West v. Norwich Union Fire Insurance Society

10 Utah 442 | Utah | 1894

Babtoh, J.:

Certain property belonging to the plaintiff having been destroyed by fire, he brought this action to recover the amount of an insurance policy issued thereon by the defendant. The jury returned a verdict assessing the plaintiff's damages at $1,600, and judgment was rendered thereon accordingly. Upon the overruling of a motion for a new trial, the defendant appealed both from the judgment and order denying a new trial.

It appears from the record, substantially, that the policy sued upon was issued by the defendant company on the 6th day of February, 1892, and was a renewal of a policy which was about to expire, and upon which was indorsed, “ Permission for other insurance concurrent herewith;” that the Utah Loan & Trust Company of Ogden city was the agent of the defendant, and wrote these policies of insurance; that there was also another policy of insurance at the same time, on the same property, in another company, of which the Utah Loan & Trust Company was also the agent; that the property insured was on leased ground, and was destroyed by fire on the 24th day of March, 1892; that at the time of the fire the Ogden State Bank had a chattel mortgage on the property, but made no claim of any indebtedness due from plaintiff by reason ■of the mortgage; that, at the time the policy in question was issued, the agent of the defendant knew of the existence of the mortgage, and that the property insured was ■on leased ground, and promised plaintiff to make the proper indorsement on the policy, but failed to do so; 'that after the fire the agent of the defendant introduced to plaintiff one Tiedman, an insurance adjuster for the defendant company; that the plaintiff gave Tiedman a ■sworn statement showing the cause of the fire and the amount of damage done, and together they selected two builders to estimate the value of the house destroyed, which estimate was given to Tiedman, and an inventory was made of the property which was saved; that Tiedman then left, promising to return in a few days, but failed 'to do so, and soon thereafter the defendant repudiated the plaintiffs claim.

The real question is, what was the effect of the contract •of insurance under this state of facts? Counsel for appellant contend that the plaintiff cannot recover because he had other insurance on the property, and failed to have the consent of the defendant company thereto indorsed on the policy in question, which failure was a violation of that clause in the policy which provides that “the entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void if the insured now has, or shall hereafter make and procure, any other contract of insurance, whether valid or not, on property ■covered, in whole or in part, by this policy.” If this ■clause be literally construed, and the agent cannot waive ■a compliance therewith by his acts or neglect, and bind the principal, as is insisted, then, indeed, the insured is without a remedy. The agent was authorized to issue policies to parties seeking insurance, to fix rates and premiums, and to countersign, renew, and sign the transfer of policies in Ogden and vicinity. Where such powers are conferred upon an agent of an insurance company, he becomes the general agent of such company within his district, and his acts, performed within the scope of his agency, will be binding upon his principal, and his knowledge and consent will be that of his principal. The company is bound, not only by his acts, but also by whatever may be said or done by him regarding the contract or risk. Through him the company has knowledge of every fact in relation to the insurauce or contract, and when he issues, additional insurance on the same property for another company he becomes the agent of both companies, and the former company will be conclusively presumed to have-knowledge of the additional insurance. If, then, such company fail to avail itself of its right under its contract, to object to such additional insurance, and to declare the policy void, so long as there is no apparent danger of loss, it will be estopped from insisting upon a forfeiture of the-policy after loss has occurred, because its. consent to other insurance was not indorsed thereon in writing.

These policies are in a printed form, and, as a general thing, the insured knows little about their conditions and restrictions; but the agent is presumed to know them, and justice and fair dealing will not permit him to lull the-insured into a state of security by promises, continue to receive the premiums, and then, when loss occurs, the company deny its liability because the agreement of its agent was not indorsed as required by the insurance contract. In the case at bar the insured requested the agent of the defendant to make the proper indorsement, which he promised to do, but, after having issued the new policy,, for some cause failed to fulfill his agreement; and it is apparent from tbe record that the agent issued the additional insurance with the full knowledge of the existence of the policy in question. TJnder these circumstances, the clause of the policy now under consideration cannot avail the defendant. A verbal agreement is of as high a legal degree as one in writing, and either one may be varied or abrogated by subsequent agreement, parol or written; and, upon principle, there appears to be no good reason why this rule should not apply.to insurance companies as well as private individuals. Therefore the agreement of the agent, by which he promised to indorse on the policy permission for further insurance, is regarded as the agreement of the defendant company, and is binding upon it. The fact that it had no actual knowledge of it at the time it was made, and did not actually assent to it, is entirely immaterial, because it was within the' scope of the agent’s authority to make it. Nor does the fact that the policy in question contained a clause restricting the agent’s power to waive any provision or condition of the policy add force or give effect to the clause under consideration, because the agent had the legal capacity to agree that other insurance might be procured on the property; and he having agreed to do this, and then failed to perform, the defendant cannot now be heard to complain, because the neglect and failure of the agent was the neglect and failure of the company.

