E.H. Emery & Co. v. American Ins. Co. of Newark

• Decision Date: 29 June 1916
• Docket Number: 30663
• Citation: 158 N.W. 748,177 Iowa 4
• Parties: E. H. EMERY & COMPANY, Appellee, v. AMERICAN INSURANCE COMPANY OF NEWARK, Appellant
• Court: Iowa Supreme Court

158 N.W. 748

177 Iowa 4

E. H. EMERY & COMPANY, Appellee, v. AMERICAN INSURANCE COMPANY OF NEWARK, Appellant

No. 30663

Supreme Court of Iowa, Des Moines

June 29, 1916

Appeal from Wapello District Court.--FRANCIS M. HUNTER, Judge.

THIS action was brought by plaintiff, a copartnership, against the defendant, to recover upon a policy of insurance the sum of $ 708.53, with interest, for damage by fire which occurred on the 7th day of August, 1912, by the destruction of property described in the policy. A jury was waived and the case tried to the court upon an agreed statement of facts, with a small amount of oral testimony. The court held that there was no concurrent insurance which covered any part of the property described in the defendant's policy, and upon this holding rendered judgment against the defendant for the amount agreed upon as the loss on the property, to wit, $ 708.53, with interest. The defendant admitted liability to the amount of $ 358.94, and offered to allow judgment to go against it for that amount. The appeal is by defendant from the judgment rendered, or, as appellant puts it, the excessive portion of it.

Affirmed.

McNett & McNett, for appellant.

Chester W. Whitmore and Tisdale & Heindel, for appellee.

PRESTON J. EVANS, C. J., DEEMER and GAYNOR, JJ., concur.

OPINION

PRESTON, J.

The petition declared upon a policy in defendant company which covered the property hereinafter described. The answer admitted the issuance of the policy, the fire and the destruction of the property of the kind described, to the amount claimed, to wit, $ 708.53. No question as to the validity of the policy, the occurrence of the fire, nor proofs of loss, nor amount of loss, is involved. The defense set up in the answer is that defendant was a concurrent insurer upon a portion of the property described and destroyed by fire, and that, to the extent that it was a concurrent insurer, it was only liable for its pro rata share of the loss. As appellant states it, the dispute arises upon whether a portion of the property covered by the policy in suit was also covered by the other insurance policies issued by other companies to the assured.

1. E H. Emery, a member of the plaintiff firm, testified over objection substantially as follows:

"I negotiated with Ernest A. Baer, representing the defendant company, in procuring the insurance issued by the defendant. I saw Mr. Baer on the premises and gave him the insurance. I told him I had embarked in the ice cream business; that because my present policies in force on the fruit and vegetable business did not cover this department of the business we were engaging in, I dictated to him the form to be used. He thereafter delivered the policy to me."

Plaintiff then offered as the evidence of the witness that part of the supplement to agreed statement of facts, wherein it is agreed that E. H. Emery will testify as follows:

"That, at the time each of the aforesaid policies of insurance (except the policy sued upon in this case), was written and took effect, plaintiff was not engaged in the manufacture and sale of ice cream and had no ice cream department and had none of the personal property described in and insured by policy of insurance sued upon in this case, and had or owned no property of like kind or description, and no personal property of like kind or description was kept or situated in or about the premises described in said several policies of insurance (except the policy sued upon) at the time each of them was issued and took effect."

All of this was objected to by defendant as immaterial, and as incompetent because it tended to vary and contradict the terms of the written contract sued upon, and in respect to the kinds and character and classes of property insured and covered by the policy, and also in respect to the description of the kind and character of the property insured by other policies which existed at the time of the insurance of the policy in question, and because there is nothing in the language of the policy in question which describes the kind and character of property covered thereby, and in the policies referred to in the pleadings and stipulation, which justifies the introduction of parol evidence. The objection was overruled, and some of the assignments of error relate to such ruling.

