Dahlberg v. St. Louis Mut. Fire & Marine Ins. Co.

• Citation: 6 Mo.App. 121
• Parties: GUSTAV W. DAHLBERG, Respondent, v. ST. LOUIS MUTUAL FIRE AND MARINE INSURANCE COMPANY, Appellant.
• Decision Date: 04 June 1878
• Court: Missouri Court of Appeals

6 Mo.App. 121

GUSTAV W. DAHLBERG, Respondent,

v.ST. LOUIS MUTUAL FIRE AND MARINE INSURANCE COMPANY, Appellant.

St. Louis Court of Appeals, Missouri.

Jun. 4, 1878.

1. In case of a defence to a policy grounded on “other insurance ” not notified, held, that the obligation of notice does not extend to all existing policies not void on their face; but the issue to be tried is whether, on all the facts legally in evidence, the “other insurance” is valid, and the policy binding.

2. Where the agent of the company made inquiries of the owner as to the property and took notes of his answers, which were correct, and where, after having prepared the policy, and just before delivering it, the agent handed to the owner a printed application in which the agent had himself written the answers, and told the owner to sign the application, which the latter at once did in presence of the agent, without reading it or knowing its contents, the misrepresentation of a material fact in such application would not necessarily enable the insurer to avoid payment of the policy.

APPEAL from St. Louis Circuit Court.

Reversed and remanded.

JAMES TAUSSIG, for appellant: The paper signed by the insured was not his application or statement, but was the statement of the Hope Company's agent.-- Combs v. Insurance Co., 43 Mo. 150; Plumb v. Insurance Co., 18 N. Y. 392. The action of the Hope Company's agent operated as an estoppel in pais on that company to deny the validity of the policy.-- Rowley v. Insurance Co., 36 N. Y. 550; Franklin v. Insurance Co., 42 Mo. 460; Union, etc., Co., v. Wilkinson, 13 Wall. 222. The policy issued by the Hope Company was “other insurance,” and notice was unnecessary.-- Hutchinson v. Insurance Co., 21 Mo. 10; Rothschild v. Insurance Co., 52 Mo. 362; Obermeyer v. Insurance Go., 43 Mo. 576; Bigler v. Insurance Co., 22 N. Y. 402; Philbrook v. Insurance Co., 37 Me. 137; Clark v. Insurance Co., 6 Cush. 342.

W. J. SHARMAN, for respondent: If the second policy against which the contract stipulates cannot be enforced, it does not avoid the first, notwithstanding the clause of forfeiture.-- Obermeyer v. Insurance Co., 43 Mo. 577; Gale v. Belknap, 41 N. H. 70; Stacey v. Insurance Co., 2 Watts & S. 506; Jackson v. Insurance Co., 23 Pick. 418; Insurance Co. v. Goodell, 35 N. H. 232; Clark v. Insurance Co., 6 Cush. 342; Insurance Co. v. Slaughter, 20 Ind. 520. The Hope policy was absolutely void.-- Burritt v. Insurance Co., 5 Hill, 188; Kennedy v. Insurance Co., 10 Barb. 285; Williams v. Insurance Co., 31 Me. 219; Battles v. Insurance Co., 41 Mo. 208; Hardy v. Insurance Co., 4 Allen, 217; Franklin v. Insurance Co., 42 Mo. 456; Dawson v. Insurance Co., 1 Mo. App. 317; Fuller v. Insurance Co., 36 Wis. 603.

HAYDEN, J., delivered the opinion of the court.

