Cobel v. Hartford Fire Insurance

154 Minn. 233 | Minn. | 1923

Holt, J.

The defendant Hackney, of St. Paul, Minnesota, on February 10, 1919, by a written contract sold a 3,360 acre farm in South Dakota to plaintiffs, residents of that state, who agreed to make certain payments at stated times. The contract contained these provisions affecting the present controversy:

“Insurance covering the buildings on the above described premises shall be adjusted as of the date hereof. The said party of the second part shall be entitled to assignments of the policies, upon paying to said party of the first part the unearned premiums thereon, after the date hereof.”

There were buildings upon the premises covered by an insurance policy issued by the defendant, The Hartford Fire Insurance Company of Hartford, Connecticut. The policy contained a mortgage clause in favor of the defendant, the Minnesota Loan & Trust Company, mortgagee. It was in possession of the mortgagee at its place of business in Minneapolis, Minnesota.

On April 1, 1919, at about which time the deed was delivered, Mr. Hackney mailed a statement of the amount due him, totaling $73,74G and including therein the amounts of the unearned premiums upon the insurance policies referred to in the contract of sale, the amount of the policy here in question being $284.27. The total amount was promptly remitted, but through oversight or misunderstanding no assignment of the policy was made by Mr. Hackney. On September 14, 1920, a fire destroyed the buildings and property covered by the policy, and the loss sustained by plaintiffs was the amount for which a recovery was had herein. According to the terms of the policy no agent had authority to waive any of its terms or conditions unless by writing attached thereto. It also contained this provision: “This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto shall be void, if * * * any change other than by death of an insured takes place in the interest, title or possession of the subject of insurance * * * or if this policy be assigned before a loss.” The mortgage of $85,000 held by the Minnesota Loan & Trust Company was paid by plaintiffs subsequent to the fire.

This action was brought against both Mr. Hackney and the insurance company, the complaint being framed on the theory that the insurance company had waived a formal assignment, and this was alleged upon information and belief derived through the statements and claims of defendant Hackney, and also on the theory that the latter’s breach of contract to assign the policy deprived plaintiffs of the insurance they had paid him for. The defendant Hackney answered alleging the facts as to the insurance, the sale of the property to plaintiffs, the loss, waiver of proof of loss as in plaintiffs’ complaint, and then alleged that W. H. Maul, a duly authorized agent of the insurance company, had agreed to have the company assent to an assignment of tbe policy to plaintiffs as of February 10, 1919, and asked for a reformation of tbe policy accordingly. It is stated in tbe briefs that tbe insurance company demurred to tbe complaint, and that tbe demurrer was sustained. The trial was only as to tbe liability of Mr. Hackney. Each side made a motion for a directed verdict. Plaintiffs’ motion was granted and defendant Hackney’s denied. Tbe latter appeals from tbe judgment.

There is some claim that Mr. Spratt, one of plaintiffs, procured an interest in tbe property subsequent to tbe date of the contract and prior to tbe loss and that thereby tbe policy became invalidated, and hence tbe failure of Mr. Hackney to assign tbe same is not tbe proximate cause of loss. No such defense was made in tbe answer. Tbe title of plaintiffs is therein alleged precisely as in tbe complaint. Tbe inference is that tbe deed from Mr. Hackney went to the present plaintiffs and one Mr. Housman, but that tbe latter conveyed and assigned bis interest in tbe farm and this claim after tbe fire. At any rate, neither by bis pleading nor under tbe evidence is appellant in a position to urge a reversal upon tbe ground that tbe plaintiff Spratt at some time prior to tbe fire became a part owner.

Appellant’s counsel says: “It is admitted that in tbe agreement executed by appellant covering tbe sale of said land, be agreed to assign tbe policy to tbe respondents. If nothing bad been said in regard to tbe assignment of tbe policy or as to who was to look after tbe assignment thereof subsequent to tbe execution of tbe agreement, appellant would have no defense.” What counsel refers to as something being said to alter the situation is this: W. H. Maul was tbe local agent at Huron, South Dakota, for tbe insurance company. He bad no authority to consent to assignments of policies. He was the agent of appellant in making tbe sale of tbe property involved to plaintiffs and was present when tbe negotiations culminated in tbe contract of sale. During its preparation, and, perhaps, at or about tbe time of its signing, there was talk of tbe assignment of tbe policies covering tbe buildings and property. Mr. Hackney testified that be asked Mr. Maul if be would attend to it, and being answered in tbe affirmative be inquired of plaintiffs if that was satisfactory, and be states they assented. Tbe record discloses several reasons why this conversation, denied by plaintiffs, is not sufficient to avoid the express agreement to assign. Appellant never notified Mr. Maul of the payment of the unearned premium. The assignment was to be effected when payment was received. The talk was prior to or at the time of the execution of the written agreement and should not. be held to vary the writing. Moreover, Mr. Hackney admitted that after the fire he told a representative of the insurance company that he had overlooked assigning the policy, and wrote one of plaintiffs that he had told this representative “when here a couple of weeks ago that the property had been sold to you, but that we had overlooked assigning the policy, which was a mistake on the part of my bookkeeper.” There is not sufficient evidence to release appellant from his obligation contained in the written contract to assign this policy. There is no suggestion of waiver of an assignment by plaintiffs in the answer of defendant; on the contrary, he alleged that it was assigned to plaintiffs and that the insurance company through its agent Maul consented thereto and agreed that such written consent should be indorsed on the policy.

The next contention is that Mr. Maul knew of the transaction and that his principal, the insurance company, is bound by his knowledge and acquiesced in the change of ownership so that the policy protected plaintiffs. The cases of Vessey v. Commercial U. Assur. Co. 18 S. D. 632, 101 N. W. 1074, and Wheaton v. Liverpool & L. G. Ins. Co. 20 S. D. 62, 104 N. W. 850, are relied ion. They are not in point. Those eases related to the knowledge of the title or condition of the property possessed by agents of the insurers when soliciting and accepting application for insurance, they having authority so to do. Our decisions are to the same effect. Andrus v. Maryland Casualty Co. 91 Minn. 358, 98 N. W. 200; Bemis v. Pacific Coast Casualty Co. 125 Minn. 54, 145 N. W. 622. But the knowledge of the agent in this instance came to him after the insurance contract was in effect. Such being the case, authority to consent to a change or to waive any term in the existing contract must be shown. There was no evidence of authority in Mr. Maul to consent to an assignment of the policy or to waive the condition that it should become void if assigned without the company’s consent, or if a change in the title occurred. This is not like Lamberton v. Connecticut Fire Ins. Co. 39 Minn. 129, 39 N. W. 76, 1 L. R. A. 222, where “confessedly, the agent whose conduct is in question, had authority to give such consent by indorsing the same upon the policy.” In that case a vacancy permit. We think the direction for a verdict for plaintiff was right. The judgment is affirmed.