Hardin v. Liverpool & London & Globe Ins. Co.

• Decision Date: 08 April 1925
• Docket Number: 292.
• Parties: HARDIN v. LIVERPOOL & LONDON & GLOBE INS. CO., LIMITED.
• Court: North Carolina Supreme Court

127 S.E. 353

189 N.C. 423

HARDIN v. LIVERPOOL & LONDON & GLOBE INS. CO., LIMITED.

No. 292.

Supreme Court of North Carolina

April 8, 1925

Appeal from Superior Court, Robeson County; Calvert, Judge.

Action by Richard Hardin against the Liverpool & London & Globe Insurance Company. Judgment of nonsuit, and plaintiff appeals. No error.

Failure to return or tender premiums upon notice of breach no waiver where policy not surrendered.

On August 26, 1921, the defendant issued to the plaintiff a certain policy of insurance covering his dwelling house situated on the east side of the Fayetteville road seven miles north of Lumberton. The policy was of the standard form (C. S. § 6437) and contained the statutory provisions, among which were these:

"This entire policy shall be void, unless otherwise provided by agreement in writing added hereto, (a) if the interest of the insured by other than unconditional and sole ownership or (b) if the subject of insurance be a building on ground not owned by the insured in fee simple; or (c) if, with the knowledge of the insured, foreclosure proceedings be commenced or notice given of sale of any property insured hereunder by reason of any mortgage or trust deed; or (d) if any change, other than by the death of an insured, take place in the interest title or possession of the subject of insurance (except change of occupants without increase of hazard); or (e) if this policy be assigned before a loss.

Unless otherwise provided by agreement in writing added hereto, this company shall not be liable for loss or damages occurring: (a) While the insured shall have any other contract of insurance, whether valid or not, on property covered in whole or in part by this policy, or (b) while the hazard is increased by any means within the control or knowledge of the insured.

No one has power to waive any provision or condition of this policy except such as by the terms of the policy may be the subject of agreement added hereto, nor shall any such provision or condition be waived unless the waiver is in writing added hereto, nor shall any provision or condition of this policy or any forfeiture be waived by any requirement, act or proceeding on the part of this company relating to appraisal or to any examination herein provided for; nor shall any privilege or permission affecting the insurance hereunder exist or be claimed by the insured unless granted herein or by the rider added hereto."

It contained, also, the usual provision in reference to the proof of loss.

At different dates the plaintiff executed deeds of trust on the property insured as follows: On September 17, 1920, a deed of trust to T. L. Johnson, trustee for H. J. Wessell, and on February 12, 1921, a deed of trust to Dickson McLean, trustee for R. D. Caldwell & Son, both of which were outstanding and uncanceled at the time the policy was issued. Without notice to the defendant, the plaintiff on December 27, 1921, executed an additional deed of trust to I. K. Biggs, trustee for K. M. Biggs, covering the same property.

The proof of loss signed by the plaintiff contained this paragraph:

"The property insured belonged to Richard Harden, and no other person or persons had any interest therein except. * * *"

At the close of the evidence, his honor announced that he would instruct the jury to return a negative answer to the issue, "Is the defendant indebted to the plaintiff?" Upon this intimation the plaintiff excepted, submitted to a nonsuit, and appealed.

F. Ertel Carlyle and McLean & Stacy, all of Lumberton, for appellant.

Johnson, Johnson & McLeod, of Lumberton, for appellee.

ADAMS J.

The defendant resisted recovery on the ground that the plaintiff at the time he procured the policy was not the sole and unconditional owner of the insured property, although in his proof of loss he made oath that no other person was interested in it. In his complaint the plaintiff declared on the contract of insurance, but in his reply to the answer he alleged that the defendant had waived the pleaded provision that the ownership of the property must be sole. The basis of the alleged waiver is laid in the plaintiff's testimony, the material part of which is substantially as follows:

"I told him (the agent) I would leave it absolutely to him for protection, and he wrote me a policy. He said he would put me in a company that would absolutely protect me from any loss by fire in any way. When I told him I would leave it absolutely with him what policy to write, he told me not to be uneasy; he would put me in a company that would protect me from any fire whatever; to rest easy. He didn't ask me about any mortgages whatever. * * * When the policy came back to me, I put it in my trunk. I am not an educated man. I am an Indian and can read a little bit, not good. I cannot understand the terms of the policy. I cannot read it well enough to tell what it was. I just thought it was all right. I relied upon the statements made to me by the agent of the insurance company that it would protect me. I never did read it over. I wouldn't understand the clause stating that the interest of the insurer would be 'unconditional sole ownership' would prevent me from giving a mortgage."

The plaintiff does not contend that the agent made any false representation which would avoid the policy, but rather that he waived the provisions of the written contract regarding the sole ownership of the property, and that the defendant for this reason is liable to the plaintiff for the loss he sustained.

The generally accepted definition of a "waiver" is the intentional relinquishment of a known right. It is a voluntary act and implies an election by the party to dispense with something of value or to forego some advantage which he might at his option have demanded and insisted on. 27 R. C. L. 904. In Manville Co. v. Building Co., 177 N.C. 103, 97 S.E. 718, it is said that a party cannot waive that of which he has no knowledge. It is also said that there are several essential differences between waiver and estoppel; that waiver involves both knowledge and intention, the one being essential to the other, and exists only where one with full knowledge of a material fact does or forbears to do some thing inconsistent with the existence of the right or of his intention to rely upon that right. Pages 106, 107 (97 S.E. 718). There is no evidence that the agent had any information of the outstanding deeds of trust, and the doctrine of waiver cannot be invoked on the ground that the defendant with knowledge of their existence issued the policy with intent to waive the requirement of sole ownership.

The plaintiff, however, rests his contention on another proposition. He argues that the agent negligently failed to make any inquiry as to the ownership of the land or as to any...