Eagle Fire Co. v. Globe Loan & Trust Co.

• Decision Date: 03 April 1895
• Citation: 44 Neb. 380,62 N.W. 895
• Court: Nebraska Supreme Court
• Parties: EAGLE FIRE CO. v. GLOBE LOAN & TRUST CO.

44 Neb. 380

62 N.W. 895

EAGLE FIRE CO.

v.GLOBE LOAN & TRUST CO.

Supreme Court of Nebraska.

April 3, 1895.

Syllabus by the Court.

1. An insurance contract provided: “This policy, unless otherwise provided by agreement indorsed hereon, shall be void if the insured shall hereafter procure any other insurance on the property covered by this policy.” The insured procured additional insurance on the insured property. In a suit upon the first policy the first insurer interposed the defense that the policy was not in force at the date of the loss, because the insured had procured additional insurance contrary to the above provision of the policy. The insured admitted the procuring of the additional insurance, but pleaded in avoidance of the defense that the insurance company had waived its right to forfeit the policy by reason thereof, in this: (1) That the insurance company knew of the additional insurance prior to the loss, and, by neglecting to cancel the policy in suit by reason thereof, it thereby waived its right to forfeit the policy, and elected to carry the risk notwithstanding the additional insurance; (2) that after the loss occurred the insurer, with full knowledge of the additional insurance, submitted the amount of the loss sustained by the insured to arbitration, the insured and insurer paying the expenses thereof; (3) that after the arbitration the insurer canceled the policy, the cancellation taking effect from and after the day of the date of the loss, and repaid to the insured the unearned premium for carrying the risk from the day after the date of the loss until the expiration of the policy by its terms. Held: (1) That the provision in the insurance policy prohibiting additional insurance on the insured property was inserted therein for the benefit of, and might be waived by, the insurer. (2) That the violation of the policy by the insured, in procuring additional insurance on the insured property without the knowledge or consent of the first insurer, did not render the policy issued by it void, but voidable only, at the election of such first insurer.Hughes v. Insurance Co., 59 N. W. 112, 40 Neb. 626, followed. (3) The evidence (set out in the opinion) does not establish that the insurance company knew of the additional insurance prior to the date of the loss sued for. (4) That the conduct of the insurance company after the loss, and with actual knowledge of the additional insurance, in submitting the amount of the loss to arbitration, and in canceling the policy and repaying the unearned premium, sustains the finding of the jury that the insurance company, by such conduct, elected to and did waive its right to cancel the policy by reason of such additional insurance.

2. Knowledge on the part of the agent of an insurance company, authorized to issue its policies, of facts which render the contract voidable at the insurer's option, is knowledge of the company. Gans v. Insurance Co., 43 Wis. 108, followed. Insurance Co. v. Heiduk, 46 N. W. 481, 30 Neb. 288, distinguished.

3. The statement of an insured to the agent of the insurance company carrying the risk that the former intends to take out additional insurance on the insured property is not notice to such agent, or his principal, of the existence of such additional insurance when taken out by the insured.

4. An assignment of error in this court that the district court erred in admitting the evidence of a certain witness will be overruled if any of the evidence given by the witness was competent.

Error to district court, Douglas county; Doane, Judge.

Action on a policy of insurance by Henry G. Hubbard against the Eagle Fire Company of New York, wherein the Globe Loan & Trust Company was made a party. From the judgment rendered, defendant brings error. Affirmed.

Frank T. Ransom and Howard B. Smith, for plaintiff in error.

J. Fawcett, for defendant in error.

RAGAN, C.

This is a suit brought to the district court of Douglas county against the Eagle Fire Company (hereinafter called the “insurance company”) upon an ordinary policy of fire insurance issued by the insurance company to one Ida W. Brown, insuring certain property of hers against loss or damage by fire from noon of the 13th day of March, 1890, to noon of the 13th day of March, 1895. The suit was brought by Henry G. Hubbard, Mrs. Brown's assignee. Pending the action, Hubbard died, and the suit was revived in the name of his executors. The connection of the Globe Loan & Trust Company with the case need not be stated. Hubbard's executors had a verdict and judgment, and the insurance company has prosecuted to this court a petition in error. In our examination of the case we shall not confine ourselves to a consideration of the errors assigned in the order of their assignment, but consider them under the following heads.

