66 Mo. App. 199 | Mo. Ct. App. | 1896
Lead Opinion
This is an action on a policy of fire insurance. There is no question about the issuance of the policy, or the destruction of the property by fire during its life. It is also conceded that due notice of the fire was given, and that proper proofs of loss were furnished. At the time the policy was issued the property was mortgaged, and the policy provided that any loss should be paid to the mortgagee. The defense was that, prior to the destruction of the property, the conditions of the mortgage were violated, and that, by reason of-this, foreclosure proceedings were commenced which invalidated the policy. The cause was submitted to the circuit court on an agreed statement of facts, which resulted in a judgment for the defendant. The plaintiffs have appealed.
The facts as agreed on are these: The property was owned by the Springfield Steam Laundry Company. The insurance was taken out by it, and by the terms of the policy the loss, in case of the destruction of the property, was to be paid to the mortgagee as his interest might appear. After the loss the claim was assigned by the mortgagee to the plaintiff, Heffernan. The mortgage by its terms was subject to foreclosure, if the taxes on the mortgaged property were permitted to become delinquent. This condition of the mortgage was broken, and by reason of it the trustee advertised the property for sale as provided by the terms of the mortgage. The sale was enjoined. Subsequently the taxes were paid, and the injunction proceedings dismissed. A short time thereafter the fire occurred. The'policy contained this provision, to wit: “If the property be sold, transferred, or is or becomes incumbered by mortgage or trust deed, or by judgment, tax, or mechanics’ lien, or upon the commencement of pro
It is maintained by the plaintiffs that the advertisement of the property for sale was not the commencement of foreclosure proceedings; that is, that the advertisement was a mere proposition of sale, or a notice to bidders to appear at a contemplated sale. The only case relied on to support this position is that of Michigan Insurance Company v. Lewis, 30 Mich. 41. There the policy contained the following clause: “In case of any transfer or termination of the interest of the insured, * * * or in case any mortgage, lien, or incumbrance, shall be executed thereon, or shall attach thereto, or if the title thereto shall be in any way changed or affected after the date of this policy,
The last extract from the foregoing opinion states precisely the case we have here, for it is expressly agreed that the commencement of foreclosure proceedings should annul the policy, and the entire opinion clearly indicates the difference between that case and this, thus making the case an authority against rather than in favor of plaintiffs’ position. Now, there can be no question that an advertisement of property under a mortgage with power of sale is the commencement of foreclosure proceedings, and, as it is conceded in this case that the condition of the mortgage has been broken by failure to pay taxes, we must hold that the' proceedings of foreclosure were rightfully commenced. This, under the plain terms of the contract, avoided the policy. It may be that such a condition may operate unjustly in individual cases, but courts have no power to make contracts for litigants, and can only relieve them from improvident or oppressive bargains when it is shown that they have been overreached.
But such clauses as we have here are by no means unusual in insurance policies, and, while they may operate oppressively in particular cases, a little reflection will show that they rest on a sound business principle. An insurance company may be willing for a certain premium to insure mortgaged property so long as the owner is not in default, but, after default and foreclosure proceedings have been commenced, it may not deem it provident to continue the insurance, at least at the same rate, for it is clear that the moral risk would be increased by the new condition of things. In the case of Titus v. Glens Fall Insurance Company, 81 N. Y. 410, the policy there in suit contained such a, clause. The property was advertised for sale under a judgment of foreclosure, and a few days before the
So, in the case of Merchants Insurance Company v. Brown, 25 Atlantic Rep. 992, the Maryland court of appeals decided that the advertisement of mortgaged property for sale as provided by the terms of the mortgage was the commencement of foreclosure proceedings, and avoided the policy under a clause which provided that the policy should be annulled “if, with the knowledge of the insured, foreclosure proceedings be commenced or notice given of sale of any mortgage or trust deed.”
But it is insisted that the forfeiture (if any) must be considered as having been waived by the defendant’s local agent. The evidence is that the agent had power to issue policies, that he was advised of the advertisement of the property under the mortgage, and that he took no steps to cancel the policy. The doctrine of many of the cases is that an agent who has authority to issue policies, that is, make contracts of insurance, must be presumed to have authority to modify or change the contract or waive forfeitures. But this can not be where such power is expressly vested in a particular officer of the company. This was our decision in the case of Jenkins v. German Ins. Co., 58 Mo. App. 210. To the same effect are the cases of Loehner
It follows that on the admitted facts the judgment of the circuit court was for the right party, and it must be affirmed. Judge Rombauee concurs. Judge Bond dissents, and is of the opinion that the decision is in conflict with the following decisions of the supreme court: Franklin v. Ins. Co., 42 Mo. 461; Hamilton v. Home Ins. Co., 94 Mo. 353; Hanna v. Ins. Co., 56 Mo. App. 582, and others cited in his dissenting opinion. The cause will, therefore, be certified to the supreme court for final determination.
Dissenting Opinion
DISSENTING OPINION BY JUDGE BOND.