Appellant cites Kelsey v. Continental Casualty Co., 131 Iowa 207, 108 N.W. 221, Phillipy v. Homesteaders, 140 Iowa 562, 118 N.W. 880, Marsh v. Concord Mut. Fire Ins. Co., 71 N.H. 253 (51 A. 898), Union Mut. Life Ins. Co. v. Mowry, 96 U.S. 544, 24 L.Ed. 674, upon the proposition that no party to an insurance risk can be allowed to testify either what his understanding was or what he was told by the agent in respect to the construction and interpretation of his contract of insurance. And, further, that, in the absence of fraud or mutual mistake, no representation, promise, or agreement made, or opinion expressed in the previous parol negotiations as to the terms or legal effect of the resulting written contract, can be permitted to prevail either in law or in equity over the plain provisions and proper interpretation of the contract. In support of the last proposition, appellant cites Connecticut Fire Ins. Co. v. Buchanan, 141 F. 877; Lumber Underwriters of N. Y. v. Rife, 237 U.S. 605 (59 L.Ed. 1140, 35 S.Ct. 717); Kelsey v. Continental Casualty Co., 131 Iowa 207, 209, 108 N.W. 221--12; Doolittle v. Murray, 134 Iowa 536, 546, 554, 111 N.W. 999; Marsh v. Concord Mut. Fire Ins. Co., 71 N.H. 253 (51 A. 898, 899); Iowa Business Men's Bldg. & L. Assn. v. Fitch, 142 Iowa 329, 331, 120 N.W. 694--2; Union Mut. Life Ins. Co. v. Mowry, 96 U.S. 544 (24 L.Ed. 674, 5); Deming Inv. Co. v. Shawnee Fire Ins. Co. (Okla.), 16 Okla. 1, 83 P. 918, 922, 923; Liverpool & L. & G. Ins. Co. v. Richardson Lumber Co. (Okla.), 11 Okla. 579, 69 P. 936, 937; Sanders v. Cooper, 115 N.Y. 279 (22 N.E. 212, 213); Fawkner v. Smith Wall Paper Co., 88 Iowa 169, 173, 55 N.W. 200; Congower v. Equitable Mut. Life & Endowment Assn., 94 Iowa 499, 503, 63 N.W. 192--5; Sleight v. Mystic Toilers, 121 Iowa 724, 728, 96 N.W. 1100--9.

Appellee does not dispute the propositions of appellant just stated, but contends that the cases do not apply to the facts in the instant case, because in each of the cases cited the writing was full, clear and explicit, and presented no occasion to inquire into the sense and meaning of the terms used.

There is no question about the rule, but there are many exceptions. We think the evidence is competent to show the surrounding circumstances; that the court may read the policy in the same light the parties did, to ascertain their object and see in what sense they made use of the words, and as tending to explain the ambiguity created by the use of the language in the different descriptions in the policies and the riders thereto, appellant's contention being that the different descriptions mean the same thing; also, to identify the subject-matter. It is contended by appellee that the evidence was admissible for the further reason that it is competent to show that the policy in suit was delivered upon the condition and understanding that it cover the ice cream department alone, and that the other policies did not cover such property, and that it would, therefore, be a fraud for the defendant company, having received a premium upon such understanding, to repudiate its actual agreement.

Appellee cites many cases upon the first proposition, among them the following Iowa cases: Miller v. Mutual Benefit Life Ins. Co., 31 Iowa 216, 223; Boetcher v. Hawkeye Ins. Co., 47 Iowa 253; Williams v. Niagara Fire Ins. Co., 50 Iowa 561, 568; Jordan v. State Ins. Co., 64 Iowa 216, 19 N.W. 917; Eggleston v. Council Bluffs Ins. Co., 65 Iowa 308, 316, 21 N.W. 652; Thompson v. Locke, 65 Iowa 429, 21 N.W. 762; Stone v. Hawkeye Ins. Co., 68 Iowa 737, 742, 28 N.W. 47; Miller v. Hartford Fire Ins. Co., 70 Iowa 704, 29 N.W. 411; Erb v. Fidelity Ins. Co., 99 Iowa 727, 69 N.W. 261; Biermann v. Guaranty Mut. Ins. Co., 142 Iowa 341, 346, 120 N.W. 963; Cedar Rapids Nat. Bank v. Carlson, 156 Iowa 343, 136 N.W. 659; also Browne on Parol Evidence, Sec. 179; 2 Elliott on Contracts, Secs. 1655, 1508, 1657, 1659, 1517, 1519, 1514, 1515; 9 Encyc. of Evidence, page 370. Some of these cases are to the proposition that, when a soliciting insurance agent issues a policy, having personal knowledge of the conditions of the risk, the company is bound by his knowledge, and that the company will be held to have entered into the contract, having in mind the conditions as they were actually known to the agent, and that parol evidence is admissible to show the knowledge possessed by the agent of the conditions surrounding the risk at and before the time of the issuance of the policy.

On the second proposition, as to the alleged ambiguity, they cite Davis v. Anchor Mut. Fire Ins. Co., 96 Iowa 70, 64 N.W. 687; Eggleston v. Council Bluffs Ins. Co., supra.

On the third proposition, as to the identity of the subject-matter, they cite 1 Elliott on Evidence, Secs. 568, 584, 597, 598, 601, 602; Jones on Evidence (2d Ed.), pages 572, 573; Eggleston v. Council Bluffs Ins. Co., supra.

On the last proposition, they cite Wells v. Hocking Valley Coal Co., 137 Iowa 526, 114 N.W. 1076; Sutton v. Griebel, 118 Iowa 78, 91 N.W. 825; McCaskey Register Co. v. Hall, 140 Iowa 87, 117 N.W. 1124; Ware v. Allen, 128 U.S. 590, 32 L.Ed. 563, 9 S.Ct. 174.

The Eggleston case, supra, is also cited to the proposition that no prayer for reformation was necessary to make the evidence competent. The argument of the appellee is that the evidence is admissible to explain the meaning of the terms "merchandise" and "furniture and fixtures," as used by the parties;...