It is true this question has been attended with much difficulty, and the decisions of the courts are by no means uniform. Many of the earlier decisions appear to hold the parties rigidly to the terms of the insurance contract. Upon examination of the more recent authorities it seems clear that the rule of strict construction, in regard to the terms of an insurance policy, has been much relaxed, and the courts now hold that where an insurance company or its agent bas been notified of additional insurance, or of changes in the condition of the property, and no objection has been made, the company will be estopped from insisting on a forfeiture because permission in writing was not indorsed on the policy. An agent who has the power to enter into contracts of insurance and issue policies may also waive forfeiture. Wood, in his treatise on the Law of Fire Insurance (volume 2, § 415), says: “That an insurancé agent authorized to make contracts of insurance and issue policies may waive forfeiture, and reinstate and restore a void policy as a valid instrument, is held by numerous cases. Indeed, it is a power incident to the authority to make a contract of insurance, and the company is as much estopped from denying that he possessed such power as it is from denying his authority to make contracts, when it has delegated such power to him or permitted him to exercise it.” See, also, Id. §§ 383, 416.

In Pelkington v. Insurance Co., 55 Mo. 172, Mr. Justice Wagner, delivering the opinion reversing the lower court, said: “The court, by its ruling in striking out the replication, virtually decided that it was absolutely necessary to obtain the written indorsement of the company’s assent to the additional insurance, before any recovery could be had. .There are cases which undoubtedly sustain this position, but the tendency of the modern decisions is to relax and modify this stringent doctrine. It is emphatically averred that the agent was duly notified of the subsequent and additional insurance, and assented to the same. Notice to the agent was notice to the principal, and the company was bound by that notice.” 2 May, Ins. §§ 369, 370; Kahn v. Insurance Co. (Wyo.), 34 Pac. 1059; Insurance Co. v. Earle, 33 Mich. 143; Insurance Co. v. Ruckman, 127 Ill. 364, 20 N. E. 77; Insurance Co. v. Munger (Kan.), 30 Pac. 120; Insurance Ass’n v. Griffin, 66 Tex. 232, 18 S. W. 505; Cobb v. Insurance Co., 11 Kan. 97; Insurance Co. v. Taylor, 73 Pa. St. 342; Weed v. Insurance Co., 116 N. Y. 106, 22 N. E. 229.

The next point raised is in relation to the clause in the policy relating to chattel mortgages. Counsel insists that, the insured haying had such a mortgage on the property, it avoided the policy. The existence of this mortgage was known to the agent when he issued the policy, and therefore the views expressed herein in regard to additional insurance apply with equal force to the question raised concerning the chattel mortgage. So, likewise, as to the clause in the policy, ‘^that the policy should be void if the subject of the' insurance be on ground not owned by the insured in fee simple,” because the agent knew, when he issued the policy, that the -property insured was on leased ground. The company' should not be permitted to perpetrate a fraud on the insured by accepting the premium, and then, after loss had been incurred by fire, repudiate the policy because the subject of the insurance was upon leased ground. Nor do we think the court erred in admitting the evidence in regard to Tiedman’s representing himself as an adjuster of the defendant, and in regard to the proof of loss. In fact, under the circumstances of this case, as shown by the record, no proof of loss was necessary, for the company repudiated the policy, and refused to recognize the plaintiff’s claim, on other and distinct grounds, and thereby proof of loss was waived. See Daniher v. Grand Lodge, ante, 110, 37 Pac. 245. We are also of the opinion that the allegations of the complaint were sufficient to admit evidence as to waiver. Where a pleading contains an allegation of the performance of a condition, it is not absolutely necessary to allege a waiver, because proof thereof is admissible under the general allegation. 2 May, Ins. § 589; Insurance Co. v. Dougherty, 102 Pa. St. 568.

It is not deemed necessary to consider any of the other points raised in tbe record* because we tbink tbey present no reversible error. The judgment is affirmed.

Merritt, C. J., and Smith* J.* concur.