Grier v. Northern Assurance Co.

• Decision Date: 03 January 1898
• Docket Number: 322
• Citation: 39 A. 10,183 Pa. 334
• Parties: J. W. Grier, C. E. Grier and J. C. Grier, trading as Grier Brothers, v. Northern Assurance Company, Appellant
• Court: Pennsylvania Supreme Court

39 A. 10

183 Pa. 334

J. W. Grier, C. E. Grier and J. C. Grier, trading as Grier Brothers, v. Northern Assurance Company, Appellant

No. 322

Supreme Court of Pennsylvania

January 3, 1898

Argued April 19, 1897

Appeal, No. 322, Jan. T., 1896, by defendant, from judgment of C.P. Clearfield Co., Sept. T., 1894, No. 355, on verdict for plaintiffs. Reversed.

Assumpsit upon a policy of fire insurance. Before SAVIDGE, P.J., of the 8th judicial district, specially presiding.

The facts appear by the opinion of the Supreme Court.

The court charged in part as follows:

[Now speaking of the case against the Northern Assurance Company directing your attention just for the moment to that and to this particular question of the withdrawal of the power of this agent to make settlement for them, which power had been in the beginning lodged with him, I say that in my judgment the correspondence between the parties, which appears to be the only evidence on the question, shows a withdrawal of the power to make settlement by that company. If you find that he informed the insured, Grier Brothers, that he did represent that company, and had power to make settlement for them at a time when he in fact did represent them, and did in fact have that power, any settlement thereafter made by him for the company, in adjustment of this claim, would be binding upon the company, unless Grier Brothers knew that his power to make that settlement had been canceled by the company or withdrawn from him. So that, if you find that he afterwards did make settlement with Grier Brothers for the Northern Assurance Company, and that Grier Brothers did not know that he had no longer the right to make this settlement for them did not know this power had been withdrawn, that settlement would be binding upon the company, and the company would have to stand by it.] Much that I have said with regard to this case applies as well to the other cases against the Armenia Insurance Company; the evidence as to the withdrawal of his authority to represent that company rests in parol. Mr. Kuester testified that when he communicated with them, and informed them of the fact that he had discovered that dynamite and explosives had been kept on the premises, and therefore the policies had been vitiated, they directed him to make no settlement; they informed him the case could not be adjusted and settled; that they would make defense to the claim on the ground that it had been vitiated; the policies had been vitiated by the act of the assured. Well, if the company did that (and that is a matter for you to determine), if they so informed the agent, and instructed him he should not settle, and took away the right for him to make these settlements, (and you say under the evidence of the case whether that is so or not, remembering, however, that there is no testimony to the contrary, and that Mr. Kuester swears that they did so instruct him) if they did that, -- this company did that, -- he no longer had the right and power to settle for them, and any settlement made by him with Grier Brothers would not be binding upon the company, provided Grier Brothers knew of this withdrawal of the right to make settlement. If they settled with him in good faith, believing that he still had authority to represent the company, and had not been informed to the contrary, the settlement would be binding upon the company. Where a principal lodges with an agent authority to do a certain thing, to act within a certain scope, and that principal deals with a third party as agent under such authority, with information to the party of his agency, which in fact existed at the time the information was given, if the authority be afterwards withdrawn, and notice of that withdrawal be not brought home to such third party, the agent still continues to deal for his principal, and what he does will bind that principal. Now, I think you understand clearly that question; that is the law of the question. With the facts I have nothing whatever to do; those are wholly for you. Jurors deal with facts and determine the questions arising therefrom, and settle them according to the weight of the testimony, taking the law applicable to those facts from the court. I am responsible for the law, you are responsible for the facts. You are bound to take the law as given to you by the court, and with the facts it is not my purpose to interfere, as indeed I have no right.

These suits you will understand, probably have from the beginning understood, are not brought upon the original contract; that is, they are not claiming upon the policies of insurance, Grier Brothers are not. Were they so claiming, the fact, if it appeared to your satisfaction, that dynamite had been kept upon the premises, or powder in quantities prohibited, would defeat their claim; the policies formed the contract between the parties, and both parties were bound by their terms. When people make contracts they must live up to the terms of those contracts. Those contracts constitute the law as between them, and if in any material matters they fail to perform the terms of their contracts, and vitiate and avoid them, such contracts as these in question, there could be no recovery thereon. So that were these suits upon the original contracts, upon the policies of insurance, the fact, if it be a fact, and I don't understand it is seriously contended it is not a fact, the fact that dynamite was kept upon the premises would prevent their recovery; and if the cases were in that shape I would be obliged to say to you, as a matter of law, there could be no recovery. But these actions are not upon the contracts; they are not upon the policies; but are brought upon an alleged subsequent agreement; an alleged agreement of settlement. Now, the companies had full power to waive the conditions and terms of those contracts, and notwithstanding there may have been powder and dynamite and explosives kept on the premises, the companies had the right to say, when a loss occurred, we will overlook the breach of contract on the part of the assured; we will waive our right to contest these cases or these claims, because of the fact that the assured had violated the contracts, and voided them by keeping explosives and powder upon the premises; we will overlook that, and we will settle and pay the claims notwithstanding. [That is what is contended by the plaintiffs was done in this case, in these cases; that this insurance agent, this adjusting agent, agreed to a settlement of the claims, and thereby there was a waiver of the right to take advantage of the forfeiture of the contracts or policies, or alleged forfeiture of the contracts and policies by Grier Bros. You are to determine under all the evidence in the case whether this settlement took place as contended, having first determined what authority or right or power this agent (Kuester) had to make the settlement, and if the authority or power had been withdrawn, (as it was in the Northern Assurance case, and as it probably had been in the others) whether that was made known to Grier Bros.; if the authority had been withdrawn, and Grier Bros. knew it, then any settlement or pretended settlement he made would not be binding upon the company. But if he made such settlement, as contended for by the plaintiffs, and Grier Bros. were not informed, and did not know that he had no authority to make it on behalf of the company, then, as I have said to you two or three times, the settlement would be binding upon the defendant, and the plaintiffs ought to recover according to its terms.] So you see it is a very important question, as important as any other in this case, and one which will no doubt give you considerable concern, and which you may have some difficulty in determining, namely, whether there was a settlement; did a settlement take place between this agent and Grier Bros.? That most, if not all, the other companies settled is a conceded fact in the case. There were negotiations on or about the 3d, 4th or 5th of April, or during those days, looking towards settlement of this loss; the negotiations were had between several adjusting agents, representing various companies having policies upon the building and stock and machinery.

[It is contended by the plaintiffs that they were unwilling to settle any of the claims, unless all were settled; that they were unwilling to run the risk of lawsuits with one party and settle with another for, as they contend, less than the legitimate claim they had against the insurance companies, and they claim that they refused to make settlement with any unless there was settlement made with all, and they say that Kuester consented to and did settle for the companies he represented, including the Armenia and the Northern of London. You remember the Northern policy was upon the building, $2,000, and one of the Armenia policies was upon the building for $1,000, and the other was upon the goods for $1,000. It is claimed that the settlement of the policy or of the loss upon the goods was fixed at sixty-six and two thirds per cent of the amount of the face of the policy, and that the settlement of the other claims on the other two policies was effected at face value of the policies.]

[Did Kuester agree to a settlement of those claims? Was it understood when he left in April that the claims were adjusted and settled? Did the minds of the parties come together? Did he understand it, and did they understand it? Was there an understanding between them that these policies were to be paid according to the terms of the contract, as the plaintiffs claim it to have been made. If so, then the company is bound to pay; they have waived their rights by that contract made through their agent to contest these claims on account of the...