Fireman's Fund Ins. Co. v. Norwood, 501.

• Decision Date: 17 June 1895
• Docket Number: 501.
• Citation: 69 F. 71
• Parties: FIREMAN'S FUND INS. CO. et al. v. Norwood et al.
• Court: U.S. Court of Appeals — Eighth Circuit

69 F. 71

FIREMAN'S FUND INS. CO. et al. v. Norwood et al.

No. 501.

United States Court of Appeals, Eighth Circuit.

June 17, 1895

Separate suits were brought by O. F. Norwood and E. R. Norwood, the defendants in error, against the Fireman's Fund Insurance Company and the Norwich Union Fire Insurance Society, the plaintiffs in error, to recover alleged losses on policies of fire insurance on a stock of merchandise issued by these companies, respectively, to the defendants in error. By agreement of the parties, the suits were consolidated and tried as one cause. The policy issued by the Fireman's Fund Insurance Company bore date November 5, 1891, and contained the following conditions: 'If the assured shall have or shall hereafter make any other insurance, whether valid or not, on the property hereby insured, or any part thereof, without the consent of the company written hereon this policy shall be void. * * * All fraud or attempt at fraud, by false swearing or otherwise, shall cause a forfeiture of all claims under this policy. * * * And it is hereby understood and agreed by and between this company and the assured that this policy is made and accepted in reference to the foregoing terms and conditions, which are hereby declared to be a part of this contract, and are to be used and resorted to in order to determine the rights and obligations of the parties hereto in all cases not herein otherwise specially provided for in writing. It is further understood and made a part of this contract that only the manager of this company at Chicago has authority to waive modify, or strike from this policy any of its printed conditions, nor is the consent of an agent to an increase of risk binding upon the company until the same is indorsed in writing upon the policy and the increased payment paid; and in case this policy shall become void by reason of the violation of any of the conditions thereof, it is understood that only the said manager has power to revive the same, and that a new policy intended to replace any policy so made void shall be of no effect until the actual issue and delivery thereof to the assured, any contract by parol or understanding with the agent to the contrary notwithstanding. ' The policy issued by the Norwich Union Fire Insurance Society bore date November 5, 1891, and contained the following conditions: '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. * * * This entire policy shall be void in case of any fraud or false swearing by the insured touching any matter relating to this insurance or the subject thereof, whether before or after loss. * * * This policy is made and accepted subject to the foregoing stipulations and conditions, together with such other provisions, agreements, or conditions as may be indorsed hereon or added hereto, and no officer or agent or other representative of this company shall have power to waive any provision or condition of this policy, except such as by the terms of this policy may be the subject of agreement indorsed hereon or added hereto; and, as to such provision and conditions, no officer, agent, or representative shall have such power, or be deemed or held to have waived such provisions or conditions, unless such waiver, if any, shall be written upon or attached hereto, nor shall any privilege or permission affecting the insurance attached hereto, nor shall any privilege or permission affecting the insurance under this policy exist or be claimed by the insured unless so written or attached. ' To each policy was attached a slip or rider allowing $27,500 additional insurance. The total insurance on the stock at the time of the fire was $38,300. W. B. Smith was the general agent of the defendants at Larned, Kan., where the plaintiffs were carrying on a mercantile business. A witness testifies that: 'Mr. W. B. Smith came to me and wanted me to see Mr. Norwood and see if he would not let him have a part of the insurance. He said he was placing a large amount of insurance, and came to me and insisted that I should go and see Mr. Norwood and have him give him some of the insurance. He said to me that these people were carrying a large amount of insurance, and that he presumed that they would carry about the same amount as last year. I says, 'You are well acquainted with him, and you can go and have a talk with him'; and I says, 'I presume likely that if he is not bound he will let you have some of it'' One of the plaintiffs testifies as follows: 'Mr. Smith came into the store and asked me if he could take out some insurance on the stock. I told him I had made arrangements with Mr. Ormandy to look after the insurance for me, and then he says he wanted to know how much insurance we were going to carry, and I told him forty thousand dollars. After a little while longer, I says: 'I will tell you what I will do, Mr. Smith. I will go and see Mr. Ormandy, and if it is satisfactory to him I will let you have a portion of the insurance.' I went right from Mr. Ormandy's office to Mr. Smith's office, and saw him there, and told him that I had seen Mr. Ormandy, and that it was satisfactory to him, and I would let him carry ten thousand dollars on my stock. ' Policies in four different companies for $2,500 each, amounting to the $10,000, were soon thereafter delivered by Smith, the agent, to the insured, who, after looking at their face to see that the amount was correct, put them in their safe, and did not know until after the fire that the policies limited concurrent insurance to $27,500, instead of $40,000, as the insured had stated to the agent, Smith. No exception was taken to the charge of the court. Exception was duly saved to the refusal of the court to give the following instructions asked by the defendants: 'If you find that, after said policy was issued, plaintiffs procured other insurance which made the aggregate amount of insurance on said policy exceed thirty thousand dollars, and that provision therefor was not indorsed on the policy, then plaintiffs are not entitled to recover, although they may have informed the agent, before the policy was issued, that they desired or expected to carry forty thousand dollars of insurance on said stock, and the agent orally assented thereto, and your verdict must be for the defendant company. ' 'You are instructed that it is admitted by the pleadings that at the time of the fire plaintiffs had insurance on said stock amounting to thirty-eight thousand three hundred dollars. Now you are instructed that mere parol notice to defendants' agent, Smith, before said policy was issued, that plaintiffs desired or expected to carry on said stock of goods more than thirty thousand dollars, and the statement from Smith that the same would be all right, was not of itself sufficient to comply with the requirement of said policy, but it was necessary, in case plaintiffs procured more than thirty thousand dollars, insurance on said property, that the same should not only be notified to defendants, but should be mentioned in or indorsed upon the policy, otherwise the policy was void and of no effect. ' Among other defenses, the answer set up these two: (1) Other insurance for which written consent had not been indorsed on the policy; and (2) a fraudulent overvaluation of the goods in the proofs of loss. In the circuit court the first defense seems to have been the one chiefly relied on. The jury found the property was worth all the plaintiffs claimed it was, and the evidence abundantly supports the finding; and the second defense need not be further noticed.

