Continental Insurance Co. v. Simpson

• Decision Date: 24 May 1927
• Citation: 220 Ky. 167
• Parties: Continental Insurance Company of City of New York v. Simpson.
• Court: United States State Supreme Court — District of Kentucky

220 Ky. 167

Continental Insurance Company of City of New York v. Simpson.

Court of Appeals of Kentucky.

Decided May 24, 1927.

1. Contracts. — Parties to contract may agree to amend, alter, set aside, or annul it in any legal way, notwithstanding stipulation to contrary; but exercise of such power by agents may reasonably be limited to those designated for purpose in contract.

2. Insurance. — Independently of Ky. Stats., section 762a-18, stipulation in insurance policy that forfeiture provisions can only be waived in writing indorsed on policy is invalid, and waiver may be made by parol.

3. Insurance. — Where matter is within apparent scope of local agent's authority and insured is not aware of any limitations thereon, insurer is bound by agent's action.

4. Insurance. — Notice to agents of any material fact affecting risk is imputed to insurer, thought agent had no authority to act in premises.

5. Insurance. — Presumption that agent taking application, issuing policy, receiving premium, and delivering policy has power to waive provisions therein by words or conduct though policy provides that it can be done only by writing indorsed thereon, does not apply to mere soliciting agents.

6. Insurance. — Insured advised by indorsement on fire policy, when returned to him with change of occupancy permit attached, that agent who sent policy to insurer had no authority to grant vacancy permits, could not recover for destruction of building during subsequent vacancy without permit, though agent stated that he did not have to write to company therefor, especially as insured was not seeking other insurance, which agent's action prevented him from getting.

Appeal from Owen Circuit Court.

T.M. GALPHIN, JR., GORDON & LAURENT and J.W. CAMMACK for appellant.

J.G. VALANDINGHAM for appellee.

OPINION OF THE COURT BY JUDGE McCANDLESS.

Reversing.

In a suit for the destruction by fire of a dwelling covered by policy in the Continental Insurance Company, Obie Simpson recovered a judgment for $1,045, and the company appeals. The policy was issued in June, 1922, for a period of five years. The insured executed a note for the premium payable in five installments on the 1st day of July of each year. Among other things, the policy provided:

"If any of the buildings described are now vacant, unoccupied or uninhabited or shall become unoccupied or uninhabited and so remain for a period exceeding ten days without written consent herein, then in each and every one of the above cases this policy shall be null and void."

It further provided:

"No local agent or other representative has the power to consent to the assignment of this policy or make any indorsements thereon. All indorsements must be made by an officer of the company in its Western Department office at Chicago, Ill."

The property was destroyed about the 10th of July, 1925. It had then been vacant about three months without any vacancy permit from the company. This was relied upon to avoid liability, to which plaintiff pleaded a waiver.

The facts show that at the time the policy was issued the plaintiff was occupying the house as a residence. In the summer of 1924 he removed, placing tenants in the house. In accordance with another provision of the policy, he then procured a permit for change of occupancy. He admits that Mr. Davis, the local agent, told him that he would have to send the policy to the company to get this permit; that he furnished the policy to Mr. Davis for that purpose; that on its return he observed upon it the following typewritten indorsement, and that this did not appear on it theretofore:

"Notice. — Attention is called to condition in the policy rendering it null and void if the building herein mentioned be or become vacant or unoccupied."

And that these words were stamped on the back of the policy. He further states that the tenants vacated the building upon the 10th of March, 1925, and that it remained unoccupied until destroyed by fire. He says, however, that he was making some repairs and having the house papered preparatory to moving in himself, and that in June he visited the local agent and told him of these matters; that the premium was then due and that he wanted to cancel the policy until he moved back; that Davis said: "Don't cancel the policy. If you are going to move back over there in a few weeks, I can give you a vacancy permit." I said: "I might not get back over there in that time." He said: "If you are not back in 30 days, I can give you one for 60 more." So I told him that I would send the premium off for the policy. I sat there a few minutes, and then I said: "Write it up." But he said: "I can just tell you and then notify the company; that is all I have got to do; don't have to write." Q. Did he tell you that you had it? A. Yes sir; he said, "I will give you one for 60 days," and I said, "Well, I will send the premium off." He returned home and sent the check for the premium. This was accepted by the company but later returned. He also testifies that Mr. Davis admitted this on several occasions after the fire, and that the adjuster of the company told him that was sufficient. Mr. Davis denies these statements, but says that just a few days before the fire the plaintiff came in and asked him in reference to the vacancy permit, telling him that he was going to move back in the next three or four days. He told him that it would be of no use to send the application off for the permit if he was going to move in within a few days, but that if he did not move in within the next three or four days he would write for the permit for him He never...