Rogers v. Connecticut Fire Ins. Co.

• Decision Date: 12 June 1911
• Citation: 139 S.W. 265,157 Mo. App. 671
• Parties: ROGERS v. CONNECTICUT FIRE INS. CO. OF HARTFORD.
• Court: Missouri Court of Appeals

139 S.W. 265

157 Mo. App. 671

ROGERS v. CONNECTICUT FIRE INS. CO. OF HARTFORD.

Kansas City Court of Appeals. Missouri.

June 12, 1911.

Rehearing Denied June 28, 1911.

1. INSURANCE (§ 388)—WAIVER OF STIPULATIONS.

Insurer's omission to dissent on insured's expression of intent to ignore a stipulation, such as one limiting the amount of other insurance, at some indefinite time, does not constitute a waiver of the stipulation by insurer.

2. INSURANCE (§ 392)—FIRE POLICIES—STIPULATIONS LIMITING OTHER INSURANCE — WAIVER.

A fire insurer waives a stipulation limiting other insurance by collecting and retaining a premium, knowing that the stipulation has been ignored.

3. INSURANCE (§ 389) — FIRE POLICIES— THREE-FOURTHS VALUE CLAUSE—EFFECT.

Under Rev. St. 1909, § 7030, prohibiting insurance against fire for more than three-fourths of the property's value, an insurer is estopped to claim that the total insurance exceeded that limit when the policy was issued.

4. INSURANCE (§ 493)—FIRE POLICIES—"TOTAL LOSS."

In an action on a fire policy covering an electric power house and equipment, it was proper to instruct that "total loss" does not mean entire destruction of the property, but such destruction as would render it of no value for the purpose for which it was used, or intended to be used, when the policy issued and the fire occurred.

5. INSURANCE (§ 602)—FAILURE TO ADJUST— PENALTY.

Under Rev. St. 1909, § 7068, providing a penalty for vexatiously refusing to pay an insurance loss, insured need not show affirmatively that the refusal was vexatious; it being sufficient if that fact be deducible by reasonable inference from all the facts and circumstances in evidence.

6. INSURANCE (§ 602)—REFUSAL TO ADJUST —"VEXATIOUS."

"Vexatious," within Rev. St. 1909, § 7068, providing a penalty for an insurance company's vexatious refusal to pay a loss, means without reasonable cause.

7. INSURANCE (§ 665)—FIRE POLICIES—REFUSAL TO ADJUST—PENALTY—RIGHT TO RECOVER.

Evidence held to show that a fire insurance company's refusal to pay a loss was not without reasonable cause, within Rev. St. 1909, § 7068, prescribing a penalty for vexatious refusal to pay the same.

Appeal from Circuit Court, Clinton County; A. D. Burnes, Judge.

Action by Hugh L. Rogers against the Connecticut Fire Insurance Company of Hartford. Judgment for plaintiff, and defendant appeals. Affirmed on condition of remittitur.

R. H. Musser and F. B. Ellis, for appellant. John A. Cross, W. S. Herndon, and E. C. Hall, for respondent.

JOHNSON, J.

This suit is on a fire insurance policy of $1,000, issued by defendant to plaintiff May 26, 1906. Plaintiff was the owner and operator of an electric light plant in the city of Lathrop, and the policy in suit covered the gas engine and dynamo which were in his power house, and so attached thereto that they must be considered a part of the reality, and not as personal property. Two days after the policy was issued the power house was destroyed by fire, and the machinery, of which the engine and dynamo were the principal parts, was so badly damaged that plaintiff claims it became valueless for the purposes of its use as an integral part of the power plant. The evidence of plaintiff is to the effect that the machinery had no value after the fire, except what might be realized from it if sold as junk; while evidence introduced by defendant tends to show that by an outlay of $2,500, in the replacement of destroyed or worthless parts and in the repairing of damaged parts, the engine and dynamo could be restored to usefulness.

The policy contained a provision that, if there was other insurance on the property the policy would be void, unless such other insurance was indorsed on the policy, and the only additional insurance indorsed was a policy of $4,000 previously issued by the Home Insurance Company of New York. In fact, at that time there was other insurance on the engine and dynamo amounting to $4,200, and the policy in suit brought the total outstanding insurance on that property to $9,200. Defendant claims that it had no knowledge of any other insurance than that indorsed on the policy until after the fire. Plaintiff's evidence tends to show that the exact facts respecting the other insurance were stated to the agent, who represented defendant in the transaction, before the policy was issued, and that defendant knew that with the policy in suit the property was insured for $9,200.

