Cont'l Ins. Co. v. Ruckman

• Decision Date: 26 January 1889
• Citation: 20 N.E. 77,127 Ill. 364
• Parties: CONTINENTAL INS. CO. v. RUCKMAN.
• Court: Illinois Supreme Court

127 Ill. 364

20 N.E. 77

CONTINENTAL INS. CO.

v.RUCKMAN.

Supreme Court of Illinois.

January 26, 1889.

Appeal from appellate court, Fourth district.

Baker, McNulty & Baker

, for appellant.

Wise & Davis, for appellee.

BAILEY, J.

This was a bill in chancery, brought by Stephen Ruckman against the Continental Insurance Company of the City of New York, praying for the reformation of a policy of insurance, and for a decree for the amount of the complainant's loss and damage by fire to the property insured. The policy in question bore date March 24, 1884, and insured the complainant, for the term of three years, against loss or damage by fire, in the sum of $400, on his one-story, frame, shingle-roof dwelling-house, and $600 on his log barn, situate in St. Charles county, Mo.

The following facts, shown by the complainant's evidence, are in no way contradicted:

The policy was obtained by the complainant from the defendant through the agency of one Milne, an employe of Whipple & Smiley, the defendant's local agents at Alton, Ill. On the day next prior to the date of the policy Milne came to the complainant at his place in St. Charles county, Mo., and solicited said insurance. The complainant expressed a willingness to take out a policy on said buildings, but told Milne that he expected to have them rented, and that sometimes they might be vacant 5, 10, or 15 days, and asked him if that would make any difference with the insurance. Milne assured him that, if they did not remain vacant to exceed 30 days, the insurance would not be affected, and agreed that the policy should so provide; but that, if the vacancy should continue for a longer period, it would be necessary for the complainant to notify the company, and get a permit for a further period of 30 days. On these terms the complainant agreed to take the policy. The next day he went to the office of Whipple & Smiley for the policy, and found Milne there alone, no other person being in the office. Milne thereupon took a blank policy, filled it up, and delivered it to the complainant, and received from him the premium. The complainant is an illiterate man, not being able to read or write, and that fact was known to Milne at the time he filled up and delivered the policy. On receiving it, the complainant asked Milne whether the clause in relation to the vacancy of the buildings was in it, and was told by him that it was, and the complainant had no knowledge that the contrary was the fact until after the destruction of the buildings by fire.

In point of fact, the condition agreed upon was not in the policy, but among its conditions was one providing that, if the buildings insured became unoccupied without the consent of the company indorsed thereon, the policy should be void. A tenant who went into possession March 1, 1885, continued to occupy the premises, using the house for a dwelling, and the barn for keeping therein his domestic animals, his hay, and other personal property, until October 21, 1886, at which date he moved out of the house, leaving it unoccupied, and moved into another house about a quarter of a mile distant therefrom. On the 1st day of November, 1886, the house and barn were both destroyed by fire, the house at that time remaining unoccupied; the former tenant, however, still retaining the key to the barn, which he kept locked, and having therein a load of hay, a hay frame, 12 bushels of potatoes, and some lumber. Proofs of loss were furnished by the complainant to the insurance company, showing that the house was unoccupied at the date of the loss, and the defendant thereupon refused to pay the loss; basing its refusal upon the alleged breach of the condition of the policy relating to the occupancy of the buildings.

The cause was heard on pleadings and proofs, and a decree rendered reforming the policy by inserting therein a provision that the buildings insured might remain vacant and unoccupied 30 days, but no longer, without notice to the defendant; and also decreeing that the defendant pay the complainant, within 10 days, the sum of $1,049.50, with legal interest thereon from the date of the decree, together with costs of suit, and that, in default of such payment, execution issue therefor. From this decree the defendant appealed to the appellate court, where said decree was affirmed, and by a further appeal the defendant has brought the record to this court.

