Anderson v. Manchester Fire Assur. Co.
| Decision Date | 20 November 1894 |
| Docket Number | No. 8972.,8972. |
| Citation | 59 Minn. 182 |
| Parties | MATT ANDERSON <I>vs.</I> MANCHESTER FIRE ASSURANCE CO. |
| Court | Minnesota Supreme Court |
term of one year next ensuing against all direct loss or damage by fire to the amount of $800 on his two story frame building situated on lot No. 24 in block No. 18 in the village of Virginia, Minn. The policy was in the form and contained the provisions prescribed by the Insurance Commissioner under Laws 1889, ch. 217. The provisions material to the question involved, are set out in the opinion of the Chief Justice. The building was worth $1,500 and was on June 18, 1893, totally destroyed by fire. When this policy was issued there was other insurance on the building to the amount of $500. This fact was known to defendant's soliciting agent when he made and delivered the policy to plaintiff, but no consent thereto or notice thereof is written in or upon the policy. Plaintiff was foreign born and cannot read or write English, and can converse in English only imperfectly. He did not know or have notice that the policy contained the provisions set out in the opinion. Notice of the fire was given and proofs of loss were made and served. The defendant refused to pay the insurance and this action was brought to recover the amount. The defendant relied on the condition against other insurance claiming it was not waived by any person having authority to waive it, that Laws 1889, ch. 217, and the action of the Insurance Commissioner in prescribing the form of policy thereunder had superseded Lamberton v. Connecticut Fire Ins. Co., 39 Minn. 129. The trial court held otherwise and adhered to that decision. Defendant excepted. The jury returned a verdict for plaintiff. A motion for a new trial was denied and defendant appeals.
S. T. & Wm. Harrison, for appellant.
Jno. Jenswold, Jr., for respondent.
S. T. & Wm. Harrison, Kitchel Cohen & Shaw, for appellant.
COPYRIGHT MATERIAL OMITTED
Bunn & Hadley, also for respondent.
May 9, 1893, the defendant, by a Minnesota standard policy, insured a building of plaintiff against loss or damage by fire for one year, and June 18th the building was destroyed by fire. At the time of and prior to the issuance of the policy, the plaintiff had other insurance on the building, to the amount of $500.
The policy of defendant (the standard policy) contains this condition: "This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void if the insured now has, or shall hereafter make or procure, other contract of insurance, whether valid or not, on property covered in whole or in part by this policy," — and this further condition: "And no officer, agent, or 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 indorsed hereon or added hereto; 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 provision or condition unless such waiver, if any, shall be written upon or attached hereto." There was no indorsement on the policy referring in any way to the other and previous insurance.
The only question in the case is, could an agent of the defendant, notwithstanding the last above quoted condition, waive by parol, and without indorsing on the policy, the condition as to other insurance?
In Lamberton v. Connecticut Fire Ins. Co., 39 Minn. 129, (39 N. W. 76,) the court passed upon a condition similar to the condition last above quoted, and held it to be not an attempt to limit or restrict the power of any particular agent or class of agents, but to disable one of the parties to make, even with the consent of the other, an agreement that would otherwise be valid; and the court said: "A contracting party cannot so tie his own hands, so restrict his own legal capacity for future action, that he has not the power, even with the assent of the other party, to bind or obligate himself by his further action or agreement contrary to the terms of the written contract." The court decided, in effect, that such a condition was nugatory; that the parties could not bind themselves by any such condition.
The defendant claims that Laws 1889, ch. 217, providing for a uniform policy of fire insurance, to be known as the "Minnesota Standard Policy," changed the rule of law in that particular; and that, by requiring the standard policy to be used, the act not only enables, but enjoins, the parties to bind themselves by the terms, provisions, and conditions contained in it.
No other question on that act is suggested by either party, either as to its validity or construction in any particular, except as above stated; and we will pass on nothing but the point thus made as applying to the condition last above quoted.
The standard policy was, under the act, prepared by the Insurance Commissioner, with the assistance of the Attorney General. Its use by insurance companies doing business in this state is made compulsory. The courts must, when called on, interpret it and its various provisions and conditions, and generally by the same rules as though the form of policy were voluntarily adopted by the parties. But in respect to the power of the parties to insert the provisions and conditions that are contained in the standard policy, and the binding effect of them, the act is conclusive; for it would be absurd to say that, while the statute compels the use of a particular condition, the parties cannot or shall not bind themselves by it, but it may be nugatory. By requiring the condition to be inserted, the statute certainly enables the parties to make the condition. It follows that the conditions quoted are valid and binding. In respect to the power of the parties to bind themselves by such conditions, the act changes the rule in the Lamberton Case.
Order reversed.
I cannot agree to the foregoing opinion, for reasons that I will state. The questions involved in this decision are of very great importance to the people of this state, as well as to the insurance companies. By Laws 1889, ch. 217, the legislature, under the guise of reform, enacted a most extraordinary law. It provides that the Insurance Commissioner, within sixty days after the passage of that act, shall prepare and file in his office "a printed form in blank of a contract or policy of fire insurance, together with such provisions, agreements or conditions as may be endorsed thereon or added thereto and form a part of such contract or policy, and such form when so filed shall be known and designated as the Minnesota standard policy." It further provides that he shall call upon the Attorney General for such assistance as to him may seem necessary in the preparation of the policy. It further provides that all fire insurance contracts made after June 1, 1890, shall conform in all particulars as to provisions, agreements, and conditions to this printed form.
It further provides that printed or written forms of description, "or any other matter necessary to clearly express all the facts and conditions of insurance on any particular risk (which facts or conditions shall in no case be inconsistent with, or a waiver of any of the provisions or conditions of the standard policy herein provided for), may be written upon or attached or appended to any policy issued on property in this state."
If these provisions mean anything, they mean that every condition in such standard form which will allow the insurance company to escape liability must be inserted in every insurance policy issued, and, when so inserted, it cannot be waived by any power on earth, but absolutely protects insurance companies in taking advantage of every technical violation for the purpose of evading payment of losses, and under no circumstances can the company waive or forgive any such technical violation.
Within sixty days after the passage of this act the insurance commissioner did prepare and file the Minnesota standard policy, which contains at least thirty five conditions, the violation of any one of which will forfeit the policy.
Any one familiar with insurance law can readily understand that one such forfeiture clause, protected from the doctrine of waiver as heretofore applied by the courts, will render void more policies than a dozen such clauses to which such doctrine of waiver is applied; and, if this statute and standard policy is the law of this state, then not one insurance loss in ten which the insurer sees fit to refuse to pay can be collected.
By the law of waiver, the party to a contract who would enforce an act of forfeiture committed by the other party must do no act recognizing the contract as still in force after he learns of the forfeiture. If he does, he waives the forfeiture. This rule applies as well to forfeiture clauses in leases, deeds, and other contracts as it does to those in insurance policies.
If this statute is constitutional, the decision of the majority is right. But it seems to me that the constitutionality of this statute is very questionable. Is it not an attempt to delegate legislative power to the insurance commissioner? If the legislature can thus delegate to an individual the power to prescribe what provisions shall, and what provisions shall not, be inserted in an insurance contract, why can they not in the same manner delegate the power to prescribe what provisions shall, and what provisions...
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