Franklin v. Atlantic Fire Ins. Co.

• Decision Date: 31 March 1868
• Citation: 42 Mo. 456
• Parties: JOHN FRANKLIN, Appellant, v. THE ATLANTIC FIRE INSURANCH COMPANY, Respondent.
• Court: Missouri Supreme Court

42 Mo. 456

JOHN FRANKLIN, Appellant,

v.THE ATLANTIC FIRE INSURANCH COMPANY, Respondent.

Supreme Court of Missouri.

March Term, 1868.

Appeal from St. Louis Circuit Court.

The facts sufficiently appear in the opinion of the court.

Harding & Crane, for appellant.

I. The court below erred in refusing to allow the plaintiff to introduce the evidence offered. This evidence was competent to show that, prior to the contract being entered into, the defendant had waived a compliance with the third condition of the policy,^a1 so that this condition never became a part of the contract. Such a waiver may be by parol or acts in pais. ( Carroll v. Charter Oak Ins. Co., 38 Barb. 402, and authorities there cited; same case, 40 Barb. 292; Goit v. National Protection Co., 25 Barb. 189; Ripley v. Ætna Ins. Co., 29 Barb, 552; Atlantic Ins. Co. v. Goodall, 9 Foster--29 N. H.--182; Hallock v. Insurance Co., 2 Duch. 268; Boehen v. Williamsburgh Ins. Co., 35 N. Y. 131; Bersche v. Globe Ins. Co., 31 Mo. 546.) It was the fault of the agent of the defendant that the proper statement was not made on the face of the policy, and the plaintiff should not be prejudiced by the omission. ( Rowly v. Empire Ins. Co., 36 N. Y. 550; Post. v Ætna Ins. Co., 43 Barb. 351.)

Ladue & Birge, for respondent.

I. The court properly rejected the evidence offered to show “that before the policy was delivered and premium paid, the company's agent was informed of the existence of encumbrances.” This was merely an attempt to vary the written policy by parol evidence, by showing that the parties abandoned one of the conditions of the policy; in other words, that they made a different contract than the one in evidence before the court. (Phil. on Ins., vol. 1, pp. 49, 50, 51, 81, vol. 2, p. 680; 14 Mass. 15; 1 Taunt. 115; 21 Conn. 19-36; 1 Hall, 452; 23 Mo. 80.)

II. The only occasion for admitting such evidence arises, if ever, in an equitable action brought to reform the policy for fraud or mistake in executing it. It is not competent evidence in a suit at law. (23 Mo. 80-5; 2 Cranch, 419; 17 Mo. 247, 257.)

III. Even if this evidence had been admitted, “that verbal notice was given to the agent of existing encumbrances,” still the policy required that it should be “indorsed thereon,” and this provision is a condition precedent, and would defeat recovery. (21 Mo. 97-104; 16 Pet. 512; 17 Mo. 247-257.)

IV. By the terms of defendant's policy, one of its agents evidently had no power to waive the conditions in its issued policies. The condition itself was notice to the plaintiff of the agent's inability to waive it. Moreover, this agent is charged in the pleadings with having conspired with the plaintiff to defraud his principal, the defendant in this case. Under such circumstances his admissions could not be admitted to bind his principal. (17 Mo. 247.)

HOLMES, Judge, delivered the opinion of the court.

The plaintiff sues upon a policy of insurance issued by the Atlantic Fire Insurance Company of Brooklyn, New York, through its agent at St. Louis. The insurance was upon household furniture, against loss by fire.

It does not appear that any written application for insurance was required.

The policy contained a condition that, “if any person effecting insurance in this company shall make any misrepresentation or concealment touching the risk to be assured,” the policy should be void; and also another, that “if the interest of the assured in the property be any other than the entire, unconditional, and sole ownership of the property, for the use and benefit of the assured, it must be so represented to the company and so expressed in the written part of this policy, otherwise the policy shall be void.”

The defendant offered evidence tending to prove that, at the date of the policy, the plaintiff owned only an undivided interest of one-half in the property insured, and that there were two encumbrances on the property by deeds of trust executed by the plaintiff's grantor.

In rebuttal, the plaintiff proposed to show that after the policy had been made out, but before it was delivered or the premium paid, the plaintiff had informed the agent of the company that he was only a part owner of the property, and that the same was encumbered as aforesaid, and that the agent then said “it would make no difference; it was all right,” or words to that effect.

This evidence was excluded, and the plaintiff took a non-suit.

The only material question in the case is, whether this evidence was admissible.

By the general law of insurance, the interest of the assured in the property is not required to be specifically described in the policy. This matter was not in itself of the nature of a misrep-resentation touching the risk to be assumed.

It did not regard the situation or character of the property. It became important only by virtue of the condition which required that, if the interest were any other than the entire, unconditional, and sole ownership, it should be so represented to the company and so expressed in the policy. The object of this clause was, doubtless, to protect the company against the danger of taking risks on the property insured for so large an amount in proportion to its value, or the value of the interest of the assured, as to furnish a temptation to fraudulent conduct. This evidence would show that the fact was truly represented, and then there would be no misrepresentation in respect of that matter. It was further required that it should be so expressed in the written part of the policy; and this was not done. If it had been done it would have amounted to an express warranty; and it was provided that if it were not so done the policy should be void. Now, it was plainly the duty of the agent to...