Agricultural Insurance Co. of New York v. Anderson

• Decision Date: 23 June 1919
• Docket Number: 20777
• Citation: 82 So. 146,120 Miss. 278
• Court: Mississippi Supreme Court
• Parties: AGRICULTURAL INSURANCE CO. OF NEW YORK v. ANDERSON

82 So. 146

120 Miss. 278

AGRICULTURAL INSURANCE CO. OF NEW YORK v. ANDERSON

No. 20777

Supreme Court of Mississippi

June 23, 1919

March 1919

Division A

1 INSURANCE. Reformation of policy. Mistake. Location of property insured.

Where the agent of the insurance company, under instructions from insured to locate his cotton and insure it at the place where it was found, having independently investigated its location and insured it as being in brick compartments, when in fact the cotton was in frame sheds, where fire afterwards destroyed it. In such case the policy will be reformed as for mutual mistake and recovery had thereon by insured.

2 SAME.

In such case the insurer is estopped to deny that the cotton insured although described in the policy as being located in brick compartments was in fact the cotton which was intended by both parties to be insured.

HON. LAMAR F. EASTERLING, Chancellor.

APPEAL from the chancery court of Hinds county, HON. LAMAR F. EASTERLING, Chancellor.

Suit by Mrs. A. C. Anderson against the Agricultural Insurance Company of New York. From a decree for complainant, defendant appeals.

The facts are fully stated in the opinion of the court.

Judgment affirmed.

McLaurin & Arminstead, for appellant.

The doctrine of estoppel has no place here. We submit that the jurisdiction of a chancery court to reform a policy cannot be invoked on the equity ground of reformation when there is no ground for such reformation, and then undertake to recover on a separate and distinct ground applicable to legal actions purely. Estoppel in an insurance contract applies only to policies which have once attached, like waiver. The doctrine of waiver, and the doctrine of estoppel are closely akin, and they only apply in those cases where a policy has once attached and is sought to be avoided by a breach of some affirmative or promissory warranty in the policy, and the reply is made that the forfeiture does not operate on account of some waiver or estoppel on the part of the insurance company, or its representative. The pending case is a case where the evidence shows that the policy never did attach, because of the fact that the request of the appellee's agent, Mayfield and Buck, was to insure the cotton in the brick compartments of the Tallahatchie Compress Company and no cotton was there. Therefore, the policy as written covered nothing, and was void by reason of the fact that there was no cotton in the location on which the policy was written. See 3 Cooley's Brief on Insurance, p. 2460; Artick v. Ins. Co., 131 F. 13, affirmed 198 U.S. 583; Ins. Co. v. Walff, 95 U.S. 326.

If the evidence in the case would not warrant a reformation of the policy, which counsel for appellee seems to admit, as they do not discuss our authorities as to what is necessary to obtain a reformation of the policy, but dispose of them as if with a wave of the hand by saying that they announce general rules of reformation; if the appellee is not entitled to a reformation of the policy, then no possible estoppel can arise; it is an entire misconception to insist that an estoppel can arise on a void policy. If the policy is void for any reason it never attached, and no estoppel or waiver could ever bring to life a void policy.

Counsel's efforts to weave an estoppel into his case is non sequiter and has no place in this case from any view. We rest the case on the absolute failure to make the necessary proof entitling the appellee to a reformation on the authorities cited in our original brief.

On the question of an estoppel arising against the insurance company to claim that this policy is void by reason of the fact that it never attached, that there was no property on which it covered in the location described, or that it was issued at the suggestion of an agent who has claimed to represent both the assured and the company, then no kind of estoppel could ever put life in such a policy.

