German Insurance Company of Freeport, Illinois v. Shader

• Decision Date: 17 February 1903
• Docket Number: 12,824
• Citation: 93 N.W. 972,68 Neb. 1
• Parties: GERMAN INSURANCE COMPANY OF FREEPORT, ILLINOIS, v. ARTHUR L. SHADER
• Court: Nebraska Supreme Court

93 N.W. 972

68 Neb. 1

GERMAN INSURANCE COMPANY OF FREEPORT, ILLINOIS, v. ARTHUR L. SHADER

No. 12,824

Supreme Court of Nebraska

February 17, 1903

ERROR to the district court for Lancaster county: EDWARD P. HOLMES DISTRICT JUDGE. Affirmed.

Affirmed.

Lionel C. Burr, Charles L. Burr and Frank A. Boehmer, for plaintiff in error.

Halleck F. Rose and Wilmer B. Comstock, contra.

POUND C. BARNES and OLDHAM, CC., concur.

OPINION

POUND, C.

On a former occasion a judgment for the plaintiff in this cause was reversed for the reason that the trial court permitted him to show waiver of conditions in a policy of insurance upon a reply which only denied that there had been any breach. ^[*] Upon a new trial, a verdict for the plaintiff was again rendered, and the insurance company has come to this court on error a second time.

The principal errors assigned are the admission of parol evidence as to waiver of conditions in the policy notwithstanding a provision that no agent should have power to waive such conditions otherwise than by a written indorsement, and certain instructions whereby the question as to waiver was left to the jury. It is also claimed that the amendments whereby plaintiff was allowed to set up waiver of the conditions in the policy state a new and distinct cause of action, upon which the statute of limitations had run, within the purview of the decision in Buerstetta v. Tecumseh Nat. Bank, 57 Neb. 504, 77 N.W. 1094; that the verdict is contrary to the evidence; that plaintiff's counsel were guilty of prejudicial misconduct, and that the trial court erred in instructing the jury to "do substantial justice" by their verdict.

We are satisfied that the case of Buerstetta v. Tecumseh Nat. Bank, supra, has no application. In pleading performance of conditions precedent under section 128, Code of Civil Procedure, a plaintiff may safely assume that conditions which have been waived will not be relied upon, and allegations of waiver to meet a defense based on such conditions are not inconsistent with the statutory allegation that all conditions on his part have been duly performed. Levy v. Peabody Ins. Co., 10 W.Va. 560, 27 Am. Rep. 598. Hence it was entirely proper to set up the waiver in reply, and there would have been no departure from the cause of action set up in the petition had this course been taken. Jacobs v. St. Paul Fire & Marine Ins. Co., 86 Iowa 145, 53 N.W. 101; Standard Accident Ins. Co. v. Friedenthal, 1 Colo.App. 5, 27 P. 88; American Central Ins. Co. v. McLanathan, 11 Kan. 533; Virginia Fire & Marine Ins. Co. v. Saunders, 86 Va. 969, 11 S.E. 794. It could make no substantial difference if the plaintiff preferred to anticipate the defense and set up waiver in the petition. He did not change his cause of action by substituting allegations of waiver for the general denial.

The question as to admissibility of the evidence objected to has been before the court in various phases in a number of cases, and, if we may rely upon past adjudications, has been completely determined. Slobodisky v. Phenix Ins. Co., 53 Neb. 816, 74 N.W. 270; Pythian Life Ass'n v. Preston, 47 Neb. 374, 66 N.W. 445; Hartford Fire Ins. Co. v. Landfare, 63 Neb. 559, 88 N.W. 779; Hunt v. State Ins. Co., 66 Neb. 121, 125, 92 N.W. 921, and cases cited. But in a number of cases which have come before us recently, as well as in the case at bar, the prior decisions of this court on the subject of insurance have been assailed vigorously, and it has been asserted that the court has taken positions at variance both with principle and authority. The recent decision of the supreme court of the United States in Northern Assurance Co. v. Grand View Building Ass'n, 183 U.S. 308, 22 S.Ct. 133, 46 L.Ed. 213, is chiefly relied upon in this connection, and that case has been urged upon our attention so persistently of late that it seems proper to state the reasons moving us to adhere to the course of decision long established in this jurisdiction, notwithstanding the great authority of the tribunal which has adopted a different doctrine.

