60 F. 351 | 8th Cir. | 1894
Lead Opinion
At tbe close of the plaintiff’s evidence tbe circuit court directed tbe jury to return a verdict for tbe defendant. This writ of error is sued out to reverse the judgment upon this verdict. There was but one question of fact in tbe case, and that was whether or not a policy of insurance, which, confessedly, prior to that date, did not cover the boiler which exploded, was so modified February 24, 1892, by a verbal agreement, that it did cover it on March 21,1892, when it exploded.
The Laclede Fire-Brick Manufacturing Company, the plaintiff in error, was a corporation engaged in manufacturing fire brick at Cheltenham, in St. Louis. In May, 1891, it had seven steam boilers, and no more, on its premises. It made a written application to the Hartford Steam-Boiler Inspection & Insurance Company, the defendant in error, "a corporation engaged in the business of insurance, to insure these seven boilers against explosion; and on May 8, 1891, the defendant issued to the plaintiff-its policy upon the seven specified boilers, insuring each of them, in the sum of $30,000, for three years, against explosion, provided the pressure of steam did not exceed 100 pounds per square inch on six of the boilers nor '85 pounds per square inch on the seventh, whén the explosion should occur. The defendant was a Connecticut corporation. The policy provided that it- should not bind the defendant unless it was countersigned by C. C. Gardner, its general agent, and it was so countersigned. The plaintiff alleged in its petition that on February 24, 1892, this policy was modified by the agreement of the defendant so that, without the payment of any additional premium, it thereafter covered nine boilers of the plaintiff, whenever only seven were exposed to the pressure of steam, and that on that day the defendant caused the two additional boilers to be inspected, and reported them sound. The defendant, by its answer, denied the agreement
In the conduct of its business, the defendant caused the boilers it insured to be inspected and tested, before taking risks upon them, and every few months during the continuance of the risks. The men it employed to make these tests were called “inspectors.” On February 24, 1892, Mr. Eickhoff, one of the defendant’s inspectors, tested the boiler which exploded, at the request of the plaintiff, and told the plaintiff’s engineer that it was sound; but it was not then inclosed, nor were the attachments to it made, and it was not subjected to steam pressure until March 19, 1892. There was no testimony that the general agent or any officer of the defendant made, or was informed of, any modification of the policy; but the agreement concerning it was claimed to have been made with the inspector Eickhoff, and is based on the following testimony: Mr. Green, the president of the plaintiff, testified: That Mr. Eickhoff was one of the defendant’s inspectors. That he first met him at some time while the plaint iff was insured by the defendant in the sum of $10,000 by a former policy. That, at some time subsequent to this first meeting, Mr. Eickhoff told him that he could not afford to inspect the plaintiff’s boilers every few -months for the money he was getting for it, and suggested that the plaintiff raise its insurance to $30,000, and he replied: “All right. Go ahead, and make it thirty thousand dollars.” That at that time he told Mr. Eickhoff that he might put in additional boilers, and that, if so, they would be auxiliaries or duplicates; that the risk would be no greater; that six boilers would he running for two weeks, and seven for the next two weeks, and the rest would he idle, — and Mr. Eickhoff said, “All right,” the insurance by the policy would certainly cover this risk, as it was less every two weeks, and no greater at any one time. That he supposes they talked this a dozen times, lie testifies that, after ihis talk, Mr. Eickhoff either brought to him, or left on his desk, the written application for the policy on the seven specified boilers then on his premises; that this application was not filled out by any one connected with the plaintiff; that he signed the application for the plaintiff, as president, and delivered it to Mr. Eickhoff, who took it away, and brought back, and delivered to him, the policy of May 8,1891; that he never had any conversation with any agent or officer of the defendant, except Mr. Eickhoff, regarding his insurance, until after the explosion. He testifies that he was the president of the Helmbacher Steam-Forge Company, which operated a rolling mill, and was not insured by the defendant; that shortly after the policy was issued he bought the two additional boilers, one of which subsequently exploded, for that company; that he did not then intend to have them insured, but intended to use them at the rolling mill; that before buying them he asked Mr. Eickhoff, as his friend, to inspect them for him, so that he might