M. A. Fyke (Ed. E. Yates and C. V. Fyke, on the brief), for plaintiffs in error.

C. N. Sterry (W. H. Vernon, on the brief), for defendants in error.

Before CALDWELL, SANBORN, and THAYER, Circuit Judges.

CALDWELL Circuit Judge, after stating the case as above, .

Upon the evidence and the authorities, it cannot be controverted that Smith was the general agent of the defendants, and that whatever he said and did in soliciting, issuing, and delivering the policies in suit, and collecting the premiums, has the same legal effect as if done by the company itself. The material question in the case is whether the instructions asked by the defendants, and which we have set out in the statement, should have been given. The contention of the plaintiff in error is that the condition in the policy that 'if without written consent hereon there is any prior or subsequent insurance, valid or invalid, on said property, this policy shall be void, ' cannot be waived by parol, and that nothing that the defendants' agent may have said or known or verbally agreed to in relation to prior or subsequent insurance can operate to effect or avoid this condition, either by way of waiver or estoppel or as a new contract; but that there must be a written consent indorsed on the policy, as provided in the condition, or other insurance avoids the policy. In the early case of Carpenter v. Insurance Co., 16 Pet. 495, which is the first case cited in the brief of the plaintiffs in error, it is held by the supreme court of the United States that the requirement of written consent cannot be waived by parol, but must be indorsed in writing on the policy; and in some early cases in the state courts the same doctrine was maintained, and is probably still maintained in Massachusetts and Rhode Island, although the supreme court of the latter state in a recent case concedes that it is against the weight of authority. In Reed v. Insurance Co. (R.I.) 24 At. 833, the court said:

'The first question is whether the

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