This is an action upon a policy of insurance issued by the appellant, a mutual company, upon a house of which the respondent was the owner. The answer admitted the issue of the policy, and pleaded the following provision: “If the assured or his assigns shall hereafter make any other insurance on the same property, and shall not with all reasonable diligence give notice thereof to this company, and have the same indorsed on this policy, or otherwise acknowledged by them in writing, this policy shall cease to be of effect.” The answer then averred that the respondent, without notice to the appellant, effected other insurance on the same property in the Hope Insurance Company. The reply was to the effect that the “other insurance” was not valid insurance. When the policy sued on was taken out, there was a mortgage on the property, held by the Biddle Bank, and notice of this mortgage was indorsed on the appellant's policy. There was testimony tending to show that when the respondent applied for insurance in the Hope Company, the agent of the latter inquired as to the value and situation of the property, and amount of insurance on it, and took memoranda of the respondent's oral answers, which were correct; that the agent examined the property, decided to take the risk, and prepared the policy; that the respondent paid his premium and received his policy; that before delivering the policy, the agent handed to the respondent a written application and told the respondent to sign it, which the latter did, without knowledge as to its contents.

This was a printed form, and the written answers had been filled in by the agent. To the question, “Is any other person interested in the property, as mortgagee or otherwise?” the agent wrote, “No.” There was testimony tending to show that the respondent gave no such answer, and did not know any such was given, but signed the paper because requested to do so, and immediately received the policy.

The Hope Company was also a mutual company, and the terms of its charter formed a part of the policy. The charter provided that insurers should become members, etc., and had the following clause: “But if * * * the premises be encumbered, the policy shall be void, unless the true title of the insured, and the encumbrances, be expressed in the written or printed application of the insured.” At the time of the issuing of the Hope policy the mortgage to the bank was in force, and remained so until after the fire. The respondent never informed the Hope Company of the existence of the encumbrance at any time before or when he received the policy; nor did he, at any time before the fire, inform the appellant of his effecting insurance in the Hope Company. No indorsement of such insurance was made on the policy sued on.

When the house was damaged by fire, the respondent filed proofs with both companies, claiming the full amounts. In the proof filed with the appellant be disclosed his policy in the Hope Company, treating it as a valid insurance. The Hope Company, after concluding that it was not bound to pay because of the answer above given, and declaring that the policy was void in its inception, paid the respondent one-half of his loss. The present suit upon the first policy is upon a basis of a loss of $3,000; but though the respondent claimed $1,500, the finding of the court below, sitting us a jury, was only for $1,102.47.

When the validity of the policy sued on depends on the validity of another policy upon the same property, it would seem, if the question be regarded as one of principle and apart from authority, that the issue thus presented ought to be tried in the same way as any other issue on which the main issue in a case is found to depend. It is difficult to see why other tests than those by which legal questions are ordinarily determined should be applied, because the issue happens to turn on facts connected with another policy. The conduct of the insurer whose policy is incidentally in issue would seem to affect the question of the validity of the policy issued by him, and thereby to determine the rights of the defendant, a stranger, whose liability is the main issue in the case, only as far as the acts of such insurer, thus incidentally-involved, have the requisite legal efficacy. If, for instance, while the other insurance company denies the legal obligation, it can, by merely paying a certain sum, or by making a settlement on grounds wholly independent of any legal liability, thereby determine the rights of a stranger to it on another policy, it should seem that the question whether in fact or in law there was any insurance with such other company ought to be declared an irrelevant question. The doctrine then would be that the “other insurance” need not even have been a valid insurance, but only such claim or pretence of insurance, at most colorable, accompanied with a belief in it by the insured, at some time during the existence of the policy sued on, as would make notice of its existence a material fact to the defendant. Thus, if it is one reason why there should be notice that by additional insurance the risk may be unduly increased, it may be argued that the validity of the policy, so far, cuts no figure, since the risk would as well be increased by other insurance valid merely in the belief of the insured, as by other insurance valid in law. But it is noticeable that the courts which follow the case of Carpenter v. Providence Insurance Company admit that if the policy is void on its face, without reference to extrinsic facts, then no notice would be necessary. 16 Pet. 510; Bigler v. New York, etc.. Ins. Co., 22 N. Y. 402. But a policy the evidence of the invalidity of which appears on its face, as well as a policy the evidence of the invalidity of which appears aliunde, may be treated by the parties to it as a...