Judges of the federal courts are not required to submit a case to a jury merely because there is some evidence in support of the case of the party who has the burden of proof, but it is their duty to instruct the jury to return a verdict against the party in any case in which they would be compelled to set aside a verdict in his favor, if rendered. Commissioners v. Clark, 94 U. S. 278, 284, and cases cited; Gowen v. Harley, 6 C. C. A. 190, 56 Fed. 973, 980, and cases cited. Was this evidence of such a character that it would warrant a jury
Turning now to the conversation of February 24, 1892, between these two men, and bearing in mind their previous conversations, the condition of their minds, and the circumstances surrounding them, let us see what the evidence is that they agreed that the policy should be thus modified. They started, in their negotiation for the original policy, and still continued, in the erroneous belief that it made no difference in the risk whether seven boilers, in use all the time during the term of the policy, or nine boilers, each of which was in use seven-ninths of the time, were insured under the policy; hence, they both supposed that the modification pleaded by the plaintiff was immaterial to the defendant. Not only this, but before the policy was issued, at least a dozen times, Eickhoff had declared to Green that the policy on the seven boilers would cover all the additional boilers he might acquire after the date of the policy, if but seven were used at a time. After the policy was issued, Green says, Eickhoff continued to talk with him about it; that he talked about it a dozen times; that he may have said three or four times before the conversation of February 24th that the insurance would cover the two additional boilers; and that the talk of February 24th was at the continuance of these conversations. Is it not plain, from this testimony, that both these men were of the opinion that the policy, as it was, covered the two additional boilers, without any modification ? It seems so to us, and the subsequent conversations and acts of these men confirm this view. February 24, 1892, Green sent, not for Eickhoff, particularly, but for some inspector, not to insure his boilers, but to inspect them so that they would pass the city inspection. Eickhoff happened to be the inspector who responded to the call. Green immediately requested him, not to insure these boilers, but to inspect them, and
It is true that a written contract may be modified by a subsequent oral agreement, and that a contract of insurance may be made by parol. But it is nevertheless true that the contract here in question was one of considerable magnitude, — one involving f30,000; that the customary method of modifying policies of insurance and of making
“A contract varying a policy is as much an instrument as the policy itself, and therefore can only be executed in the manner prescribed by law. The force of the policy might, indeed, have been terminated by actually canceling it; but a contract to cancel it is as solemn an act as a contract to make it, and, to become the act of the company, must be executed according to the forms in which, by law, they are enabled to act.”
In Farley v. Hill, 11 Sup. Ct. 186, the supreme court declared the positive testimony of two witnesses to the existence of an oral agreement that but one witness denied, insufficient evidence to prove it, in view of the inherent improbability that such a contract would exist without some written evidence of it.
In. our opinion, the plaintiff’s evidence in this case was not only insufficient to establish the important agreement of modification of the policy or of insurance of the additional boilers he alleges, but, in the absence of the admission of the application in the answer, it fails to show that, after the issuance of the original policy; either Gfreen or Eickhoff ever contemplated, or suggested to each other, the making of any such agreement. This conclusion disposes of this case, for it is conceded, and is' too well settled to warrant more than the statement of the proposition, that the opinion Eickhoff expressed, or, if it could be so called, the “promise” he made, before the policy issued, that it would cover all after-acquired boilers, while but seven were in use, was merged in the written contract evidenced by the policy, and was not available to the plaintiff in this action either as a representation, an agreement, or an estoppel. Insurance Co. v. Mowry, 96 U. S. 544, 547, 549; Hudson Canal Co. v. Pennsylvania Coal Co., 8 Wall. 276, 290; Insurance Co. v. Lyman, 15 Wall. 664; Thompson v. Insurance Co., 104 U. S. 252; Pearson v. Carson, 69 Mo. 550; Tracy v. Iron-Works Co., 104 Mo. 193, 16 S. W. 203; Insurance Co. v. Neiberger, 74 Mo. 167; Lewis v. Insurance Co., 89 Conn. 100.