It is urged, as a ground for the reversal of the decree, that the complainant failed to perform the condition of the policy in relation to preliminary proofs of loss. It is not disputed that proofs were served, consisting of a statement in relation to the circumstances of the loss made by the complainant under oath, and a certificate by a justice of the peace residing in the vicinity of the buildings destroyed. It may be that these proofs failed in some particulars to answer all the requirements of the policy, but whether they did or not is wholly immaterial, since the defendant, on receiving the proofs, instead of pointing out the deficiencies therein, and requiring a further statement and certificate, refused to pay the loss; placing its refusal wholly upon the ground that the condition prohibiting a vacancy of the buildings, without notice and consent, had been broken.

Where proofs of loss are served, and retained by the insurance company without objection, and the company refuses to pay the loss, placing its refusal upon some ground other than defects in the proofs, any further performance of the condition in relation to proofs is waived, and the company is estopped, when sued on its policy for the loss, to make any formal objections to the proofs. Insurance Co. v. Dunmore, 75 Ill. 14;Insurance Co. v. Cary, 83 Ill. 453;Insurance Co. v. Ward, 90 Ill. 550;Insurance Co. v. Tucker, 92 Ill. 64;Mill Co. v. Assurance Co., 118 Ill. 396, 9 N. E. Rep. 274; Scammon v. Insurance Co., 20 Bradw. 500.

The ground, however, for a reversal of the decree, upon which reliance is chiefly placed by the defendant, is that Milne was not the defendant's agent, and had no authority to stipulate on its behalf for a clause in the policy permitting the buildings insured to become and remain vacant and unoccupied for 30 days without invalidating the insurance. The contention is that Milne was merely an agent or employe of Whipple & Smiley, and that the maxim, delegatus non potest delegare, applies.

Whipple & Smiley, though representing their principal in a particular locality, or within a limited territory, and therefore called ‘local agents,’ were in fact general agents of the defendant in the matter of issuing policies. They were not only appointed agents, but supplied with blank policies, properly signed by the company, which they were authorized to fill up, countersign, and deliver to the assured. The rule is well established that this constituted them the general agents of the insurers in the matter of soliciting and accepting risks, agreeing upon and settling the terms of insurance, and carrying the same into effect by issuing the policies. Pitney v. Insurance co., 65 N. Y. 6;Insurance Co. v. Kinnier's Adm'x, 28 Grat. 88;Viele v. Insurance Co., 26 Iowa, 9;Carroll v. Insurance Co., 40 Barb. 292;Insurance Co. v. Maguire, 51 Ill. 342; May. Ins. § 126.

Whipple & Smiley, possessing, as they did, the powers of general agents in the matter of making contracts of insurance and issuing policies, will be presumed to have possessed competent authority to stipulate for the insertion in the insurance contract with the complainant of the clause in question relating to the occupancy of the buildings to be insured. Such stipulation was clearly within the apparent purview of their agency, and, unless there were limitations upon their authority, of which the complainant had notice at the time the contract was made, the defendant cannot now set up want of authority in them. But it is said that the complainant was notified by the terms of the policy which he received that no agent of the insurance company had authority to enter into a contract of insurance upon any other terms or conditions than those embodied in the blank policies furnished by the defendant to Whipple & Smiley. Those blanks, it is true, contained the following condition: ‘It is further understood and made a part of this contract that the agent of this company has no authority to waive, modify, or strike from this policy any of its printed conditions.’ That this clause cannot have the effect there contended for is apparent from either of two considerations.

At the time the contract of insurance was agreed upon, which was the day next prior to the delivery of the policy, the complainant, so far as the evidence shows, had no notice that any such clause was contained in the company's blanks. And it is doubtful whether even the delivery of the policy to him was notice of its contents, when that fact is taken in connection with his inability to read it, and Milne's assurance that it was drafted in accordance with the contract.

The other reason is that the clause above quoted, when the printed conditions of the policy are subjected to the strict rule of interpretation which properly applies to them, neither is, nor purports to be, a limitation upon the power of the company's agents in agreeing upon and settling the terms of the contract of insurance. It is a limitation upon the powers of agents to waive, modify, or strike from the policy any of its printed conditions. A waiver is the voluntary yielding up by a party of some existing right, but, until the...