Commercial Union Assur. Co. v. State ex rel. Smith

• Decision Date: 17 February 1888
• Citation: 113 Ind. 331,15 N.E. 518
• Parties: Commercial Union Assur. Co. v. State ex rel. Smith et al.
• Court: Indiana Supreme Court

113 Ind. 331

15 N.E. 518

Commercial Union Assur. Co.

v. State ex rel.Smith et al.

Supreme Court of Indiana.

February 17, 1888.

Appeal from circuit court, Henry county; Mark E. Forkner, Judge.

Action by the state on the relation of Smith and others, trustees of the Soldiers' Orphans' Home, on a contract of insurance on the building used as such home, issued by the defendant insurance company. The plaintiffs recovered judgment, and defendant appeals.Logan & Slattery and Brown & Warner, for appellant. Mellett & Bundy, Cambern & Newkirk, and Smith & Henley, for appellees.

Elliott, J.

There are three paragraphs of the complaint, but there is no substantial difference between them. They are all based upon a contract of insurance. A single objection is made to the third paragraph, and that is that it does not aver that the plaintiff furnished the defendant with preliminary proofs of loss. The complaint does aver, however, that the relators performed all the conditions of the contract on their part, and this is sufficient. If a plaintiff so elects, he may specifically plead a performance of the conditions, and if he does elect to do this, he is bound to specifically aver full performance; he is not, however, bound to pursue this course, for he may plead generally that he has performed all the conditions on his part, and if he does do this, his complaint will be good. Insurance Co. v. Duke, 43 Ind. 418.

The material facts established by the evidence are these: From August, 1883, until August 22, 1885, the appellant, a foreign insurance company, was doing business in this state. Its representative at Newcastle was Robert M. Nixon. The trustees of the Soldiers' Orphans' Home, the relators in this case, applied to Nixon through one of their number, for an insurance on the building under their control. Nixon at the time represented several other companies, and in four of these obtained policies for the relators. Subsequently one of these companies, the Home Insurance Company of New York, declined the risk, and notified Nixon to cancel the policy. Nixon notified the relators, and the policy was surrendered and canceled. The relators did not demand a return of the premium, but agreed with Nixon that he should obtain insurance in some other company for the time remaining after the cancellation of the policy issued by the Home Insurance Company, and for that purpose he retained so much of the premium as had not been paid over to that company. On the 24th day of July, 1885, Nixon, as the agent of the appellant, selected it as the company in which to insure the relator's property until the 12th day of April, 1887. On the day first named he entered upon the policy register of the appellant, in his possession as its agent, the following:

+---------------------------------------------------------------------------------+
                ¦       ¦            ¦       ¦Commence't of    ¦                 ¦Am't    ¦Am't   ¦
                ¦       ¦            ¦       ¦risk.            ¦                 ¦insured.¦Prem'm.¦
                +-------+------------+-------+-----------------+-----------------+--------+-------¦
                ¦No.    ¦Name and    ¦       ¦    ¦      ¦     ¦    ¦      ¦     ¦        ¦       ¦
                ¦Policy.¦residence of¦Term.  ¦Day.¦Month.¦Year.¦Day.¦Month.¦Year.¦5,00    ¦       ¦
                ¦       ¦assured.    ¦       ¦    ¦      ¦     ¦    ¦      ¦     ¦        ¦       ¦
                +-------+------------+-------+----+------+-----+----+------+-----+--------+-------¦
                ¦       ¦Trustees    ¦       ¦    ¦      ¦     ¦    ¦      ¦     ¦        ¦       ¦
                ¦       ¦Indiana     ¦       ¦    ¦      ¦     ¦    ¦      ¦     ¦--------¦       ¦
                ¦       ¦Soldiers'   ¦21     ¦    ¦      ¦     ¦    ¦      ¦     ¦--------¦       ¦
                ¦100,041¦and Orphans'¦months.¦12  ¦July  ¦1885 ¦12  ¦April ¦1887 ¦Rate, 1 ¦29.17  ¦
                ¦       ¦Home,       ¦       ¦    ¦      ¦     ¦    ¦      ¦     ¦per     ¦       ¦
                ¦       ¦Knightstown,¦       ¦    ¦      ¦     ¦    ¦      ¦     ¦cent.   ¦       ¦
                ¦       ¦Indiana.    ¦       ¦    ¦      ¦     ¦    ¦      ¦     ¦        ¦       ¦
                +---------------------------------------------------------------------------------+
                

“Five thousand dollars for three years upon their three-story brick building, with slate roof, occupied as an asylum for feeble-minded children, and as a soldiers' orphans' home, situated entirely detached on Soldiers' Home Farm, in Rush county, Indiana, one and a half miles south of Knightstown, Indiana. Said building is heated by steam from boilers situated sixty feet north of building and below surface of ground, and is to be lighted by gas-machine, the tank for which is to be forty feet from the building and seven feet under ground. Permitted to place $25,000 additional concurrent insurance. Permitted to light the building with coal-oil lamps until gas-machine is ready, if lamps are filled and trimmed by daylight only.”