There is another reason why the judgment below should be affirmed, and that is that there is no sufficient evidence in this record that the inspector had authority from the defendant to modify the policy, or to make a supplemental contract of insurance in its behalf, to warrant a verdict against it. To maintain the negative of this- proposition, the authorities in support of the following propositions are cited: Where an insurance company defends against a loss on the ground that the policy is forfeited by a false representa
“There is nothing in the record which shows that the agent was invested with authority to make an insurance for the company. In representing himself as an agent, he only solicited an application by the assured to the company for a policy.' That instrument was to be drawn and issued by the company, and it shows on its face that the authority to the agent was limited to countersigning it before delivery, and to receiving the premiums.”
In Morse v. Insurance Co., supra, an action was brought on an oral contract made by a soliciting agent at the time he obtained á written application, to the effect that the insurance should commence immediately, and a policy should be subsequently issued. The evidence was that the year before the agent had obtained a like application from the plaintiff, and made a like agreement, and
How much stronger the evidence of the apparent authority of these agents to make insurance contracts was, than is the evidence in this case of the authority of this inspector, appears from what has already been said. Moreover, there is no evidence in this case that Eickhoif was the clerk or general representative of the general agent, in conducting his insurance business. The utmost stretch of his apparent authority reaches no further than to make him the occasional agent of the general agent to solicit an application, deliver it to him, and carry back the policy. The functions of such an agent cease with the delivery of the policy. From an apparent authority so limited, no authority to subtract from, add to, or modify the written contract of the insurance company can he inferred. Healey v. Insurance Co., 5 Nev. 268, 273; Putnam Tool Co. v. Fitchburg Mut. Fire Ins. Co., 145 Mass. 265, 269, 13 N. E. 902; Kyte v. Assurance Co., 144 Mass. 43, 46, 10 N. E. 518; Lohnes v. Insurance Co., supra; Tate v. Insurance Co., 13 Gray, 79, 82; Wilson v. Insurance Co., 14 N. Y. 418; Hoffman v. Insurance Co., 32 N. Y. 409; Walton v. Insurance Co., 116 N. Y. 317, 322, 324, 22 N. E. 443; Mitchell v. Insurance Co., 51 Pa. St. 402, 411. The judgment below is affirmed, with costs.
Dissenting Opinion
(dissenting). There was abundant evidence to go to the jury, and from which they might rightfully have found, that Eickhoif was an agent of the defendant, and clothed with authority to modify or extend the original contract of insurance, and that such a contract was in fact made. His agency is not denied in the answer, but, by necessary implication, admitted. In its answer the defendant says:
“And defendant states the truth and the fact to be that at some time in the month of February, 1892, the plaintiff did apply to the defendant for insurance upon two additional boilers to the seven boilers mentioned in said policy of insurance, and did request the defendant to add said two boilers to said seven boilers, and did request defendant to agree that said policy of insurance issued to It in the month of Mareh, 1891, should cover said two additional, as well as said original seven, boilers. ⅜ * ⅞”
The testimony shows that all the dealings in reference to this insurance business — those relating to the policy that was issued in 1891, as well as those relating to the supplementary or ancillary
“Q. Who did you have your dealings with about this matter of this application? A. Mr. Eickhoff. Q. Did you see anybody but Mr. Eickhoff about it? A. No, sir. Q. Did you ever have any [negotiations] with Mr. Gardner at all? A. None at all. Q. Did you ever see any other representative of this company, either in taking out this policy or putting in this auxiliary battery of boilers, except Eickhoff? A. No, sir. Q. How did you come to ask Eickhoff to come and inspect these boilers for you? A. Well, he was doing my insurance.”