1. That the verdict is not sustained by sufficient evidence.

The policy sued upon contained this provision: “This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void if the insured now has, or shall hereafter make or procure, any other contract of insurance, whether valid or not, on property covered in whole or in part by this policy.” As a defense to the action the insurance company pleaded that after the issuance of the policy in suit, and without its consent indorsed in writing on the policy, Mrs. Brown procured additional insurance on the insured property. Hubbard's executors, by their reply to this defense, admitted that Mrs. Brown procured additional insurance on the insured property without the consent of the insurance company having been first indorsed in writing on the policy in suit, but pleaded in avoidance of the defense that the company had waived Mrs. Brown's violation of the policy in that respect, in this: That prior to the loss the company had notice of the procuring of such additional insurance, and failed to exercise its right to cancel the policy by reason of such additional insurance, and thereby elected to carry the risk notwithstanding such additional insurance; that after the loss occurred the insurance company, with full knowledge of the existence of the additional insurance, in pursuance of an agreement with Mrs. Brown, submitted the amount of the loss or damage sustained by Mrs. Brown by reason of the destruction of the insured property by fire to arbitration, the insured and the insurer paying the expenses of such arbitration; that the loss occurred on the 9th day of November, 1890, and on the 24th of November, 1890, after arbitration of the amount of the loss, the company elected to and did cancel its policy,--such cancellation taking effect only from and after the day of the date of the loss,--and repaid to the insured the unearned premium for carrying the risk from the day after the date of the loss until the expiration of the policy by its terms. The evidence is undisputed that the company canceled the policy on the 24th of November, 1890, and repaid to Mrs. Brown the unearned premium, and took from her a receipt of that date, in words and figures as follows: “Received of the Eagle Fire Company twenty-nine dollars, return premium on policy number 474, in consideration of which said policy is canceled. Said cancellation dates from November 9th, 1890, subject, however, to claim for loss up to and including November 9th, 1890.” The evidence is also undisputed that after the loss had occurred the insurance company, with knowledge of the fact that Mrs. Brown had procured additional insurance upon the property subsequent to the date of the policy in suit, submitted the amount of the loss or damage to the insured property to arbitration. The evidence as to the knowledge or notice which the insurance company had of the additional insurance prior to the loss is contained in the following testimony given by Brown, the husband of the insured: “Q. After * * * this insurance had been taken out that is being sued on here, did you visit Ringwalt Bros., agents for the Eagle Company, for the purpose of taking out further insurance? A. I did; yes, sir. Q. Who did you find in the office? A. Mr. Ringwalt,--the same that is sitting right near the desk in the court room. Q. At the present time? A. Yes, sir. Q. What transpired between you and Mr. Ringwalt? A. I told Mr. Ringwalt that I was going to take out some more insurance. I asked him to give me a list of the insurance, as Mr. Devries had changed the amount of the policies. I was not sure about the amount. He said, ‘All right’; and he went and got some large book from a bookcase, and he put it down with a lead pencil. Q. Who put it down? A. Mr. Ringwalt put down the amount of the insurance and the name of the company, and handed that to me. Q. Look at the paper I hand you now, and state whether that is the memorandum Mr. Ringwalt made and handed you at the time you are speaking of? A. That is the memorandum. Q. When did you first speak to Mr. Ringwalt, after that, about additional insurance, and when did he first learn about it, to your knowledge,--about the additional insurance? A. After the time I got this paper from him? Q. Yes. A. Why, on the morning of the 10th--I think it was--of November. That was the day after the fire, on Monday morning. Q. Where did you see him? A. Out there at the house. Q. What was said there about additional insurance? A. He wanted to know if I had that insurance written I was speaking about, and I told him ‘Yes.’ He said, have I notified those companies. He wanted to know if they had been out there; and I said, ‘No; not so far.’ Q. Was anything said about the amount of additional insurance? A. Yes; I told him the amount. Q. Was anything further said about it? A. No, sir; Mr. Ringwalt seemed to be in a...