The general rule that an insurance company can not take advantage of conditions in a policy whereby such policy is to be void by reason of circumstances existing at the time the policy issued, in case the facts were known to its agent at the time, has been recognized universally. More recently insurance companies have sought to avoid the consequence of this well established rule by provisions to the effect that the conditions of the policy could be waived only by written indorsement, and by clauses in which agents are forbidden to waive any of the conditions of the policy in any other manner. Notwithstanding provisions of this type, an overwhelming majority of the state courts have continued to apply the rule that an insurance company can not set up that a policy issued by its agent with knowledge of the facts was void when it was issued, by reason of facts which he well knew. Including our own court, the courts of some twenty-seven states, at least, have, upon one ground or another, adhered to this doctrine in the face of these provisions as to waiver. Wood v. American Fire Ins. Co., 149 N.Y. 382, 44 N.E. 80, 52 Am. St. Rep. 733; Berry v. American Central Ins. Co., 132 N.Y. 49; 30 N.E. 254, 28 Am. St. Rep. 548; Blass v. Agricultural Ins. Co., 162 N.Y. 639, 57 N.E. 1104; Breedlove v. Norwich Union Fire Ins. Society, 124 Cal. 164, 56 P. 770; Kruger v. Western Fire & Marine Ins. Co., 72 Cal. 91, 13 P. 156, 1 Am. St. Rep. 42; Crouse v. Hartford Fire Ins. Co., 79 Mich. 249, 44 N.W. 496, 44 N.W. 496; Improved-Match Co. v. Michigan Mutual Fire Ins. Co., 122 Mich. 256, 80 N.W. 1088; Lamberton v. Connecticut Fire Ins. Co., 39 Minn. 129, 39 N.W. 76, 1 L.R.A. 222; Anderson v. Manchester Fire Assurance Co., 59 Minn. 182, 63 N.W. 241, 28 L.R.A. 609, 50 Am. St. Rep. 400; Reaper City Ins. Co. v. Jones, 62 Ill. 458; John Hancock Mutual Life Ins. Co. v. Schlink, 175 Ill. 284, 51 N.E. 795; Phenix Ins. Co. v. Caldwell, 187 Ill. 73, 58 N.E. 314; Bartlett v. Fireman's Fund Ins. Co., 77 Iowa 155, 41 N.W. 601; Western Assurance Co. v. McAlpin, 23 Ind.App. 220, 55 N.E. 119, 77 Am. St. Rep. 423; Hobkirk v. Phoenix Ins. Co., 102 Wis. 13, 78 N.W. 160; Trustees of St. Clara Female Academy v. Northwestern National Ins. Co., 98 Wis. 257, 73 N.W. 767; Cole v. Union Central Life Ins. Co., 22 Wash. 26, 60 P. 68, 47 L.R.A. 201; Hart v. Niagara Fire Ins. Co., 9 Wash. 620, 38 P. 213, 27 L.R.A. 86; Thackery Mining & Smelting Co. v. American Fire Ins. Co., 62 Mo.App. 293; Flournoy v. Traders' Ins. Co., 80 Mo.App. 655; Parsons v. Knoxville Fire Ins. Co., 132 Mo. 583, 34 S.W. 476; McGonigle v. Susquehanna Mutual Fire Ins. Co., 168 Pa. 1, 31 A. 868; Insurance Co. v. National Bank, 88 Tenn. 369, 12 S.W. 915; Hartford Fire Ins. Co. v. Keating, 86 Md. 130, 38 A. 29, 63 Am. St. Rep. 499; Pope v. Glens Falls Ins. Co., 130 Ala. 356, 30 So. 496; Western Assurance Co. v. Phelps, 77 Miss. 625, 27 So. 745; Home Ins. Co. v. Gibson, 72 Miss. 58, 17 So. 13; Gandy v. Orient Ins. Co., 52 S.C. 224, 29 S.E. 655; Wilson v. Commercial Union Assurance Co., 51 S.C. 540, 29 S.E. 245, 64 Am. St. Rep. 700; Cowell v. Phoenix Ins. Co., 126 N.C. 684, 36 S.E. 184; London & Lancashire Fire Ins. Co. v. Gerteson, 51 S.W. 617; Niagara Fire Ins. Co. v. Johnson, 4 Kan.App. 16, 45 P. 789; German Ins. Co. v. Gray, 43 Kan. 497, 23 P. 637, 8 L.R.A. 70, 19 Am. St. Rep. 150; Spalding v. New Hampshire Fire Ins. Co., 52 A. 858; Hilton v. Phoenix Assurance Co., 92 Me. 272, 42 A. 412; German-American Ins. Co. v. Humphrey, 62 Ark. 348, 35 S.W. 428, 54 Am. St. Rep. 297; Pennsylvania Fire Ins. Co. v. Faires, 13 Tex. Civ. App. 111, 35 S.W. 55; Phenix Ins. Co. v. Searles, 100 Ga. 97, 27 S.E. 779; American Central Ins. Co. v. Donlon, 66 P. 249; Farmers' & Merchants' Ins. Co. v. Nixon, 2 Colo.App. 265, 30 P. 42; Kahn v. Traders' Ins. Co., 4 Wyo. 419, 34 P. 1059, 62 Am. St. Rep. 47; Osborne v. Phenix Ins. Co., 64 P. 1103.

