166 F. 231 | 8th Cir. | 1908
Lead Opinion
(after stating the facts as above). It is not and cannot he disputed that a failure to furnish proofs of loss in cases like the present constitutes a breach of a condition precedent to recovery. Plaintiff, in its petition, instead of claiming that it had performed this condition, admitted in effect that it had not done so, and justified its failure by alleging that defendant had waived its performance. Proof of the waiver consisted of oral evidence only. It tends to show that an agent of defendant company, a Mr. Lane,, by its direction visited the scene of the fire soon after its occurrence in company with insurance adjusters of other insuring companies for the purpose of making an independent examination of the loss and reporting to defendant company his conclusion; that he made such examination and report, prepared for plaintiff a proof of loss under
Defendant’s testimony tended to show that the agent limited his consideration and action to the policy issued on Majr 5th; that he declined to consider an)*- claim under the two policies in suit because he discovered a “builder’s permit” attached as a rider to them, and was informed that the structure had been in operation as an ore crusher more than 30 days without permission or readjustment of rate; that he told the officers then present that he was in no position to admit or deny liability on these policies, and that he had no authority to take any action with respect to them.
We have now referred to the evidence sufficiently to show that it was exclusively of an oral and disputed character. There is no claim that the waiver was in writing or indorsed on the policy; there is no proof that Mr. Lane had any express authority to waive the required condition, or that any waiver was made in writing or indorsed on the policies; and there is no proof that defendant afterwards, with knowledge of the facts of the case, or otherwise, ratified the action of the agent except in so far as it may be implied from the fact that the company paid a loss under the policy of May 5th on proof of loss so made by the same agent, Lane.
We are relieved by the decision of the Supreme Court of the United States in the case of Northern Assurance Company v. Grand View Building Association, 183 U. S. 308, 22 Sup. Ct. 133, 46 L. Ed. 213, from much responsibility in this case. Prior to that decision there had been a diversity of views expressed by courts of the United States, both national and state, on the subject of waiver of provisions and conditions of policies of insurance by agents. In that case the Supreme Court, by Mr. Justice Shiras, exhaustively reviewed former decisions, and announced conclusions which have been since then adhered to by that court and necessarily followed by all other courts of the United States. He there declared that the principle governing contracts in general requiring them, if in writing and unambiguous, to speak for themselves, is applicable to cases of insurance contracts as fully as contracts on other subjects. He there said:
“That it is competent and reasonable for insurance companies to make it matter of condition in their policies that their agents shall not be deemed to have authority to alter or contradict the express terms of the policies as executed and delivered; that where fire insurance policies contain provisions whereby agents may, by writing indorsed upon the policy or by wriling attached thereto, express the company’s assent to other insurance, such limited grant of authority is the measure of the agent’s power in the matter, and where such limitation is expressed in the policy, executed aud accepted, the*235 Insured is presumed, as matter of law, to be aware of such limitation: tlmi, insurance companies may waive forfeiture caused by nonobservnnee of such conditions; * * * that, whore the waiver relied on is an act of an agent, it muHL be shown either that the agent had express authority from the company to make the waiver, or that the company subsequently, with knowledge of the fuete ratified the action of the agent.”
The danse of the policy under consideration by the Supreme Court: was exactly the same as that limiting the power of an agent in the present policies, namely:
“No officer, agent or other 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 herein or added thereto, and as to such provisions and conditions no officer, agent or representative shall have sneh power or he deemed or held to have waived such provisions or conditions unless such waiver, if any, shall be written upon or attached hereto, nor shall any privilege or permission affecting the insurance under this policy exist or tie claimed by the insured unless so written or attached.”
.In Hagan v. Scottish Ins. Co., 186 U. S. 123, 433, 22 Sup. Ct. 862, 46 L. Ed. 1229, and Hartford Fire Ins. Co. v. Wilson, 187 U. S. 467, 478, 23 Sup. Ct. 189, 47 L. Ed. 261, the Supreme Court reasserted the conclusions stated in the Northern Assurance Company Case, and in the last-mentioned case said:
“There is no attempt, by parol testimony, to contradict any stipulations of the policy, something which we have recently held cannot be done.”
We have scrupulously recognized and applied that doctrine in the following cases: Modern Woodmen of America v. Tevis, 54 C. C. A. 293, 117 Fed. 369; Supreme Council of Royal Arcanum v, Taylor, 57 C. C. A. 406 121 Fed. 66; Atlas Reduction Co. v. New Zealand Ins. Co., 71 C. C. A. 21, 138 Fed. 197, 9 L. R. A. (N. S.) 433; Connecticut Fire Ins. Co. v. Buchanan, 73 C. C. A. 111, 141 Fed. 877, 4 L. R. A. (N. S.) 758; Mulrooney v. Royal Ins. Co. (C. C. A.) 163 Fed. 833.
