Westchester Fire Ins. Co. v. Earle

• Decision Date: 05 January 1876
• Court: Michigan Supreme Court
• Parties: The Westchester Fire Insurance Company v. James D. Earle and another

33 Mich. 143

The Westchester Fire Insurance Company v. James D. Earle and another

Supreme Court of Michigan

January 5, 1876

Heard November 2, 1875 [Syllabus Material]

Error to Kent Circuit.

Judgment affirmed, with costs.

Joslin & Kennedy, for plaintiff in error, that a waiver of the condition in the policy could not be established except as provided by the policy, cited: Barrett v. U. M. F. Ins. Co. 7 Cush. 175; 9 Cush. 471; Worcester Bank v. Hartford Fire Ins. Co., 11 Cush. 265; Conway Tool Co. v. Hudson R. Ins. Co., 12 Cush. 144; Kimball v. Howard Fire Ins. Co., 8 Gray 33; Parks v. Gen. Ins. Ass. Co., 5 Pick. 34; Watson v. Emet, 1 Taunt 115; Flinn v. Tobin, Mood. & Walk., 367; Meres v. Ansell, 3 Wils. 275; Holmes v. C. M. F. Ins. Co., 10 Met. 211; Whitney v. Haven, 13 Mass. 172; Carpenter v. P. W. Ins. Co., 16 Pet. 495; Jennings v. C. C. M. Ins. Co., 2 Denio 75; Higginson v. Dale, 13 Mass. 96; Cockerill v. Cin. Ins. Co., 16 Ohio. 149; Gardner v. Piscat. Ins. Co., 38 Me. 439; Trask v. S. F. & M. Ins. Co., 29 Penn. St., 198.

There can be no estoppel in pais in behalf of one having full knowledge of all the facts. It applies only to facts.--Baker v. U. L. Ins. Co., 43 N. Y., 283; Lawrence v. Brown, 5 N. Y., 394; W. Ins. Co. v. Riker, 10 Mich. 279; S. Ins. Co. v. Fay, 22 Mich. 467; N. Y. C. Ins. Co. v. Watson, 23 Mich. 486; Am. Ins Co. v. Gilbert, 27 Mich. 429; Van Buren v. St. J. F. Ins. Co., 28 Mich. 398.

When the authority of an agent is limited by the contract which he makes with third parties, they cannot be protected by the plea that they had no notice of this limitation, or that the principal would be bound by the acts of the agent in excess of his authority.--22 Mich. 471; 6 Gray 173; 17 Mass. 29; Pars. on Cont., 5th Ed., 59, 61; Storey on Agency, §§ 127, 133; 22 Wend. 260.

Notice to an agent is notice to the principal only when the agent was acting within the scope of his authority.--Spandone v. Mansel, 2 Daly 263; Pendar v. Am. M. Ins. Co., 12 Cush. 469; Hale v. M. F. Ins. Co., 6 Gray 173; Sands v. Hill, 42 Barb. 659; Bank v. Lewis, 22 Pick. 243; Ang. on Corp., last ed., 312; Adams Eq., 322.

Norris, Blair & Stone, for defendants in error. It is the decided tendency of the modern cases to hold that if notice be duly given to the company or its agent, of the additional insurance, and no objection is made, the company will be estopped from insisting on a forfeiture of the policy because their consent was not endorsed as literally required by the stipulation.--May on Ins., § 370, et seq; Thompson v. St Louis Mut. L. Ins. Co., 2 Ins., L. J., 422; Heayward v. National Ins. Co., Ibid., 503; Horwitz v. E. M. Ins. Co., 40 Mo. 55; 42 Mo. 456; 43 Mo. 148; 47 Mo. 435; Viele v. Germania Ins. Co., 26 Iowa. 55; Walsh v. AEtna Life Ins. Co., 8 Bush 133; Peek v. New London, 22 Conn. 575; Hutton v. Beacon Ins. Co., 16 U. C., (Q. B.), 316, National F. Ins. Co. v. Crane, 16 Md. 260; and none of the Michigan decisions conflict with this rule, as applied to the facts of this case as found by the jury.--See 12 Mich. 124, 202; 16 Mich. 380; 19 Mich. 451; 21 Mich. 246; 22 Mich. 146, 473; 23 Mich. 487; 24 Mich. 117; 28 Mich. 174.

It must affirmatively appear in the record that the condition has been violated.--See Wash. F. Ins. Co. v. Davidson, 30 Md. 91.

OPINION

Campbell, J

This case, which has been in this court once before, is now presented under a somewhat different state of facts.