The agreed statement of facts in this case shows that the defendant is a foreign corporation; that it issued the policy in suit through its resident agent and made it payable, in case of loss, to the trustee of an existing mortgage; that the policy ran from January 24, 1894, to January 25, 1895; that on March 14, 1894, the trustee published a notice that he would sell the property on April 7, 1894, because of the failure of the mortgagor to pay certain taxes and take out further insurance; that on March 20, the mortgagor paid said taxes and took out the additional insurance, and on March 30 enjoined the trustee from proceeding further under said advertisement. No sale was ever made and the injunction suit was dismissed.
Each and all of these facts were reported to the agent of defendant residing at Springfield, who issued the policy. The fire causing the destruction of the property did not occur until May 12, 1894, or more than two months after the day fixed in the notice of sale. Neither the defendant company nor its agent at
It is now insisted/ that the trial court erred in directing a judgment for defendant for two reasons: First, that the advertisement was a mere notice of future sale, was not the offer of the property for sale, and, therefore, not within the terms of the policy provision, since, under the strict construction applicable to forfeitures of that nature, the provision in question should only be held to mean the taking of some step or doing some act essential to the actual sale of the property — in a case of foreclosure out of court, like the one at bar, the making an offer of the property or the actual sale thereof on the day appointed. This contention seems to be borne out by a correct understanding of the language and decision of Judge Coolly in Michigan Ins. Co. v. Lewis, 30 Mich. 44.
The second point made by appellants is that, if the policy provision for forfeiture could be construed as embracing a mere notice that the sale would be conducted at a future day, although such sale never took place, still a forfeiture on that ground can not be insisted upon by the defendant under the agreed facts. There seems to be no escape from this conclusion, when the facts are kept in mind. These are that the advertisement by the trustee' under the mortgage was in invitum as to the assured; that it was immediately reported
There can be no doubt as to the power of the eomr‘ pany to waive a forfeiture for any of the above provisions of the policy. It waived one, when the policy was issued, by making it directly payable to the mortgagee. The only limitation which the company attempted to put upon its power to waive the above provision was that its consent should be evidenced by written indorsement on the policy. The questions, therefore, are: First, did this language preclude the defendant from making an implied oral waiver of the grounds of forfeiture mentioned in the foregoing provision? Secondly, if not, could a waiver by, or estoppel against, defendant be inferred from the agreed facts?
The first question presents no difficulty. Contracts
As to the second, it is believed the application of settled principles of law to the agreed facts will demonstrate that defendant has waived, or is estopped to urge, a forfeiture of the policy in suit on the ground alleged. The full notice given at the time to defendant’s agent, who issued the policy, of all the facts pertaining to the trustee’s advertisement was in law notice of such facts to the defendant company. Hamilton v. The Home Ins. Co., 94 Mo. loc. cit. 368; Franklin v. Ins. Co., 42 Mo. 456. With the knowledge thus acquired and with actual notice also, as appears from its letter denying liability, defendant continued its policy — giving no hint of a declaration of forfeiture thereon, — from March 14, 1894, until June thereafter. By so doing the assured was reasonably led to believe that his property was covered by insurance on May 12, 1894, when it was destroyed by fire, nor did he learn of a contrary intent on the part of defendant until he got a letter to that effect dated June 5,1894. The assurance thus derived
Waiver is ordinarily a question of intention, which may be implied from evidence of knowledge of the facts and acquiescence in the status thus created. Estoppel is not necessarily dependent on intention, but may arise from conduct tending to mislead another to his prejudice. In the case at bar there was evidence, as we have seen, tending to prove both waiver and
No jurisdiction has asserted the doctrine of waiver or estoppel by conduct more vigorously than the appellate courts of this state. In Hamilton v. Home Insurance Company, supra, the facts were that the agent of a nonresident company, who had solicited insurance in its name, was aware that subsequent insurance had been taken out by the assured in other companies. A clause in the policy of the first company rendered it void, if subsequent insurance should betaken out without its written consent. Held, that, no objection being made by the company or its agent after the agent had acquired knowledge of the violation of such provision, there was a waiver of forfeiture on that account. The doctrine was'put upon the ground that it was the duty of the insurance company, if it intended to insist on the forfeiture of its policy, to take steps to cancel the same upon notice to its agents of the subsequent insurance, and that, failing so to do, the assured was warranted in treating the provision for forfeiture as waived. This case is in strict accord with the modern doctrine expressed in the able opinion in 69 Federal Reporter, supra, and other cases. Burlington Insurance Company v. Rivers, 28 S. W. Rep. 453; Niagara Ins. Co. v. D. N. Lee, 73 Tex. 641; Morrison v. Ins. Co., 69 Tex. 363; Cohen v. Ins. Co., 67 Tex. 325; Ins. Co. v. Sheffy, 71 Miss. 919; Bellevue Roller Mill Company v. London & L. Fire Ins. Co., 24 Ins. Law Journal, 331.
The issue in this case is one of waiver.or estoppel as against the company itself. There is no issue here as to waiver by the agent at Springfield. Hence, it is irrelevant to discuss the relative powers of the agent at Springfield and the company’s secretary at Chicago under another provision of the policy. The provision