There is not a word of testimony to the contrary of this in the record, but much more to the same effect. Reading the paragraph of the answer I have, quoted in the light of this evidence, it is perfectly clear that the application which the answer admits was made “to the defendant” to insure the two boilers was the application made to its agent Eickhoff, for Mr. Green testifies positively that no such application was ever made to any one else. But what ought to be conclusive on the question of Eicklioff’s agency and authority to make the contract, as well as the fact that he did make it, is the circumstance that, when the plaintiff’s evidence tended .strongly to establish both these facts, the defendant declined to put either Eickhoff or Gardner on the stand to deny them. Whether Mr. Eickhoff was an agent of the company to effect insurance, and whether he did insure these two boilers, were facts peculiarly within the knowledge of himself and Mr. Gardner. It is a well-settled rule of evidence that when the proof tends to fix a liability upon a party who has it in his power to offer evidence of all the facts as they existed, and rebut the inferences which the proof tends to establish, and he declines to offer such proof, the jury are at liberty to presume that the proof, if produced, instead of rebutting, would support, the inferences against him. Railway Co. v. Ellis, 4 C. C. A. 454, 54 Fed. 481. In Starkie on Evidence (volume 1, p. 54), it is said:
“The conduct of the party in omitting to produce that evidence- in elucidation of the subject-matter in dispute which is within his power, 'and which rests peculiarly within his own knowledge, frequently affords occasion- for presumptions against him, since it raises strong suspicion that such evidence, if adduced, would operate to his prejudice.”
This rule is applicable to criminal cases (Com. v. Webster, 5 Cush. 295, 316; People v. McWhorter, 4 Barb. 438), and it is difficult to perceive why it should not be applied to an insurance company.
The bill of exceptions shows that the precise ground upon which the case was taken from the jury by the circuit court was "that there was no evidence to show that Mr. Eickhoff, the defendant’s inspector, had any authority from the defendant to change or modify the policy of insurance sued on.” The case comes here upon an exception to that particular ruling, and that is the only question discussed by counsel for plaintiff in error. It is now well settled that, when a given state of facts is such that reasonable men may fairly differ upon the question, the determination of the matter is for the jury. It is only where it appears that all reasonable men would agree that the evidence was insufficient to warrant a verdict that the court is justified in withdrawing a case from the jury. Rail
The remaining question is, did the agent Eickhoff make the ancillary contract to insure the two boilers? It is well settled that, unless prohibited by. statute or other positive regulation, a valid contract of insurance can be made by parol (Insurance Co. v. Shaw, 94 U. S. 574), and that an ancillary agreement, such as was made in this case, is binding, without any written memorial of it, and that such an agreement is not within the statute of frauds (Insurance Co. v. Colt, 20 Wall. 560). Whether the majority of the court mean to be understood as asserting that no such contract was made, or that, though made, it was void by reason of a mutual mistake of the parties, is not very clear, from the opinion. The supposed mistake, as stated by a majority of the court, consisted in Mr. Green and Mr. Eickhoff agreeing “that, if nine boilers were so used that only seven were exposed to the steam pressure for two weeks, and then the two idle ones and four of those in use before were exposed to the same pressure for two weeks, and so on alternately, the risk of explosion would be no greater from the nine thus used than it would be from seven boilers constantly in use.” As I understand the proposition of the majority, it is that the risk of explosion of two boilers of equal size and strength, when one is used one week and the oilier the next week, and so on, alternating, through the year, is just as great as if both boilers were used at the same time continuously through the year. This proposition is original, in this case, with the majority of the court. It is not found in the pleadings, was not raised in the court below, and is not alluded to in the briefs of counsel. It is not sound. It ignores the wear and tear and gradual deterioration and weakening that result from constant use. It takes no account of a change in the atmospheric conditions, and of the fact that boilers frequently explode from causes which are unknown, and cannot be ascertained. It is undoubtedly true that the view of the majority of the court on this question never suggested itself to the minds of Mr. Green and Mr. Eickhoff, although the latter is a skilled boiler inspector. But, if the proposition be true, it was a mistake of fact, or rather a "want of that scientific knowledge possessed by the majority of the court, relating to a matter about which both parties had equal opportunities of knowing what the fact was; and, there being, confessedly, no fraud on the part of either, the validity of the contract is not affected by the mistake. The consideration for the ancillary contract was ample. Mr. Green set up the boilers, and- incurred a large expense which he would not have done but for the agreement and assurance of the agent Eickhoff that they were insured, and that he might rest easy on that subject. The contract for the an-
Concurrence Opinion
I concur in the order affirming the judgment of the circuit court on the ground first stated in the foregoing opinion, hut would not be understood as expressing any opinion with reference to the further ruling that there was no evidence tending to show that the inspector had authority to modify the original contract of insurance.