In some jurisdictions it is held that the conditions restricting the power of the agent to waive provisions of the policy have no reference to conditions in the policy avoiding the contract in its inception. Wood v. American Fire Ins. Co., 149 N.Y. 382, 44 N.E. 80, 52 Am. St. Rep. 733; Continental Ins. Co. v. Ruckman, 127 Ill. 364, 20 N.E. 77, 11 Am. St. Rep. 121; Rickey v. German Guarantee Town Mutual Fire Ins. Co., 79 Mo.App. 485; Crouse v Hartford Fire Ins. Co., 79 Mich. 249, 44 N.W. 496. Courts taking this view hold that the provision as to waiver only limits the power of the agent to waive conditions of the policy after it attaches, and not the power of the agent to make a contract in the first instance. Other courts hold that a provision against waiver otherwise than in writing may itself be waived, and that this waiver may be oral. Phenix Ins. Co. v. Hart, 149 Ill. 513, 36 N.E. 990; German Ins. Co. v. Gray, 43 Kan. 497, 23 P. 637, 8 L.R.A. 70, 19 Am. St. Rep. 150; Orient Ins. Co. v. McKnight, 197 Ill. 190, 64 N.E. 339; German-American Ins. Co. v. Humphrey, 62 Ark. 348, 35 S.W. 428, 54 Am. St. Rep. 297; Western Assurance Co. v. Williams, 94 Ga. 128, 21 S.E. 370; Pennsylvania Fire Ins. Co. v. Faires, 13 Tex. Civ. App. 111, 35 S.W. 55; Kahn v. Traders' Ins. Co., 4 Wyo. 419, 34 P. 1059, 62 Am. St. Rep. 47. This court took the same position in Hartford Fire Ins. Co. v. Landfare, 63 Neb. 559, 88 N.W. 779. Other courts hold that such a provision is invalid on the ground that it is in effect a limitation of the power of the corporation itself to waive provisions in its own contracts, since the corporation can act only through agents. Lamberton v. Connecticut Fire Ins. Co., 39 Minn. 129, 39 N.W. 76, 1 L.R.A. 222. In other jurisdictions, the position is taken that issuance and delivery of the...