On the 8th of March, 1872, the Westchester Fire Insurance Company insured Earle & Reynolds to the amount of two thousand dollars on their fixed and movable machinery, situated in their wooden manufactory. A fire destroyed the insured property in January, 1873, during the original term of the insurance.

The policy contained two clauses which are regarded as important in this suit. One was: "If the assured shall have, or shall hereafter make any other insurance upon the property hereby insured, or any part thereof, without the consent of this company written hereon, then, and in every such case, this policy shall be void,"

The other was: "The use of general terms, or any thing less than a distinct specific agreement, clearly expressed and endorsed upon this policy, shall not be construed as a waiver of any printed or written condition or restriction therein."

There was inserted in the written part of the policy "$ 3,000 other insurance permitted." Insurance was effected, at or about the same time, in other companies, for the aggregate sum of three thousand dollars.

In May, 1872, additional machinery, being knitting machinery of the value of three thousand dollars, was put in the factory.

In June, 1872, the firm procured two thousand five hundred dollars further insurance in the American Central Insurance Company upon the entire machinery, new and old; and this was not preceded or followed by written consent of the Westchester Fire Insurance Company. This additional insurance is relied upon as a defense to the suit now before us, it being claimed that the original insurance policy was made void by the additional insurance, because the latter was not formally consented to.

It is claimed by Earle & Reynolds that the conduct of Mr. Atwater, the agent of the Westchester Fire Insurance Company, was such as to leave the policy in force, in spite of the failure to have consent for further insurance endorsed.

Upon most of the facts outside of the writings there is a conflict of testimony. Earle & Reynolds were sworn in their own behalf, and Atwater for the Westchester Fire Insurance Company; and the finding of the jury is in accordance with the testimony of the insured. The errors assigned refer to the rulings.

It is to be remarked that the consent actually inserted in the policy did not refer to insurance in particular companies, but allowed the three thousand dollars further insurance to be obtained anywhere. It must be assumed, therefore, that it was not designed to require consent to future insurance to be any more definite. In this respect the policy furnishes its own rule of construction.

It is also to be remarked that the circuit court charged the jury, at the request of the defendant below, that the mere fact that the agent Atwater did not dissent upon receiving knowledge or notice of the intention of plaintiffs below, would create no waiver or estoppel; and further, that it was not the duty of the insurance company, after such notice, to notify the insured that the additional insurance avoided the policy; and further, that the policy contemplated notice of the proposed additional insurance in advance; and that knowledge of the additional insurance would amount to no more than knowledge that the insured had voluntarily terminated the policy.

The court refused to charge that Atwater had no authority to waive the condition, or make assurances that it could be waived, except in the manner provided in the policy; or to charge that there were no sufficient facts proved to constitute a waiver or estoppel.

The charges given, under which the recovery was had, were in substance as follows: that in order to escape the condition the insured must show that the agent had done some act, or made some representation, or remained silent when he ought to have spoken, and thereby misled the insured, and induced them to rely on the policy to their injury, and by causing them to believe the policy remained in force, prevented their seeking other insurance; and that such conduct would preclude the company from setting up the condition; and that notice to the agent was notice to the company.

All the dealings in evidence were with Atwater, the agent at Grand Rapids, where the property was situated; and no other representative of the company took any steps before the fire.

The testimony for the insured went to show that the property insured was worth about twice the amount of the whole insurance. It further showed that the first application for further insurance was to Atwater, who said he would try and get it placed in some company of which he was agent, and that after waiting some time without his doing so, the risk was placed elsewhere. It is sworn that in this conversation Atwater said it would make no difference to the company, but did not say in so many words that it need not be consented to in writing, though that inference was drawn from all that took place. There seems also to have been some talk about terms, as that appears to have been one of the reasons for preferring the other insurers.

Immediately after the new insurance was obtained, Earle and Reynolds (according to their testimony) wrote a letter to Atwater, informing him of the precise amount of the additional insurance on the machinery, and stating in detail all the policies which they held, including the one in controversy, amounting with the new policy to seven thousand five hundred dollars, which they said was all they cared to insure on the machinery. In the same letter they asked for terms of insurance on the stock in the building. This letter is sworn to have been left in Atwater's office.

Very shortly thereafter Earle met Atwater, who at once referred to the new insurance, and asked why it had been placed with the other insurers and not with him, and was told it was because it was got on cheaper terms. In this and in following conversations about the same time, no objection was made, and no suggestion offered, that any breach of condition had been created, or would be relied upon. Atwater said he considered the risk of seven thousand five hundred dollars on the machinery then owned, as equivalent to the original five thousand dollars on what was owned before. No further objection was ever made, and proof of loss was made as required, to the adjusters.

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