68 Neb. 1 | Neb. | 1903
On a former occasion a judgment for the plaintiff in this cause was reversed for the reason that the trial court permitted him to show waiver of conditions in a policy of insurance upon a reply which only denied that there had been any breach.
The principal errors assigned are the admission of parol evidence as to waiver of conditions in the policy notwithstanding a provision that no agent should have power to waive such conditions otherwise than by a written indorsement, and certain instructions whereby the question as to waiver was left to the jury. It is also claimed that the amendments whereby plaintiff was allowed to set up waiver of the conditions in the policy state a new and distinct cause of action, upon which the statute of limi
We are satisfied that the case of Buerstetta v. Tecumseh Nat. Bank, supra, has no.application. In pleading performance of conditions precedent under section 128, Code of Civil Procedure, a plaintiff may safely assume that conditions which have been waived will not be relied upon, and allegations of waiver to meet a defense based on such conditions are not inconsistent with the statutory allegation that all conditions on his part have been duly performed. Levy v. Peabody Ins. Co., 10 W. Va. 560, 27 Am. Rep. 598. Hence it was entirely proper to set up the waiver in reply, and there would have been no departure from the cause of action set up in the petition had this course been taken. Jacobs v. St. Paul Fire & Marine Ins. Co., 86 Ia. 145, 53 N. W. 101; Standard Accident Ins. Co. v. Friedenthal, 1 Colo. App. 5, 27 Pac. 88; American Central Ins. Co. v. McLanathan, 11 Kan. 533; Virginia Fire & Marine Ins. Co. v. Saunders, 86 Va. 969, 11 S. E. 794. It could make no substantial difference if the plaintiff preferred to anticipate the defense and set up waiver in the petition. He did not change his cause of action by substituting allegations of waiver for the general denial.
The question as to admissibility of the evidence objected to has been before the court in various phases in a number of cases, and, if we may rely upon past adjudications, has been completely determined. Slobodisky v. Phenix Ins. Co., 53 Neb. 816; Pythian Life Ass’n v. Preston, 47 Neb. 374; Hartford Fire Ins. Co. v. Landfare, 63 Neb. 559; Hunt v. State Ins. Co., 66 Neb. 121, 125, and cases cited. But in a number of cases which have come before us recently, as well as in the case at bar, the prior decisions of this court on the subject of insurance have been assailed vigorously, and it has been asserted
The general rule, that an insurance company can not take advantage of conditions in a policy whereby such policy is to be void by reason of circumstances existing at the time the policy issued, in case the facts were known to its agent at the time, has been recognized universally. More recently insurance companies have sought to avoid the consequence of this well established rule by provisions to the effect that the conditions of the policy could be waived only by written indorsement, and by clauses in which agents are forbidden to waive any of the conditions of the policy in any other manner. Notwithstanding provisions of this type, an overwhelming maority of the state courts have continued to apply the rule that an insurance company can not. set up that a policy issued by its agent with knowledge of the facts was void when it was issued, by reason of facts which he well knew. Including our own court, the courts of some twenty-seven states, at least, have, upon one ground or another, adhered to this doctrine in the face of these provisions as to waiver. Wood v. American Fire Ins. Co., 149 N. Y. 382, 44 N. E. 80, 52 Am. St. Rep. 733; Berry v. American Central Ins. Co., 132 N. Y. 49; 30 N. E. 254, 28 Am. St. Rep. 548; Blass v. Agricultural Ins. Co., 162 N. Y. 639, 57 N. E. 1104; Breedlove v. Norwich Union Fire Ins. Society, 124 Cal. 164, 56 Pac. 770; Kruger v. Western Fire & Marine Ins. Co., 72 Cal. 91, 13 Pac. 156, 1 Am. St. Rep. 42; Crouse v. Hartford Fire Ins. Co., 79
In some jurisdictions it is held that the conditions restricting the power of the agent to waive provisions of the policy have no reference to conditions in the policy avoiding the contract in its inception. Wood v. American Fire Ins. Co., 149 N. Y. 382, 44 N. E. 80, 52 Am. St. Rep. 733; Continental Ins. Co. v. Ruckman, 127 Ill. 364, 20 N. E. 77, 11 Am. St. Rep. 121; Rickey v. German Guarantee Town Mutual Fire Ins. Co., 79 Mo. App. 485; Crouse v. Hartford Fire Ins. Co., 79 Mich. 249, 44 N. W. 196. Courts taking this view hold that the provision as to waiver only limits the power of the agent to waive conditions of the policy after it attaches, and not the power of the agent to make a contract in the first instance. Other courts hold that a provision against waiver otherwise than in writing may itself be waived, and that this weiver may be oral. Phenix Ins. Co. v. Hart, 149 Ill. 513, 36 N. E. 990; German Ins. Co. v. Gray, 43 Kan. 497, 23 Pac. 637, 8 L. R. A. 70, 19 Am. St. Rep. 150; Orient Ins. Co. v. McKnight, 197 Ill. 190, 64 N. E. 339; German-American Ins. Co. v. Humphrey, 62 Ark. 348, 35 S. W. 428, 54 Am. St. Rep. 297; Western Assicrance Co. v. Williams, 94 Ga. 128, 21 S. E. 370; Pennsylvania Fire Ins. Co. v. Faires, 13 Tex. Civ. App. 111, 35 S. W. 55; Kahn v. Traders’ Ins. Co., 4 Wyo. 419, 34 Pac. 1059, 62 Am. St. Rep. 47. This court took the same position in Hartford Fire Ins. Co. v. Landfare, 63 Neb. 559. Other courts hold that such a provision is invalid on the ground that it is in effect a limitation of the power of the corporation itself to waive provisions in its own contracts, since the corporation can act only through agents. Lamberton v. Connecticut Fire Ins. Co.; 39 Minn. 129, 39 N. W. 76, 1 L. R. A. 222. In
Finally, it has been suggested that failure to strike out the clause violated by facts of which the agent had knowledge, or to indorse the written consent, should be treated as a waiver. Devine v. Home Ins. Co., 32 Wis. 471.