The doctrine is a reasonable one. It tends to promote certainty in the proof of transactions, and to inculcate a salutary and wholesome regard for the very terms of a contract when deliberately put in writing by competent parties. There is, therefore, no escape fioui the conclusion that, as Agent Rane was not shown to have any express authority to waive the condition requiring proofs of loss, and as no such waiver ivas written upon or attached to the policies, there was in contemplation of law no waiver at all, unless the defendant company, with full knowledge of the fact that an agent had attempted to waive the condition and of what he had said and done in doing so. ratified his action. No claim of ratification is made except one based on the fact that defendant paid the policy issued May 5, 1907. As proof of loss had been furnished under this policy, and thereby a legal liability had been established, we perceive no reason why the payment of that demand should dispense with a condition precedent to liability on other and different policies. Moreover, as the record is silent concerning knowledge by defendant’s general officers concerning anything said or done by the agent, Rane, claimed to constitute a waiver, there is and can be no ratification.
It was argued at the bar that the proof of loss duly made under the policy of May 5th was sufficient proof of loss under the policies in suit; but this contention, in our opinion, is unsound. Conceding, but not admitting, that performance of the condition requiring proof of loss could be shown when the only issue joined was that such performance had been waived by defendant, it does not appear that the proof of loss as actually made conformed to the requirements of the policies now in suit. We have already called attention to the great detail of facts which the insured by the stipulations of the policies was required to make known in the proof of loss. The proof as actually made was not offered in evidence, and we have no means of knowing what it contained, or that it contained information on each and all of the subjects specified and required to be furnished by the policies in suit. True, there is some oral evidence on this subject, but it is unsatisfactory and in some respects contradictory. The contents of the proof as made could have been made certain, and ought to have been made so by the production of the document. That was the best, and, so far as it appears in this case, the only, admissible evidence of the contents, Nor the reasons already given the judgment must be reversed, but, as the case may be again tried, we deem it best to express the opinion of the court on the question fully debated at the bar, whether the proof of occupancy of the building was such, as precludes recovery.
The policies were issued to cover a builder’s risk on a structure to be erected and equipped with requisite machinery to accomplish the object of crushing ore. Inasmuch as the risks and rates for insurance of occupied premises, are greater, as appears from the evidence, than those of premises in process of construction, the policies contain a warranty that “the premises hereby insured shall not be occupied for a longer period than thirty days without special permission being granted in writing hereon and readjustment of rate.” In other words, it was agreed that until the expiration of 30 days after occupancy, and for no longer time, the premises would be insured by the policies in suit. The premises consisted not only of a building, but of machinery so assembled and adjusted within the building as when working together should accomplish the object of crushing ore. There are few relevant facts. It appears that the crusher was intended to have a capacity for crushing 25 tons per hour when in full operation. The evidence shows that the wheels were first turned on April 7, 1907;
These observations, in our opinion, satisfactorily show that the starting of the wheels one, two, or three times even, in an attempt to perform the function of the mill, might have been experimental work necessary to determine whether the crusher as a combination of building and machinery would do its work. If so, it would not have constituted occupancy within the meaning of the policy. Such occupancy must he determined in view of the object to be accomplished by the completed structure. If the structure had been built and the machinery installed by a contractor for the plaintiff, we apprehend that the first act of starting the wheels to test whether the structure and associated machinery would operate would not constitute acceptance of the work by the owner. So, likewise, we think the mere attempt to ascertain whether the combination of structure and machinery would operate and do its intended work does not necessarily conclude
In view of the fact that the cause must be remanded for another trial, consideration of the sufficiency of the pleadings to permit proof of “other insurance,” which defendant claims was fatal to recovery, and consideration of the refusal by the trial court to permit an amendment to the answer during the progress of the trial, will not be undertaken. Parties will have ample opportunity to make all proper amendments before the next trial. The answer to some other questions argued at the bar is necessarily involved in the conclusions already stated.
The judgment must be reversed, and the cause remanded, with directions to grant a new trial. It is so ordered.
Concurrence Opinion
(concurring). The only portion of the foregoing opinion that does not meet my full concurrence is as to the discussion respecting the occupancy of the property. As read by me, the evidence is clear that the 3 days excepted from the actual occupancy of the building, within the meaning of the policy, were in no legal sense different from the other 31 days. The first 3 days’ operation of the mill was with the same complement of employes and for the purpose of crushing ore for commercial use as the remainder of the time the mill was used, with varying results. There was nothing, to my perception, in the manner and visible purpose of the operation to indicate that one day more than another was merely for experimental tests or adjustment of machinery; nothing in the continuous period of 34 days’ running to enable the jury, without mere conjecture, to determine where the running for one purpose ended and where for the other purpose it began. With as much reason, it seems to me, had the defendant in error run the mill in the same fashion for 40 days, and a less quantity of ore had been crushed in the first 10 days than the designed capacity for output, or for a like subsequent period, the first 10 days could be arbitrarily eliminated by assuming them to have been employed merely for purposes of adjustment and test of the machinery and structure. As this, however, .is a difference of view somewhat on a matter of fact; and the case is to be retried, if it should ever reach this aspect of the case, possibly developing additional facts, further discussion at this time of the question may be somewhat academic.