The citation of the case of Insurance Company v. Antram, 86 Miss. 224, by appellee, is most unfortunate for appellee. On page 230 in the opinion in this case, Judge TRULY, speaking for the court laid down two distinct propositions. First: "That a void policy could not be waived into existence by waiver or estoppel; second: "That where the agent remits to the company the premium due and credits the assured, and after wards receives from the assured the premium the agent has previously paid, that it is a mere private indebtedness due the agent as an individual and could not by operation of law or by force of any adjudication of this court constitute a waiver on the part of the company, even conceding that at the time of such payment both the adjuster and the agent had full knowledge of all the facts of the case, and of all the circumstances surrounding the fire, and the representations by which the issuance of the policy was procured. Such a doctrine would be to place the premium on fraud, and to encourage unscrupulous persons to procure by corrupt practices the issuance of policies, and then, should loss occur before their fraud became known, to protect themselves by inducing the agent then to accept the premium."

All of the foregoing quotations from the opinion of the court in the Antram case was omitted by counsel for appellee in their reference to this case, on page fifty-seven of appellee's brief.

If, therefore, the policy was void by reason of the double agency or by reason of the fact that there was no property in the location that the policy covered, it ends this case, and it is perfectly idle to be taking up the time of the court by short extracts from cases selected out of the Digest, where no facts are given to the court to show what was before the court in the respective cases cited from their jurisdiction.

Indeed it is useless for the court to go to the trouble of seeking authorities outside of the state of Mississippi to decide this case, as the authorities of this state settled the question involved in this record beyond all controversy. No cases cited by counsel in appellee's brief apply to this case, for the reason that a total misconception seems to have arisen in the preparation of appellee's brief, in failing to draw a distinction between a policy that never had attached, and a policy that once did attach but was subsequently breached and a forfeiture was claimed and the plaintiff replied that the forfeiture was waived or the company estopped to claim such forfeiture. We ask the court to carefully observe this distinction in the case, and we confidently believe that no authority can be found, as counsel cites none, whereby a void policy which never did attach can ever be waived into existence, or that the company can be estopped from insisting that the policy is void by any claim of estoppel. The burden of appellee's contention is viewed from the standpoint that the policy once attached and the company was estopped to set up a forfeiture.

No such case is presented in this record at all, and therefore we insist that the authorities cited by counsel for appellee do not touch this case in any view. This record does not present a case where the insurance agent examined the property before the policy was issued and acted on his own information, as was decided in the case of Insurance Company v. Holmes, 75 Miss. 390.

It has no resemblance whatever to the case of Mitchell v. Aetna Insurance Company, 71 So. where an inventory was presented by the assured to the agent before the policy was issued, which inventory the agent approved and issued the policy, and after the fire, undertook to claim that the inventory was not intemized.

It is not a case like the Scottish Union & National Insurance Company v. Wiley, 110 Miss. 680, where the agent knew about the condition of the property before the policy was issued, and with that knowledge issued and delivered the policy.

All these cases cited from the Mississippi supreme court by counsel, as well as the other cases from other courts, failed to recognize the distinction we are discussing between a policy that never attached and a policy that did attach, but was afterwards breached and the company held liable because its representative had done something that prevented them from insisting on the breach.

This is not a case where any application was prepared by the insurance agent and incorrect answers given to questions and the policy afterwards issued and contested on the ground that the answers were incorrect. The supreme court of Mississippi long ago in the case of Planters Insurance Company v. Myers, 55 Miss. 479, settled the law in this state that where the answers were improperly written down by the agent, the assured was not bound. On page 507, in this case in the opinion of the court, the court said: "The underwriter was entitled to full disclosure, not merely to know the truth but the whole truth; the withholding of any facts material to the risk is tantamount to a false representation, and visited with the same penalty." (The avoidance of the policy.)

So from this case the court will see that it is not the duty of an insurance agent to go over ten or twelve thousand bales of cotton to see if the appellee's cotton was in the lot and where it is as seriously insisted in this case that Mr. Steele agreed to locate the cotton and insure it.

Counsel for appellee has reasoned himself into a strange situation. He has evidently taken the Digest and abandoned the Mississippi cases applicable to the facts in this case, and undertaken to hunt up some view on which he can hope to bind this company, and he cited authorities to show: First: That if the agent of the company acts on his own knowledge and issues a policy which is a valid policy and attached to the risk, he cannot claim to...