From the very nature of the contract of insurance, it is doubtless essential that there be the utmost good faith on the part of the insured; and insurers are compelled to take great precautions to avoid imposition, and to obtain the proper data with reference to which they may determine the- character of the risk which they assume. For these reasons, it is proper that the court should not merely enforce provisions in policies designed to protect the insurer in such respects, but the courts would be justified in dealing with provisions of that character somewhat liberally if so drawn as to operate no further. But insurers have to deal not only with fraud and imposition on the part of those who insure, but with carelessness and even dishonesty on the part of those whom they procure to act as their agents. Excessive zeal to procure business leads agents •who are paid by commissions to do things in the stress of competition which their employers are not entirely willing to sanction; and the provisions inserted in policies with which courts have had to deal in the past have been designed manifestly quite as much to avoid responsibility on the part of the company for acts of its agents as to prevent
One principle of the law of agency which insurers have steadily sought to avoid is that the knowledge of the agent is the knowledge of the principal. The general doctrine is that notice communicated to or knowledge acquired by the officers or agents of a corporation, when acting in their official capacity or within the scope of their agency, is notice to or knowledge of the corporation. It is said that there are but three exceptions — matters which the agent has forgotten entirely or may have forgotten under the circumstances of the case, matters which for special reasons he could not impart to his principal, and matters which the previous conduct of the agent or the fact that he is engaged in some fraud upon the principal make it certain that he will conceal. 4 Thompson, Corporations, sec.
Although the policy is conditioned to be void in certain cases, it is well settled that this means voidable at the option of the company. The contract is not wholly void, but the insurer may, if it chooses, insist upon forfeiture under certain conditions. Hunt v. State Ins. Co., supra, and cases cited. This construction of the policy has been assailed as in conflict with the language employed and at variance with the authorities. But it is well sustained by judicial decisions elsewhere. Hanover Fire Ins. Co. v. Dole, 20 Ind. App. 333, 50 N. E. 772; Kalmutz v. Northern Mutual Ins. Co., 186 Pa. St. 571, 40 Atl. 816; Schmurr v. State Ins. Co., 30 Ore. 29, 46 Pac. 363; Horton v. Home Ins. Co., 122 N. Car. 498, 29 S. E. 944, 65 Am. St. Rep. 717; Stevenson v. Phœnix Ins. Co., 83 Ky. 7, 4 Am. St. Rep. 120; Kingman v. Lancashire Ins. Co., 54 S. Car. 599, 32 S. E. 762; Bouton v. American Mutual Life Ins. Co., 25 Conn. 542. The use of “void” in the sense of “voidable” is so common that we see nothing in the language of the policy to militate against such a construction, and it is in entire accord with the disinclination of courts toward forfeitures, and their desire to reach a just and equitable interpretation. It follows that if the company does not exercise its option to avoid the policy with knowledge of the circumstances giving it that power, and treats the policy as in force, the forfeiture is waived. This js a waiver by the company, not by the agent, and hence is not within the purview of the condition in question. It is said that such a construction of the provisions of the policy as to waiver deprives them of all force. We do not think this is true. An insured would have no standing in court if his case were that the local agent knew of the circumstances entailing a for
We come next to the instructions with reference to the claim of waiver. In some respects the wording of these instructions is a trifle extravagant. But the error, if any, in these respects, can not be said to be prejudicial, so long as the propositions of law announced are sound, and they are stated so as to leave no room for misunderstanding. We are unable to see how the company may take advantage of the provision as to nonpayment of premium in such cases as this. If the agent reports the policy issued and the premium paid, and the amount of the premium is charged to the agent in his accounts with the company, the latter has no ground of complaint because the agent was
The other assignments of error require but brief notice. The evidence as to the amount of property destroyed is in sharp conflict. The chief of the fire department and several firemen gave testimony tending to show that little or nothing could have been lost. On the other hand, there is no little evidence from creditable witnesses to the contrary. It is contended on behalf of the plaintiff that the goods were so light, and so inflammable in character, that almost nothing remained when the firemen arrived, and that such a hypothesis accords with the evidence showing what was in the building shortly before the fire, with the testimony of a bystander as to what he saw when the fire broke out, and with evidence as to fragments found in the debris the next morning. While it must be confessed that the evidence is not entirely satisfactory, we can not say that the hypothesis suggested is entirely unreasonable, nor that the jury had no right to adopt it. The question was for them, and we have no authority to disturb it in such a case with respect to the alleged misconduct, the trial court found against the defendant upon conflicting affidavits. We see no reason to disturb its ruling. Sang v. Beers, 20 Neb. 365; Everton v. Esgate, 24 Neb. 235. The instruction directing the jury to “do substantial justice” between the parties is not to be commended. But, taken as a whole, we do not consider it prejudicial error. After directing the jury to retire and choose a foreman, the court told them to determine upon a verdict “solely from the evidence in the case,, applying the law as given in these instructions,” and thereby “do substantial justice between the parties.” Of course, it is for the law to determine what is
We recommend that the judgment be affirmed.
By the Court: For the reasons stated in the foregoing opinion, the judgment of the district court is
Affirmed.
This case is reported in 1 Neb. (Unof.) 704, Opinion by Day, C.
This case appears in the Northwestern Reporter and Lawyers’ Reports Annotated as Woodmen’s Accident Ass’n v. Byers.
