Chicago Fire & Marine Ins. Co. v. Hyde Park C. Church

• Decision Date: 16 November 1929
• Docket Number: No. 8406,8407.,8406
• Parties: CHICAGO FIRE & MARINE INS. CO. OF CHICAGO, ILL., v. HYDE PARK CONGREGATIONAL CHURCH (two cases).
• Court: U.S. Court of Appeals — Eighth Circuit

35 F.2d 73 (1929)

CHICAGO FIRE & MARINE INS. CO. OF CHICAGO, ILL., v. HYDE PARK CONGREGATIONAL CHURCH (two cases).

Nos. 8406, 8407.

Circuit Court of Appeals, Eighth Circuit.

October 9, 1929.

Rehearing Denied November 16, 1929.

Harry C. Willson, of St. Louis, Mo. (Thomas O. Stokes, of St. Louis, Mo., on the brief), for appellant and plaintiff in error.

William Hilkerbaumer, of St. Louis, Mo. (John C. Robertson, of St. Louis, Mo., and Mercer Arnold, of Joplin, Mo., on the brief), for appellee and defendant in error.

Before KENYON and VAN VALKENBURGH, Circuit Judges.

VAN VALKENBURGH, Circuit Judge.

This case comes to us on both appeal and writ of error. We take the case on appeal, and the writ of error is dismissed.

This is a suit by the Hyde Park Congregational Church, of St. Louis, Mo., to recover against appellant on a policy of tornado insurance. This policy, in the sum of $5,000, was intended to take the place of a prior policy of insurance on the church property, issued by the Providence-Washington Insurance Company in May, 1927. The Schiele-Kleinschmidt Agency Company of St. Louis was agent for both insurance companies. There had been a small loss under the then existing policy. Mr. Schiele, of the agency company, took the amount of this loss to a Mr. Robertson, who appears to have been the church trustee with whom Mr. Schiele transacted this business. He told Mr. Robertson that the Providence-Washington Company would not care to continue its policy, unless the assured would increase the amount of tornado insurance more nearly to the value of the building. Mr. Robertson stated that the church could not afford to take out more insurance, whereupon Mr. Schiele told him that he would write the insurance in another company. He did not tell Mr. Robertson at what time he would rewrite the policy, nor in what company. This conversation took place on September 27 or 28, 1927. Mr. Schiele returned to his office and made the proper memorandum for his office force to write another policy for the same amount in the Chicago Fire & Marine Insurance Company, appellant herein. Miss Sylvia Schiele, daughter of Mr. Schiele, employed in the office of the agency company, testifies that on September 29, 1927, she found the memorandum made by her father for a policy in the Chicago Fire & Marine Insurance Company. The policy in suit was written that morning, and, together with the Providence-Washington policy, was placed on Mr. Schiele's desk. The latter policy had been brought to his office by Mr. Schiele for cancellation contemporaneously with the issuance of the new policy. Mr. Schiele did not see either policy prior to the luncheon hour.

While he was at luncheon on September 29th, at about 1 o'clock in the afternoon, a violent windstorm occurred, causing damage to the church in the sum of about $18,000. Mr. Schiele was immediately called into the devasted district, and did not return to his office until late that afternoon. He found over 300 losses reported in companies represented by his firm, and so, as he says, he did not get to his regular desk work until later. On September 30th, or October 1st, he found the policy in suit lying on his desk for signature, and he then signed it as it was written. It was dated September 29th. The policy was subsequently delivered to the trustees of the church, together with a credit memorandum for premium upon the unexpired Providence-Washington policy; this latter memorandum the trustees of the church refused at that time to accept, desiring to hold the one company or the other; subsequently suit was brought against both. At that time the Providence-Washington policy had not been canceled. Mr. Schiele says that he did not cancel it, because he wished to protect whatever rights properly belonged to the insured. Some months later this policy was returned to the Providence-Washington Company in Chicago. It was stated at the hearing in this court that the suit against that company had since been dismissed.

The policy in suit provided expressly that it should not take effect until countersigned by the local agent. According to the testimony of Schiele and his daughter, and there is nothing in the record to the contrary, it was not countersigned, and, therefore, did not become effective by its terms, until after the damage accrued. Appellant filed answer denying liability, alleging that its policy of insurance did not become effective prior to the loss. At the trial a jury was waived, and there was a partial stipulation as to facts. The testimony of Schiele, and of his daughter, by whom the policy was written, as to the time when the policy was countersigned, was stipulated subject to objection. The objection made was that this testimony tended to vary the terms of a written contract, and was therefore incompetent. The trial court ultimately so ruled, and rendered judgment for appellee.

This appeal raises two questions: First, it is appellant's contention that its policy was to be issued only as a substitute for the Providence-Washington policy, and that there should be no liability on its part unless there was a valid cancellation of the latter policy prior to the tornado; second, appellant's policy provides that it should not be valid until countersigned by the duly authorized agent of the company at St. Louis. The question is whether it can be shown by parol testimony that it was not actually countersigned until after September 29th.

The answer to the first of these questions is somewhat in doubt. It does not expressly appear from the testimony that appellant's policy was to be issued and to become effective only in case the other policy was canceled. It would appear, however that the Providence-Washington policy should remain in force at least until the substitution took place, and it was clearly the understanding that the insurance was not to be increased; consequently, but one policy, in contemplation of the parties, was to be in force at the same time. As has been said, the Providence-Washington policy was not canceled at that time. The fact that it has since been canceled, and that the suit against it has been dismissed, can have no effect upon the rights of the appellant in this case. Kerr v. Milwaukee Mechanics' Ins. Co. (C. C. A. 8) 117 F. 442; Waterloo Lumber Co. v. Des Moines Ins. Co., 158 Iowa, 563, 138 N. W. 504, 51 L. R. A. (N. S.) 539; Clark v. Insurance Co., 89 Me. 26, 35 A. 1008, 35 L. R. A. 276.

The appellee in this case argues: That a resident agent may bind his principal by an oral contract of insurance. Corrigan v. National Motor Underwriters (Mo. App.) 1 S. W.(2d) 845. That, where there is an agreement to insure for a definite period and the premium is paid, a contract may be...