established. For this reason, I cannot agree with the opinion of the majority.
Because of its importance, I am of the opinion that it would be advisable to order a reargument of this case upon the question suggested by Mr. Justice Canty, although I do not wish to be understood as concurring in all that he has said. On the case as presented, I assent to the majority opinion.
(Opinion published 60 N. *W. 1095.)
On December 4,1894, a reargument of this case was ordered. On such reargument the following opinion was filed, May 15,1895:
This ease was argued and decided in favor of appellant at the last term of this court. It having been then suggested that Laws 1889, ch. 217, which provides for the preparation and adoption of the “Minnesota standard policy,” was unconstitutional, for the reason that it attempted to delegate legislative powers to the Insurance Commissioner, a motion for reargument was made, on the ground of such unconstitutionality, the motion was granted, and the case has since been reargued.
"Section 1. The Insurance Commissioner shall prepare and file in his office on or before the first (1st) day of August, A. D. eighteen hundred and eighty-nine (1889), a printed form in blank of a contract or policy of fire 'insurance, together with such provisions, agreements or conditions as may be endorsed thereon, or added thereto, and form a part of such contract or policy, and such form when so filed shall be known and designated as the Minnesota Standard Policy. Said Insurance Commissioner shall within sixty (60) days from the passage of this act prepare, approve and adopt a printed form in blank of a contract or policy of fire insurance, together with such provisions, agreements and conditions as anay be endorsed thereon or added thereto and form a part of such contract or policy, and such form shall, as near as the same can be made applicable, conform to the type and form of the New York Standard Fire Insurance Policy, so called and known. Provided, however, that five (5) days’ notice of cancellation by the company shall be' given, and provided, that proof of loss shall be made within sixty (60) days after a fire.
"Sec. 2. The Insurance Commissioner may call upon the Attorney General for such assistance as to him may seem necessary in the preparation of the aforesaid standard insurance policy, and it is hereby made the duty of said Attorney General to perform such service.”
*193 “Sec. 4. On and after the first (1st) day of January A. D. eighteen hundred and ninety (1890), no fire insurance company, corporation or association, their officers or agents, shall make, issue, use or deliver for use any fire insurance policy.or renewal of any fire policy on property in this state, other than such as shall conform in all particulars as to blanks, size of type, context, provisions, agreements and conditions with the printed form of contract or policy so filed in the office of the insurance commissioner, as provided for in the first (1st) section of this act, and no other or different provision, agreement, condition or clause shall in any manner be made a part of said contract or policy, or be endorsed thereon or delivered therewith, except as follows, to-wit: * * *”
Then follow provisions which authorize the insertion in the insurance policy of matters of description, and other particulars and provisions peculiar to the particular insurance company or the particular risk, and not inconsistent with the provisions or conditions of the standard policy. It is contended, in substance, that all of this statute above quoted which provides for the preparation and adoption of a standard form is surplusage, except the part of Laws 1.889, ch. 217, § 1, which provides that “such form shall, as near as the same can be made applicable, conform to the type and form of New York Standard Fire Insurance Policy so called and known.”
If this contention is correct, why were the provisions inserted, which immediately follow this, and require five days’ notice of cancellation by the company, and provide for sixty days in which to make proof of loss? It is conceded by counsel for appellant that these identical provisions were in the New York standard form when this act was passed. If the legislature intended to require all of the provisions of that form to be adopted, why did they thus specify only those two ?
Again, if the Insurance Commissioner had no discretion, and was to act merely as a copyist of the New York form, why was it deemed necessary to provide for him the assistance of the Attorney General, in his onerous duties of copying the same? Again, why should the words “provisions, agreements, and [or] conditions” occur so often in the statute where they are of no particular importance, and, be left out in the very connection and very place where they would be all-important? Again, the statute provides that “such
It is insisted that this authorizes only such changes as striking out the words “New York,” and inserting “Minnesota,” and that for the purpose of permitting such changes the words, “as near as the same can be made applicable,” were used. There are no such changes to be made. The words “New York” do not occur in the provisions of the New York standard. There is not a word in the provisions of the New York form which it is necessary to change in order to apply the form to Minnesota. Then the legislature must, at least, have intended to give the Insurance Commissioner power to exercise his judgment in determining which of the provisions of the New York form were applicable to Minnesota, and which were not, and this would be an unconstitutional delegation of power. Conceding, without deciding, that this would be a proper way to make the New York form a part of the Minnesota statute, if the legislature intended to adopt the New York form, they could have said so in a very few words.
The words “type and form,” above quoted, are written together in the same connection, and it is fair to presume that they both refer to matters of the same general kind; that is, to matters of form. Construing these words in connection with the other provisions of the statute, we are of the opinion that they are equivalent to “type and style,” that the legislature intended to give the Insurance Commissioner power to insert in the standard form such provisions as he saw ñt, and that, while it might be materially different from the New York form in substance, it should conform to it, as far as practicable, in the size and character of the type, and in the arrangement of provisions. The object of this was obviously to prevent the use of type so small and obscure, and the arrangement of provisions so misleading, that an ordinary man would not read these provisions, and, if he did, could not understand them.
Then the legislature attempted to clothe the Insurance Commissioner with power to enact a general law, prescribing what provisions and conditions should be inserted in a policy of insurance, and what should-not. There was no reason why the legislature could not pass this act as well as the commissioner. There may be
As said in State v. Young, 29 Minn. 551, (9 N. W. 737:) “It is a principle not questioned, that, except where authorized by the constitution, as in respect to municipalities, the legislature cannot delegate legislative power; cannot confer on any body or person the power to determine what shall be law. The legislature only must determine this.” We are of the opinion that Laws 1889, ch. 217, is unconstitutional and void, and therefore the provision of said statute prohibiting the parties from waiving any of the provisions of the standard policy has no effect, and does not prevent a parol waiver of the condition in the policy declaring such policy "void if the insured now has, or shall hereafter make or procure, any other contract of insurance.” This being so, the contract of insurance is merely the voluntary contract of the parties, not restricted by any such statute; and by delivering the policy here in question, knowing of the existence of other insurance on the property, the defendant waived this condition of its policy, and plaintiff is entitled to recover. Brandup v. St. Paul F. & M. Ins. Co., 27 Minn. 393, (7 N. W. 735;) First Nat. Bank v. American Cent. Ins. Co., 58 Minn. 492, (60 N. W. 345;) Lamberton v. Connecticut Fire Ins. Co., 39 Minn. 129, (39 N. W. 76.)
This disposes of all the questions in the case, and the order appealed from is affirmed.
(Opinion published 64 N. W. 241.)