Georgia Home Ins. Co. v. Stein

• Decision Date: 12 June 1895
• Citation: 18 So. 414,72 Miss. 943
• Court: Mississippi Supreme Court
• Parties: GEORGIA HOME INSURANCE CO. v. R. STEIN, USE, ETC

18 So. 414

72 Miss. 943

GEORGIA HOME INSURANCE CO. v. R. STEIN, USE, ETC

Supreme Court of Mississippi

June 12, 1895

FROM the circuit court of Leflore county, HON. R. W. WILLIAMSON Judge.

Action against the Georgia Home Insurance Company on a policy of fire insurance. The policy was issued to Mrs. R. Stein insuring certain property which, at the time of issuance, was subject to two trust-deeds given by her, one in favor of the Delta Bank, of Greenwood, and the other in favor of W. H Tribette. The latter contained the following, among other stipulations: "Any loss that may be proven to be due the assured, under the contract, shall be payable to W. H Tribette." The action was brought in the name of Mrs. Stein, for the use of Tribette, and the trial resulted in a verdict and judgment for plaintiff, and defendant appeals. The facts touching the only question passed upon by the court sufficiently appear in the opinion.

Affirmed.

Calhoon & Green, for appellant.

By the terms of the contract, Tribette's rights are restricted to those of Mrs. Stein. This would be so if the language had been general, and especially is it true where the language is: "Any loss which shall be proven to be due the assured, under the contract, shall be payable to Tribette." Such words are collateral to the contract, and do not constitute an assignment of the policy, but a mere appointment of the payee of the proceeds due thereon to the insured, and suit is to be in the name of the insured. Ostrander on Ins., § 278; 60 N.H. 164; 77 Ala. 194. This is recognized by appellee in bringing the suit in the name of Mrs. Stein, and by the further fact that proof of loss was made by her.

The execution of the mortgage, November 3, 1892, to Tribette, and that of January 3, 1893, to the bank, worked a forfeiture of the policy. 76 N.C. 145; 79 Tex. 23; 21 Hun, 83; 68 Iowa 578.

We submit that a careful reading of the evidence will show that Drennan, the agent, is fully corroborated in his statement that he had no notice of the existence of the mortgage to the bank. If he ever had any information as to it, it was at a time long previous to the issuance of the policy, and it could not be presumed to have been in his mind when he issued the policy.

The fact that the second mortgage was to secure a reloan of a part of the money paid on a previous mortgage will not prevent the forfeiture. 70 Wis. 1; 8 Cush. (Mass.), 127; 10 Ib., 444; Ostrander, § 91. There is no pretense of any subsequent contract with the company, and we submit there was no waiver. Such waiver must have the elements of equitable estoppel. Insurance Co. v. Matthews, 65 Miss. 301; Turnipseed v. Hudson, 50 Ib., 429. Mere silence with knowledge will not operate as a waiver. Insurance Co. v. Scales, 71 Miss. 975.

It was the duty of Stein to disclose the existence of the mortgages. Under the terms of the policy, the insurer is not required to examine into the condition of the title. 98 Mich. 626.

It is not shown that the information the agent had as to the mortgage was gotten while transacting the business for his principal. The rule requiring an agent to disclose to his principal his knowledge necessary to the principal's protection, whensoever acquired, has this limitation, that the information must be so recent as that it may be inferred that it was present in the agent's mind when he made the transaction. Mechem on Agency, §§ 719, 721; Goodloe v. Godley, 13 Smed. & M., 233; Ross v. Houston, 25 Miss. 591; Insurance Co. v. Scales, supra.

Longino & Somerville, for appellee.

