Home Fire Insurance v. Gurney

56 Neb. 306 | Neb. | 1898

Irvine, 0.

This was an action to recover on a policy of fire insurance, coupled with a proceeding to reform the policy. The policy, as issued, contained a promise on the part of the insured that he would take an inventory of the stock 'of goods insured at least once a year; that he would keep books of account showing all purchases and sales, and would keep the inventories and books locked in an iron or fire-proof safe or vault at night and at all times when the building described as containing tlie insured goods was not open for business, or in some secure place not exposed by fire ivliich would destroy the building. The stock of goods insured was destroyed by fire. The plaintiff had taken and kept an inventory and books as required by the provision referred to, but he did not preserve them in a safe or other secure place. On the contrary, he kept them in his store, with the goods, and they were destroyed. The reformation asked was the elimination of the provision referred to from the contract of insurance. In the district court there was a trial of the issues without a jury, followed by special findings and a judgment for the plaintiff in accordance with the averments and prayer of the petition. The whole controversy here relates to the correctness of this action in reference to the prayer for reformation as regards the special clause mentioned, and by the parties styled the “iron-safe clause.”

Plaintiff had formerly a safe in his office and had a policy in the defendant company containing the “iron-safe clause.” The safe had, however, been removed before the present policy was negotiated. Plaintiff testified that an agent of defendant, one Gue, called on him with reference to a renewal of his policy. Gue is shown to have been merely a soliciting agent with power simply to receive and transmit applications, and, it seems, also, to receive payments of premiums. When the application was made out plaintiff told Gue that he no longer had a safe and that he had no place to keep his books. Gue said that would be all right and made out the application accordingly. Plaintiff did not promise as stated in the ■policy. Plaintiff’s wife heard the conversation and testified that she heard plaintiff state that he had no safe and Gue replied that it made no difference in case the company accepted the application; that plaintiff then told Gue he kept his books in the building, and Gue said that made no difference, it was all right to keep them there. Gue denied that there was any talk as to the place of keeping the books. In the application in evidence there are questions as to whether such books were kept, and the question “Are they kept in fire-proof safe?” The answer is “No.” The application was made and the premium paid November 3fi, 1894, and the insurance then began. The policy was not delivered until about December 1, and the fire occurred December 12. On this evidence the court based its findings. While it is conflicting, and on the part of the plaintiff perhaps not very satisfactory, we think it is sufficient to sustain the finding. If the application stood alone it would not negative the clause in the policy, because, while it indicated that the books would not be kept in a safe or vault, they might still be kept in some place where they would not be en-. dangered by a fire which might destroy the insured property. But the evidence tends to show that plaintiff not only told Gue that .he had no safe,' but that he told him he had no place to keep the books, meaning, of course, no place other than his store, and that Gue said that would make no difference. The policy was only received a few days before the fire, so that there is no estoppel from claiming a reformation because of an unreasonable retention of the policy before demanding it. Plaintiff testified that he had only read the written part and a portion of the printed, and that before the fire he had not observed the “iron-safe clause.” The company received and retained the premium, and does not even now yield to the theory that there was no consensus and seek a rescission.

It is argued that Gue, being only a soliciting agent, could not bind the company by any agreement prior to the policy or in conflict with its terms. It has often been held that the insurer is bound by the knowledge of its agent, so as to constitute a waiver of the strict terms of policies afterwards issued. In regard fo soliciting agents the following language from State Ins. Co. v. Jordan, 29 Neb. 514, is peculiarly applicable: “The agents of an insurance company authorized to procure applications for insurance and to forward them to the company for acceptance are the agents of the insurer’s, and not of the insured, in all they do in preparing the applications or as to any representations they may make to the insured as to the character and effect of the statements so made. * * * Public policy and good faith require that the persons clothed by the insurance companies with power to examine proposed risks and fill out, receive, and approve applications for insurance shall bind their principals by their acts and knowledge acquired by them.” In a somewhat similar case, Home Fire Ins. Co. v. Fallon, 45 Neb. 554, a similar conclusion was reached. The application, so far as any information was demanded, stated the facts. The proof tends to show that the plaintiff made further statements to the agent, indicating at least an intention not to comply with any such condition, and that the agent informed him that such facts would be immaterial if the policy should be issued. Giving full effect to the limitations of this particular agent’s authority, what thus occurred was within the apparent scope thereof. In making the application the plaintiff had a right to rely on the agent’s statement as to the meaning and effect thereof and of the consequence 'of facts truthfully imparted. The plaintiff paid and the company received the premium, both on the faith of the agent’s acts. The company is bound thereby.

Affirmed.

Sullivan, J., not sitting.’