Havens v. Home Insurance Company
| Decision Date | 24 May 1887 |
| Docket Number | 12,527 |
| Parties | Havens v. The Home Insurance Company |
| Court | Indiana Supreme Court |
From the Grant Circuit Court.
The judgment is affirmed, with costs.
J. F McDowell, H. Brownlee, G. A. Henry, F. M. Finch and J. A Finch, for appellant.
B Harrison, W. H. H. Miller and J. B. Elam, for appellee.
This action was brought by Sarah Havens upon a policy of fire insurance issued to her by the Home Insurance Company of New York, on the 2d day of December, 1883. The insurance was for the period of one year, against loss or damage by fire, to the amount of $ 2,000, as follows: $ 1,500 upon the hotel buildings of the assured in Marion, Indiana, and $ 500 on her furniture and household goods therein. Among other stipulations the policy contained the following: "If the assured shall have or shall hereafter make any other insurance on the property insured, or any part thereof, without the consent of the company hereon written, * * * this policy shall be void." There was also the following stipulation in the policy: "The use of general terms or anything less than a distinct, specific agreement, clearly expressed and endorsed on this policy, shall not be construed as a waiver of any printed or written condition or restriction therein."
The first paragraph of the complaint alleged the execution of the policy, and that the property thereby insured had been destroyed by fire on the 30th day of November, 1884, and that due proof of loss had been made, etc. This paragraph contains the following averment:
The court below sustained a demurrer to this paragraph of the complaint.
The appellant's claim is, that the averments above set out in effect show that the insurance company agreed or consented that the assured might procure other insurance on the building, and that, having so consented, it is now estopped to assert that there has been a breach of the condition because the consent of the company was not endorsed on the policy. It is said the agreement amounted to a waiver of the condition requiring that the consent of the company to other insurance should be so endorsed.
Insurance policies are prepared by the companies, and contracts of insurance are usually consummated by experts on the one hand, and inexperts on the other. The policy of the law is, therefore, to give them such an interpretation as to prevent a forfeiture whenever upon principles of fair construction such a result is possible.
It is abundantly settled that, notwithstanding conditions in the policy, if at the time the insurance was effected, or afterwards, there were conditions, uses or incidents of the risk which were in conflict with conditions in the policy, and which were known to the insurer, or its agent, whose knowledge is imputable to the company, such conditions, uses, or incidents can not be used to defeat a recovery after a loss has occurred.
Issuing or continuing a policy of insurance, with full knowledge by the company of existing facts, which, according to a condition of the contract, make it voidable, is a waiver of the condition. If it were otherwise, the company would be enabled to perpetrate a fraud upon the assured. Home Ins. Co. v. Duke, 84 Ind. 253; AEtna Ins. Co. v. Shryer, 85 Ind. 362; Excelsior, etc., Ass'n v. Riddle, 91 Ind. 84; Indiana Ins. Co. v. Capehart, 108 Ind. 270, 8 N.E. 285.
Thus it has been held in a somewhat analogous case, notwithstanding an insurance policy contained printed stipulations almost identical with those above set out, in respect to obtaining other insurance, and in respect to matters which should not be construed as a waiver of any condition or restriction contained in the policy, yet, where an agent whose authority was not shown to have been restricted, inserted in the policy, "$ 3,000 other insurance permitted," and who was shown to have had knowledge that other insurance had been obtained, but conveyed to the insured the impression that the written consent of the company was not necessary, that the insurance company was estopped to dispute the validity of the additional insurance. Westchester Fire Ins. Co. v. Earle, 33 Mich. 143; Hadley v. Insurance Co., 55 N.H. 110; Pitney v. Glen's Falls Ins. Co., 65 N.Y. 6; American Ins. Co. v. Luttrell, 89 Ill. 314.
The tendency of the modern cases is to hold that, if notice be duly given to the company or its agent of additional insurance, or if actual knowledge is brought home that other insurance exists, or has been obtained, and no objection is made, the company will be estopped from insisting on a forfeiture because its consent was not endorsed on the policy. Wood Fire Ins., sections 382, 383; May Ins., sections 369, 370. Having knowledge of the other insurance, the company may manifest its dissent by cancelling its policy; otherwise it will be treated as having assented, and waived compliance with the condition.
This does not deny to insurance companies the right to impose conditions upon which they will assume risks; it does nothing more than to prevent them from taking advantage of conditions, when they have full knowledge of incidents and facts connected with the risk, which are inconsistent with the conditions imposed. It should be observed that the authorities make a distinction in this regard between mutual insurance companies, whose charters require that the consent of the company shall be endorsed on the policy in respect to certain matters, and such companies as regulate the subject-matter under consideration by contract merely.
The principles relied on, although abundantly supported, as controlling in cases somewhat analogous to this, do not reach the necessities of the appellant's case. The case made by the first paragraph of the complaint proceeds upon the theory that another valid policy of insurance had been taken out by the assured in the Phenix Insurance Company of Brooklyn, New York, after the issuance of the policy in suit, and before the destruction of the property by fire. It seeks to avoid the effect of the condition providing for a forfeiture of the policy, by the averment that it was agreed that the plaintiff should have permission to take out additional insurance, to the amount of $ 1,000, in any company, and at any time she desired to do so, and that the company agreed to insert such a stipulation in the policy, but wholly failed to insert the stipulation as agreed. It does not appear when this agreement was made, whether before or after the execution of the policy. If it was made before, it does not appear that the appellant was induced to accept the policy without full knowledge that the stipulation was absent, nor does the complaint ask for a reformation of the contract. The appellant argues that a fair reading of the contract leads to the conclusion that it was made subsequent to the issuing of the policy. If this be conceded, it in no wise helps the appellant.
If it were admitted that the oral agreement relied on was valid, it effects no substantial modification of the original contract. In any event, permission to take other insurance was to be in writing. Such permission could only have been given by the assured presenting the policy to the company or its agent, and requesting that the stipulation be written in or upon the policy.
After its execution the policy was presumably in the possession of the assured. It does not appear that she ever requested that the stipulation orally agreed upon should be inserted, or that the company or its agent ever had any notice that she had taken, or desired to take, additional insurance. The company was,...
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