On the same day he made his daily report of the risk to the resident secretary of the company, at Cincinnati, Ohio, signing it as the agent of the company. In this report he gave the number of the policy, the amount of the risk, and the rate. He also gave a copy of the written part of the policy and the questions and answers usually propounded to and received from agents. His report also contained this statement: “This risk begins to-day, July 24, 1885. It also dates July 12, 1885, to make it expire (with the other insurance placed by me) April 12, 1887,-twenty-one even months.” Accompanying the report was a letter in which the number, the amount of the policy, the amount of other insurance, and other information was given the company. An incomplete policy of insurance was also read in evidence, but there was no delivery of it to the relators. It was retained by Nixon with the other policies. On the daily report of Nixon the following indorsements were made at Cincinnati: “Asylum for Feeble-Minded Children, undesirable. Canceled. Rate too low. 25-7-'85.” The letter and report of Nixon were received at Cincinnati on the 25th day of July, 1885. Letters were written to Nixon July 25th, August 10th, and August 20th. A cancellation mark was also placed on the policy at Cincinnati. None of these letters were answered. In each of them was a direction to Nixon to obtain a better rate, or take up or cancel the policies. On the 22d of August, 1885, the company sent a special agent to Newcastle to examine into the affairs of the agency at that place. The special agent discharged Nixon, took the policy in favor of relators from his possession, and sent it to Cincinnati to be canceled. The trustee, who had the management of the business of procuring insurance, was notified of the refusal of the appellant to carry the risk, but this notice was not given him until after his removal from office, and after the company's agent had knowledge of that fact. No notice was given to any other trustee. The building which the contract of insurance described was totally destroyed by fire on the 21st day of July, 1886. On the 7th day of August of that year one of the trustees took with him sworn proofs of the loss, and delivered them to John W. Eggleston, then in charge of the office of the resident secretary at Cincinnati. Subsequently this trustee met Mr. Holman, the resident secretary, and the latter asked him to withdraw the proof, saying that, as there was no liability of the company, he did not want to consider the proofs of loss. At another time, and while on a visit to this state, the resident secretary also denied that there was any liability on the part of his company. On the 5th day of October, 1886, written objections to the proofs of loss were delivered to the relators.

There was a waiver of objections to the proofs of loss. Where proofs are delivered to the agent of an insurance company, and he denies the validity of the contract, or asserts that the policy has been canceled, there is a waiver of objections to the proofs furnished. There is, indeed, in such cases, a complete waiver of proof. Insurance Co. v. Shryer, 85 Ind. 362, and cases cited; Insurance Co. v. Capehart, 108 Ind. 270, 8 N. E. Rep. 285; Insurance Co. v. Crutchfield, 108 Ind. 518, 9 N. E. Rep. 458; Insurance Co. v. Erb, 1 Atl. Rep. 571;King v. Insurance Co., 17 N. W. Rep. 297;O'Brien v. Insurance Co., Id. 726; Taylor v. Insurance Co., 9 How. 391.

Nixon was the agent of the company, and not of the relators. This, we think, both the contracting parties must have clearly understood. At all ovents, there can be no doubt that the appellant treated him as its agent from the time of his employment until his final discharge. We assume, as clearly proved, the fact that he was the agent of the company, and that he was so regarded by its officers, and we think that the evidence fully justified the inference that the relators dealt with him as the appellant's agent. He was made the agent of the company by written appointment, and as such he acted, so that the natural inference is that the relators did not deal with him as their own agent, but as the agent of the companies which issued the policies of insurance. The mere fact that one of the trustees agreed with Nixon that he should place the insurance did not make him the agent of the board, for the agreement was with him as an insurance agent, and in that representative capacity. Such agreements, courts judicially know, are usually made with insurance agents in their representative capacity, and what the agent does is done as the representative of the company, and not as the agent of the applicant for insurance. The services he performs in connection with the contract of insurance he performs as the agent of the company. This is essentially so where, as here, the principal is a foreign insurance corporation. The case of Insurance Co. v. Allen, 109 Ind. 273, 10 N. E. Rep. 85, illustrates the principle on which we proceed. There the agent inserted a false description in the application, and it was held that the company was bound by his act. The...