First Nat. Bank of Nome v. German Am. Ins. Co.

• Decision Date: 23 February 1912
• Citation: 23 N.D. 139,134 N.W. 873
• Parties: FIRST NAT. BANK OF NOME v. GERMAN AMERICAN INS. CO.
• Court: North Dakota Supreme Court

23 N.D. 139

134 N.W. 873

FIRST NAT. BANK OF NOME

v.GERMAN AMERICAN INS. CO.

Supreme Court of North Dakota.

Dec. 11, 1911.

On Rehearing, Feb. 23, 1912.

Syllabus by the Court.

Action on two fire insurance policies issued by defendant company covering plaintiff's bankingbuilding and its contents. Such policies were issued by one T., who was both plaintiff's cashier and defendant's local agent. These policies are in the standard form, containing, among other things, the usual stipulations to the effect that the policies shall be void if additional insurance is effected on the property, without consent thereto being indorsed on the policy, or “if the hazard be increased by any means within the control or knowledge of the insured.”

Concededly, T., as plaintiff's cashier, effected other and additional insurance on the bank building in another insurance company, and no indorsement of consent thereto was ever made on the policies in suit, and defendant had no actual knowledge thereof until after the property was consumed by fire.

Held, that such stipulations are valid, and hence such other insurance rendered the policies void, in the absence of a waiver thereof by defendant, or in the absence of facts estopping it from urging such defense.

The knowledge of T. of facts avoiding such policies will not, for reasons stated in the opinion, be imputed to his principal, the defendant. Leisen v. Insurance Co., 20 N. D. 316, 127 N. W. 837, 30 L. R. A. (N. S.) 539, distinguished.

Where an agent's duty to his principal is opposed to or conflicts with his own interest or that of another person for whom he acts, the law will not impute his knowledge gained in such transaction to such principal.

Knowledge of such additional insurance acquired by defendant's adjuster after the fire did not operate as a waiver of defendant's right to urge the invalidity of such policies.

Held, that no recovery on said policies for the personal property loss can be had for the further reason that the evidence discloses that no proper diligence on plaintiff's part was exercised to save the same.

Appeal from District Court, Barnes County; E. T. Burke, Judge.

Action by the First National Bank of Nome against the German American Insurance Company. From a judgment for plaintiff, and an order denying defendant's motion for judgment non obstante veredicto or for a new trial, defendant appeals. Reversed, with directions.

Barnett & Richardson, for appellant. Page & Englert, for respondent.

FISK, J.

Plaintiff seeks to recover on two insurance policies issued by defendant company in the fall of 1908. Both policies covered plaintiff's banking building in the village of Nome, this state, and one of such policies also covered the furniture and fixtures while contained in such bank building. The first policy is for $1,000 on the building, and the other is for $500 on the building and $800 on furniture and fixtures. Both of these policies were carried on this property for several years, being renewed from year to year. One Torbenson during all the times mentioned was cashier of plaintiff bank and also the local agent at Nome for defendant company, and in the latter capacity he issued the policies in suit. Each of such policies are in the standard form, insuring plaintiff against all direct loss or damage by fire in the amounts mentioned, and containing, among other things, the following stipulations and conditions: “No officer, 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 provisions 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 under this policy exist or be claimed by the insured unless so written or attached. * * * This entire policy shall be void if the insured has concealed or misrepresented, in writing or otherwise, any material fact or circumstance concerning this insurance or the subject thereof; or if the interest of the insured in the property be not truly stated herein; or 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 a loss. 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; or if the hazard be increased by any means within the control or knowledge of the insured. This company shall not be liable for loss caused directly or indirectly by * * * order of any civil authority * * * or by neglect of the insured to use all reasonable means to save and preserve the property at and after a fire or when the property is endangered by fire in neighboring premises.”

Some time prior to the fire hereinafter mentioned, the exact date being immaterial, Torbenson, as cashier of plaintiff, applied for and procured to be issued to it by the Home Insurance Company a policy for $500 covering said building, which policy was in force at the date of the fire. It is conceded that consent to such additional insurance was not indorsed on either of the policies issued by defendant and no notice was given to the defendant company of such other insurance, unless the notice and knowledge thereof on Torbenson's part can be imputed to it, which we will presently notice. On the night of June 5, 1909, a fire was discovered in the rear of a general merchandise store about six lots east of the bank building and on the same side of the block. The bank building stood in the southwest corner of the block, and between it and the place where such fire originated there were several buildings, all of which were consumed by such fire. Nome, being a small village, was not equipped with modern fire apparatus, and, shortly after the fire started, a consultation was had between Torbenson, the sole representative of the bank present at the time, and the president of the board of village trustees and one of such trustees, together with several other citizens, and it was finally agreed that in order to prevent the fire from reaching what is known as the Hanson store, which was a large establishment, heavily insured, and situated east and just across the street from the bank building in the corner of the next block, they concluded it necessary or advisable to destroy the bank building by burning the same, which they proceeded to do by saturating the same with kerosene oil and lighting it. While the record discloses that there was plenty of time before burning such building to remove the furniture contained therein, no effort appears to have been put forth to this end, and practically all of it was burned with the building.

At the conclusion of plaintiff's testimony, and also at the conclusion of all of the evidence, defendant's counsel moved for a directed verdict upon the grounds:

“First. That it appears affirmatively that there was other insurance on this building, notice thereof not being given to the defendant.

Second. That it appears affirmatively that this building was destroyed in the presence of and with the tacit consent of the cashier of the plaintiff, who was then present.

Third. That it appears affirmatively from the evidence herein that there was no effort made on behalf of the plaintiff or its officers to protect the property at the time of the fire or thereafter. It further appears from the testimony of the plaintiff that there was no effort made to save the personal property therein.

Fourth. It affirmatively appears that there was false swearing in the matter of making final proof of this loss.”

Such motion was denied, and the cause submitted to the jury, who returned a verdict in plaintiff's favor for $2,099.40. Thereafter defendant moved in the alternative for judgment notwithstanding the verdict or for a new trial, which motion was denied and judgment entered on the verdict, and this appeal is from the order and judgment aforesaid.

In this court appellant assigns numerous errors, but we find it unnecessary to set them out in full or to notice more than two of appellant's contentions, which are that the policies were void at the time of the fire on account of such additional insurance procured by plaintiff without defendant's knowledge or consent, either express or implied, and that plaintiff, through its cashier, neglected to use reasonable means to save and preserve the personal property.

[1] We are agreed that these contentions must be upheld, and the trial court directed to reverse its judgment and enter a judgment in appellant's favor. Our reasons for reaching this conclusion are briefly as follows: Such additional insurance was in direct contravention of the stipulations in the policies in suit which, in effect, provide that consent thereto must be indorsed on such policies, and also, “if the hazard be increased by any means within the control or knowledge of the insured,” the entire policy shall be void. The uncontroverted showing is that with such additional insurance the bank building was overinsured, and the hazard was thus increased by means within the control and knowledge of the insured in direct contravention of the provisions of the policies, and, unless defendant company has waived the benefit of such stipulations or has done something creating an estoppel on its part to urge such defenses, the recovery cannot be sustained, and this, regardless of Torbenson's alleged good faith in procuring such additional insurance. We take it to be the universal holding that such conditions or stipulations are valid and binding on the...