183 U.S. 308 (1902), 80, Northern Assurance Company v. Grand View Building Association

Docket Nº:No. 80
Citation:183 U.S. 308, 22 S.Ct. 133, 46 L.Ed. 213
Party Name:Northern Assurance Company v. Grand View Building Association
Case Date:January 06, 1902
Court:United States Supreme Court

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183 U.S. 308 (1902)

22 S.Ct. 133, 46 L.Ed. 213

Northern Assurance Company


Grand View Building Association

No. 80

United States Supreme Court

January 6, 1902

Argued October 28, 1901




Overinsurance by concurrent policies on the same property tends to cause carelessness and fraud, and a clause in a policy rendering it void in case other insurance had been or should be made upon the property and not consented to by the insurer is customary and reasonable.

In this case, such a provision was expressly and in unambiguous terms contained in the policy sued on, and it was shown in the proofs of loss furnished by the insured, and it was found by the jury, that there was a policy in another company outstanding when the one sued upon in this case was issued, and hence the question in this case is reduced to one of waiver.

It is a fundamental rule in courts both of law and equity that parol contemporaneous evidence is inadmissible to contradict or vary the terms of a valid written instrument unless in cases where the contracts are vitiated by fraud or mutual mistake.

Where a policy provides that notice shall be given of any prior or subsequent insurance, otherwise the policy to be void, such a provision is reasonable, and constitutes a condition, the breach of which will avoid the policy.

Where the policy provides that notice of prior or subsequent insurance must be given by endorsement upon the policy or by other writing, such provision is reasonable, and one competent for the parties to agree upon, and constitutes a condition the breach of which will avoid the policy.

Contracts in writing, if in unambiguous terms, must be permitted to speak for themselves, and cannot, by the courts at the instance of one of the parties, be altered or contradicted by parol evidence unless in case of fraud or mutual mistake of facts, and this principle is applicable to cases of insurance contracts.

Provisions contained in fire insurance policies that such a policy shall be void and of no effect if other insurance is placed on the property in other companies without the knowledge and consent of the insuring company are usual and reasonable.

It is reasonable and competent for the parties to agree that such knowledge and consent shall be manifested in writing, either by endorsement upon the policy or by other writing.

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

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authority to alter or contradict the express terms of the policies as executed and delivered.

Where fire insurance policies contain provisions whereby agents may, by writing endorsed upon the policy or by writing attached thereto, express the company's assent to other insurance, such limited grant of authority is the measure of the agent's power.

Where such limitation is expressed in the policy, the assured is presumed to be aware of such limitation.

Insurance companies may waive forfeiture caused by nonobservance of such conditions.

Where waiver is relied upon, the plaintiff must show that the company, with knowledge of the facts that occasioned the forfeiture, dispensed with the observance of the condition.

Where the waiver relied on is the act of an agent, it must 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 facts, ratified the action of the agent.

In September, 1898, the Grand View Building Association, a corporation organized under the laws of Nebraska, in the District Court of Lancaster County of that state, brought an action against the Northern Assurance Company of London, incorporated under the laws of the Kingdom of Great Britain and Ireland, seeking to recover the sum of $2,500 as due under the terms of a policy of insurance that had been issued by the assurance company to the plaintiff company on December 31, 1896, on certain property situated in said Lancaster County, and which, on June 1, 1898, had been destroyed by fire.

Thereupon the defendant company filed in the said county court a petition and bond, in due form, and prayed for an order removing the cause to the Circuit Court of the United States for the District of Nebraska, and on September 29, 1898, the county court approved the bond and entered an order granting the prayer of the petition for removal.

Subsequently the case was put at issue on the petition, answer, and reply in the circuit court of the United States, and was so proceeded in that, on October 20, 1898, a special verdict was found by the jury empaneled in the case, and on January 14, 1899, a final judgment was entered for the plaintiff and against the defendant company in the sum of $2,500, with interest and costs. The cause was then taken to the United States Circuit

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Court of Appeals for the Eighth Circuit, and that court, on March 26, 1900, affirmed the judgment of the circuit court. 101 F. 77. Thereafter, on petition of the defendant company, a writ of certiorari was allowed, in response to which the record and proceedings in the cause were brought to this Court.

SHIRAS, J., lead opinion

MR. JUSTICE SHIRAS delivered the opinion of the Court.

In order that the questions discussed in this case and the grounds of our judgment therein may sufficiently appear, it seems proper to set out with substantial fullness the pleadings of the parties and the special verdict of the jury.

The plaintiff's petition, having alleged the making of the policy of insurance and the destruction of the property insured, then proceeded to allege in its fourth paragraph, apparently by way of meeting an expected defense, that

plaintiff, shortly prior to issuance of aforesaid policy by the defendant, had procured a policy of insurance from the [22 S.Ct. 134] Firemen's Fund Insurance Company, incorporated under the laws of California, insuring it against loss by fire of the same property in the sum of $1,500 for a term of two years, which insurance was then subsisting and remained in force to and including the date of said fire; that the fact of said subsisting insurance in said company was, by H. J. Walsh, plaintiff's president, disclosed to defendant at and prior to the execution and delivery of said policy, and prior to payment by plaintiff of said premium therefor, and was so by him orally disclosed and communicated to defendant's recording agent at Lincoln, Nebraska, A. D. Borgelt, who then had full authority from defendant to countersign and issue its policies and accept fire insurance risks in its behalf and accept and receive the premium therefor, and who in fact accepted said

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risk and issued said policy, and accepted and received said premium as such agent in behalf of defendant with knowledge beforehand of said concurrent insurance, and with the intent knowingly to waive the condition of said policy that "it shall be void if the insured now has or shall hereafter make or procure any other contract of insurance" on the property covered thereby. And by the aforesaid several acts and by procuring, receiving, accepting, and retaining of said insurance premium with knowledge of said subsisting concurrent insurance, the defendant has waived the said condition, and is estopped to claim benefit thereof, and is bound by its said policy notwithstanding said condition; that plaintiff had no insurance on said property except as before stated.

Having stated that plaintiff had rendered and delivered a statement of loss in compliance with the terms of the policy, the petition further alleged that,

on the 26th day of July, 1898, the plaintiff demanded of defendant the payment of said insurance, and defendant, disregarding its undertaking in that behalf, denies liability on the sole ground that said policy has been void from the date of its issue by reason of the said provision in regard to other insurance, the same provision which as aforesaid it had waived at the time of issuing its said policy.

The answer of defendant admitted the making of the policy, the destruction of the insured property by fire, and proof of loss, but denied specifically the allegations of the fourth paragraph of said petition, as follows:

Further answering, this defendant alleges that the policy of insurance which it issued to the plaintiff on December 31, 1896, contained the following provision:

This entire policy, unless otherwise provided by agreement endorsed hereon or added hereto, shall be void if the insured now has or shall hereafter make or procure any other contract of insurance, whether valid or not, on property covered in whole or in part by this policy.

The defendant further says that its policy in question was issued to the plaintiff with the express statement therein made that it was issued in consideration of the "stipulations" therein named and a certain amount of premium paid therefor. And said policy, besides the provisions

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above quoted, contains the following stipulation and condition:

This policy is made and accepted subject to the foregoing stipulations and conditions, together with such other provisions, agreements, or conditions as may be endorsed hereon or added hereto, and 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 endorsed herein or added thereto, and as to such provisions and conditions, no officer, agent, or representative shall have such power or be deemed or held to have waived such provisions or...

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