It appears that defendant's agent was in the banking business at Lathrop, and, fearing defendant might decide to cancel the policy, he did not deliver it to plaintiff, but kept it in the bank until about two weeks after the fire, when he delivered it. He collected the premium of $31, from plaintiff, and deducting his commission remitted the remainder. Defendant received this premium, has retained it to this day, and at no time has even offered to return it. The agent admits that the day after the fire he knew just what insurance was on the property, and that he delivered the policy. We quote from his cross-examination: "Q. The day after the fire Pross told you the whole amount of insurance he had? A. Yes. Q. And you had this policy in your company? A. Yes, sir. Q. And you charged up on the bank books $31 against Mr. Rogers, the premium on that policy, after the fire? A. Yes. Q. You took that $31 to your credit? A. Yes. Q. And returned 85 per cent. of it to the company, and kept out 15 per cent.? A. Yes, I kept out my commission. Q. Did you return 85 per cent. to the company? A. Yes. Q. Was that ever returned to Mr. Rogers? A. No. Q. You never returned him your 15 per cent.? A. No. Q. Some time in June you delivered this policy to Mr. Rogers? A. Yes. Q. Do you know this man, Fleming? A. Yes. Q. He is the state agent? A. I understand him to be. Q. Didn't Fleming tell you before you delivered that policy that they did not deny liability on that policy? (Objections). Q. Didn't he tell you, Sam, in talking about it, "We don't deny liability"? A. He told me that; but I don't remember whether it was at that time or later. Q. But it was before you delivered the policy? A. No; I think not. I am not positive on that point, though. Q. What time did you deliver the policy? A. After he and Mr. Welsh came to Lathrop. I don't think I told him anything about holding the policy. Q. You held it a sufficient length of time, and when they didn't tell you not to deliver it you delivered it? A. My purpose in holding the policy was to give the office at Chicago time to reject it, not to see Mr. Fleming. I don't know that Mr. Fleming ever knew I held the policy. I don't remember about that. But I held it to hear from the Chicago office, before I delivered it to Mr. Rogers. Q. When did you charge this $31 premium to Mr. Rogers? A. I think about the middle of June."

Evidence was heard on the issue of the actual value of the machinery, from which it is disclosed that the property was not worth to exceed $8,000. The cause was submitted to a jury, and a verdict was returned for plaintiff in the sum of $1,000 on the policy and $100 for attorney's fees. Defendant appealed.

A number of questions of law raised by the pleadings, evidence, and instructions are discussed in the briefs, and we shall dispose of the controlling questions in their logical order.

At this term we reversed a judgment recovered by plaintiff against the Home Insurance Company of New York on the policy to which we referred in our statement of facts. Rogers v. Insurance Co., 136 S. W. 743. Speaking through Ellison, J., we held in that case that plaintiff had violated the provision of the policy relating to additional insurance, and that the evidence, instead of showing a waiver of that provision, affirmatively disproved the contention of plaintiff that there was a waiver. The policy involved in that suit was the first insurance procured by plaintiff on the property, and the only fact on which plaintiff predicated his claim of waiver was that after that policy was issued plaintiff caused the agent of the company to be informed of his purpose to procure additional insurance at some indefinite future time. We applied the rule, which finds abundant support in the authorities, that the expression by the assured of an unexecuted intention to ignore a contract stipulation at some indefinite time imposes no obligation on the insurer to dissent (Polk v. Insurance Co., 114 Mo. App. 514, 90 S. W. 397), and consequently that such fact, of itself, will not suffice as the foundation of a claim that the insurer waived the stipulation. But in express terms Judge Ellison distinguished the facts of that case from a state of facts such as is disclosed by the present record. He said (page 744): "Thus, if it had been shown, as pleaded by plaintiff, that there was other insurance at the time this policy was taken and defendant's agent knew of it, and yet collected the premium and delivered the policy without indorsing it on the policy, it would be presumed he waived that requirement."

The rule is well stated as follows in Gray v. Insurance Co., 155 N. Y., loc. cit. 184, 49 N. E. 676: "Where an insurance company issues a policy, with full knowledge of facts which would render it void in its inception if its provisions were insisted upon, it will be presumed that it by mistake omitted to express the fact in the policy, waived the provision, or held itself estopped from setting it up, as a contrary inference would impute to it a fraudulent intent to deliver and receive pay for an invalid instrument."

The conceded fact that defendant, with full knowledge of the true facts relating to other insurance, collected and retained the premium of plaintiff and then delivered the policy, conclusively establishes the claim of waiver. We so decided in the recent case of ...