Cannon v. Home Ins. Co. of N.Y.

• Decision Date: 13 December 1881
• Citation: 53 Wis. 585,11 N.W. 11
• Parties: CANNON v. HOME INS. CO. OF NEW YORK.
• Court: Wisconsin Supreme Court

53 Wis. 585

11 N.W. 11

CANNON

v.HOME INS. CO. OF NEW YORK.

Supreme Court of Wisconsin.

Filed December 13, 1881.

Appeal from circuit court Waupaca county.

Barnes & Goodland, for respondent.

Finches, Lynde & Miller, for appellant.

COLE, C. J.

One or two preliminary questions must be noticed before we come to the real defence in this case. It is objected that the court below erred in admitting evidence under the complaint. The specific objection is that the complaint shows on its face that the contract sued on is one of guaranty; and it does not appear that the defendant was authorized, under its charter, to make such a contract. The facts stated show clearly an original undertaking on the part of the defendant; or, in other words, sets forth a contract of reinsurance. About this, it seems to us, there can be no doubt. But it is further objected that it is not alleged that proofs of loss were duly and timely served upon the defendant. A reference to the complaint will show that this point is untenable. Again, it is insisted that the court erred in allowing the plaintiff to testify, against objection, as to the statements or declarations made to him by Pope, the local agent of the defendant. These statements were made by the agent before the loss, and were, in substance, that the defendant company had assumed the risks, in this state, of the Roger Williams Insurance Company, (of which the plaintiff's was one;) that the defendant company was sound, and plaintiff's insurance was all right and would be renewed when it expired, should the plaintiff so desire. The object of this testimony was doubtless to show that the defendant had assured the risks of the Roger Williams Company, and was therefore liable to the plaintiff on his policy issued by that company. But the testimony was entirely harmless, in view of the fact that the defendant company, by its agents, always admitted that it had assumed the risks of the Roger Williams Company, and was liable for all legal claims under policies issued by that company. That was really not a controverted fact in the case.

The real defence to the action was that the plaintiff had obtained a subsequent insurance without the consent of the Roger Williams Company, in violation of an express condition in that policy; consequently that policy was avoided, and the defendant was not liable for the loss upon it. But it is claimed by the plaintiff's counsel that this question is not in the case, because, as he insists, no such ground of defence was set up in the answer, as it should have been, to render it available. It is certainly true that the answer does not rely upon a breach of the conditions relative to subsequent insurance; and it is very questionable whether that defence was open to it. Redman v. Ætna Ins. Co. 49 Wis. 431. This was a special defence, and, we are inclined to think, should have been distinctly set up in the answer in order to allow evidence of it. But, without expressly deciding the point, we pass to a consideration of the question whether the defendant was in a position to take advantage of the breach in regard to subsequent insurance and insist upon a forfeiture on that ground. The insured property was destroyed on the twenty-eighth of October, 1879. The witness Hall testified that he was the state adjuster of the defendant when he visited New London, where the insured property was situated, on the thirteenth of February, 1880. He says: “I saw the plaintiff and had a conversation with him at that time. I had knowledge that Cannon had additional insurance on the property in the Phenix Insurance Company of Brooklyn. I ascertained that fact at the time, by seeing the policy. I am not quite certain whether I had been informed of it by correspondence or not. I ascertained it then, at all events, if not before. I examined that policy and the policy of the Roger Williams, and I reported the fact to Mr. Durand of the additional insurance. I made that report to him within two or three days after I saw the policy.”

So it will be seen that the defendant had full knowledge of the subsequent insurance in February, 1880. On the fifth of April following, Barnes & Goodland, as attorneys of the plaintiff, addressed a letter to Ducat & Lyon, managers of the defendant at Chicago, saying their client had put in their hands for collection a claim arising out of policy No. 6,117, issued by the Roger Williams Insurance Company, which it seemed was reinsured in the Home Company. They say: “Before taking any steps, we desire to know what the position of your company is in relation to the claim, and will add, if possible, we prefer to settle the same without litigation.” To this communication, Mr. Durand, the general adjuster of the defendant for the western department, replied on the 10th, saying: “We do not understand what J. H. Cannon bases his claim against us or the Roger Williams Insurance Company on, as we have never received any proofs of loss; neither has the Roger Williams Insurance Company. Now, if Mr. Cannon has a fair and legal claim for loss under the Roger Williams Insurance Company policy No. 6,117, he should make out such proofs as the policy requires, and send same here; and, on receipt of same, the claim shall be investigated at once, and you shall be promptly advised of our views of same. If any question shall then arise touching the same, we think you and we can adjust it without anybody's interference.”

Thereupon the plaintiff proceeded and made out proofs of loss at an expense of $25, paid his attorneys, besides loss of time and some personal expense incurred in traveling, and sent them to Mr. Durand on the twenty-ninth of April. On the third of May, Mr. Durand, in a letter to Barnes & Goodland, acknowledged the receipt of proofs of loss, and says: “It appears that Mr. Cannon obtained a subsequent policy in the Phœnix Insurance Company on the same property without the consent of the Roger Williams Insurance Company, in violation of an express condition in their policy, and which rendered the same void. There are, however, two items in the Roger Williams policy, that may not have been covered by the Phœnix policy, which we will pay by way of compromise, though not liable for them.” Then follows quite a lengthy correspondence (which was put in evidence) between Messrs. Barnes & Goodland on the one side, and Mr. Durand and the firm of Finches, Lynde & Miller on the other, as to the liability of the defendant for the loss. The plaintiff's attorney insisted in the correspondence, as they now insist, that the defendant was liable, because, with full knowledge of the additional insursurance, it elected to treat the policy as still in force,--as it was claimed it did by the letter of Mr. Durand of April 10th,--and thereby had waived the breach of the condition in that regard. The proposition upon which counsel rely is this: that a party cannot occupy inconsistent grounds or positions; that one who relies upon the forfeiture of a contract cannot, at the same time, treat the contract as an existing, valid one, nor call upon the other party to the contract to do anything required by it. Or, to apply the proposition to the precise facts in the case, that as the defendant, in its correspondence with the attorneys of the plaintiff, after full knowledge of the forfeiture, saw fit to call for additional proofs of loss, recognizing by this act the continued validity of the policy, it could not, after the plaintiff had gone to the expense and trouble of furnishing these proofs, change its ground and claim that the policy was no longer in force.

We think this position is sound in law and amply sustained by the doctrine of the adjudged cases. The cases of Webster v. Phœnix Ins. Co. 36 Wis. 67;N. W. M. L. Ins. Co. v. Germania F. Ins. Co. ...