1. The power of the agent to waive the forfeiture is well established. Insurance Co. v. Bowdre, 67 Miss. 620; Rivara v. Insurance Co., 62 Ib., 720; Insurance Co. v. Sheffy, 71 Ib., 919. It is involved in the finding of the jury that the agent did have knowledge of the trust-deed to the bank. That this is a waiver of the condition against incumbrances, see 125 Ill. 361; 76 Cal. 51; 83 N.Y. 140; 36 Minn. 112; 33 Mich. 151; 26 Ia. 58; 32 Wis. 471; 55 Mo. 172; 107 N.C. 240; 88 Tenn. 369; 88 Ala. 606; 5 Wash. 524; 144 U.S. 439; 134 Pa. St., 570; Farnum v. Insurance Co., 17 Am. St. R., and cases cited. The cases are discussed in 60 Am. Rep., 690; 100 Am. Dec., 625; 1 May on Ins., § 294; 2 Ib., 497; 1 Wood on Ins., 832, 837, 839; 2 Biddle, § 1060, note 2, and cases cited. We refer especially to Mitchell v. Insurance Co., ante, 53. It matters not when or how the agent acquired the knowledge, if it was present in his mind at the time the policy was issued. 11 Am. & Eng. Enc. L., 328, and cases cited. 1 May on Ins., 152; 2 Ib., 512. This knowledge may be implied from circumstances. 2 Biddle on Ins., § 1059. It is a metaphysical distinction to separate into different compartments of the agent's brain the information conveyed to him while engaged in his principal's business, and that otherwise received--a task impossible even to surgery.

2. The incumbrance which, as we have seen, was consented to by estoppel, was not increased or changed by the subsequent renewal of the trust-deed, and the policy is not made void. The reasoning employed in reaching this conclusion is identical with that used in discussing concurrent insurance. See Insurance Co. v. Holberg, 64 Miss. 51; 15 Am. St. Rep., 696, and cases cited.

3. For the same reason, the execution of the second trust-deed to Tribette did not work a forfeiture. By the terms of the policy, the company consented to an incumbrance in favor of Tribette to the amount of ten thousand dollars. That was the moral risk it assumed. There is uncertainty as to when the two thousand dollars was paid to Tribette on the trust-deed, but, in the absence of proof, the presumption will be in favor of the verdict, and we are warranted in the conclusion that the two thousand dollars was paid after issuance of the policy. The reloaning of money paid on the trust-deed did not increase the incumbrance beyond the maximum contemplated See, in addition to above authorities, Insurance Co. v. Young, 86 Ala. 424.

Rush & Gardner, on the same side.

The proof shows, beyond all question, that Drennan, the agent, was familiar with the loans of the bank and the trust-deeds on the property insured. The verdict of the jury settles this, and the company is estopped to set up the forfeiture. 2 Wood on Fire Ins., § 526; 36 Wis. 67.

It is also shown that the agent knew of the two thousand dollar trust-deed in favor of Tribette, which Mrs. Stein gave for the money reborrowed by her. When an agent is notified of an act which invalidates the policy, and the company does not elect to cancel it, it remains liable for the loss. A ratification of the act with full knowledge of all the facts, is equivalent to a precedent consent. 83 Ill. 453. The rule is the same as that governing as to other or concurrent insurance. The company is bound either to indorse consent upon the policy, or cancel it when it knows of such insurance. Failing to cancel, it will be treated as having assented. 2 Wood on Fire Ins., 1163; 55 N.H. 110; 14 Barb., 406; 16 Ind. 260; 73 Pa. St., 342; 50 Ill. 120; 25 Wis. 291; 53 Vt. 418; 21 Mich. 246.

The renewal of the trust-deed to the bank was a mere extension of the prior incumbrance, and did not increase the same or add to the risk. See, also, Insurance Co. v. Holberg, 64 Miss. 51.

The arbitration and appraisement were made without the knowledge of Tribette, and are not binding on him. 5 R. I., 394. Besides, the company cannot claim the benefit of the arbitration as to the amount of the loss, and, at the same time, deny its liability on the policy. 2 Wood on Fire Ins., § 456; 17 Ind. 131; 78 Pa. St., 478; 8 La. 508.

Argued orally by M. Green, for appellant, and Percy R. Somerville, for appellee.

OPINION

WOODS, J.

This is an action on a policy of insurance, issued October 21, 1892, for $ 2,300, containing the stipulation that any loss that may be proven to be due Stein under the contract for insurance shall be payable to Tribette, the usee in the suit. At the date of the issuance of the policy Tribette held a mortgage made by Stein for $ 10,000, which embraced the property covered by the policy of insurance. The appellant knew of this mortgage, and "consented to it in the usual manner by putting a loss payable clause in the policy, payable to W. H. Tribette," to quote the language employed in the testimony of Drennan, the witness of the appellant on the trial, and the company's agent, who issued the policy of insurance sued on. The policy contained the usual conditions forbidding any increase of the risk by any means within the control of the assured, without the consent of the company indorsed on the policy, and forbidding any mortgage or other lien on the property insured, either before or...