Home Fire Insurance Company v. Wilson

• Decision Date: 10 May 1915
• Docket Number: 381
• Citation: 176 S.W. 688,118 Ark. 442
• Parties: HOME FIRE INSURANCE COMPANY v. WILSON
• Court: Arkansas Supreme Court

176 S.W. 688

118 Ark. 442

HOME FIRE INSURANCE COMPANY v. WILSON

No. 381

Supreme Court of Arkansas

May 10, 1915

Appeal from Columbia Circuit Court; C. W. Smith, Judge; affirmed.

Judgment affirmed.

Wynne & Harrison, for appellant.

1. The vacancy of the building avoided the policy ipso facto. 109 Ark. 324; 2 Clements on Fire Insurance, 367; 5 So. 768; 42 N.W. 630; 65 Kans. 373; 69 P. 345; 69 S.W. 42; 27 Id. 122.

2. The local agent had no authority to waive an express provision of the policy. 19 Cyc. 782; 22 P. 1010; 7 N.Y.S. 589.

3. Appellees were bound by the limitations upon the agent's authority as stipulated in the policy. 2 Clements on Fire Ins., p. 487; 133 N.Y. 356; Ostrander on Fire Ins., p. 192 § 56; 70 Wise. 1; 35 N.W. 34; 54 Ark. 75; 26 So. 655; 43 N.W. 810; 120 Ga. 247; 66 Mo.App. 29; 32 S.W. 582.

4. There was no expressed nor implied waiver of the provisions of the policy against vacancy. 87 Ark. 327; 86 Ala. 424.

5. Rhea was appellees' agent. 109 Ark. 324; 109 Id. 330.

6. The parol agreement, if any existed, between appellees and the agent will not be enforced and no estoppel arises therefrom. Ostrander on Fire Ins., p. 749; 37 Mich. 613; 111 Ind. 90; Bigelow on Estoppel, (2 ed.) 438; 96 U.S. 544; Ostrander on Fire Ins. 750-751.

7. There was no waiver of the forfeiture by reason of the failure to return the unearned premium. 87 Ark. 327.

C W. McKay, for appellees.

1. The agent had the authority and power to waive the forfeiture. 109 Ark. 324; 63 Id. 187; 62 Id. 348; 71 Id. 242; 88 Id. 506. Notice to the agent was notice to the principal. Ibid. The waiver may be oral. 88 Ark. 507.

2. As the insurer had knowledge of the forfeiture before the loss and failed to return, or offer to return the unearned premium, a waiver resulted. 19 Cyc. 798; 45 N.W. 708; 141 S.W. 15; 110 Id. 604; 68 S.W. 889; 100 Am. St. 382; 50 N.E. 772; 12 Id. 137; 77 Id. 141; 36 Id. 990; 32 Id. 429; 65 Am. St. 717; 74 N.E. 964.

3. The insurer, through its agent, assured appellees that the insurance was in force, after knowledge of the forfeiture and before the loss. This is an affirmative act and amounts to a waiver. Cases supra. 87 Ark. 326; 109 Id. 324.

OPINION

SMITH, J.

This is the second appeal of this case. For opinion on the former appeal see Home Fire Ins. Co. v. Wilson, 109 Ark. 324, 159 S.W. 1113.

As appears from the statement of facts in the opinion on the former appeal, appellees bought a house and lot upon which there was at the time an outstanding policy of insurance in favor of their vendor, but by and with the consent of one John Rhea, who was appellant's agent at McNeill, Arkansas, the policy was transferred to appellees. It further appears that appellant's agent was also a rental agent, and that the house in question was listed with this agent for rent. Upon the former trial the cause was tried upon the theory that this agent had been requested to and had agreed to act for appellees, not only in renting this property, but in keeping it insured, and had agreed, at the time it was listed with him, to take whatever action might be necessary to continue the policy in effect. It was said, however, upon the former appeal that this agreement constituted Rhea the agent of the insured, and that in the performance of this agreement he was not acting as the agent of the insurer. And it was further held that this agent could not, by an executory agreement to take some future action, waive any of the conditions of the policy.

Discussing the effect of this agreement it was there said: "But an agent's executory agreement to waive future breaches, if any should occur, is not enforceable, for such an agreement is not a waiver of the effect of an existing condition, but is an amendment to the extent of such an agreement, of the terms of the written contract between the parties, evidenced by the policy of insurance. The understanding between appellees and Rhea, when given the highest effect of any inference that can be drawn from the conversation between them, is no more than an executory contract to keep appellees' insurance in effect, and to do whatever may be necessary for that purpose."

Under the record as then made, we held that judgment had been erroneously rendered against the insurance company, and the judgment was reversed and the cause remanded for a new trial.

Upon the remand of the case a trial was had before the court, sitting by consent as a jury, and the evidence at this trial was substantially the same as at the first trial with this important exception. Mr. Grayson testified that after the property became vacant the notified the agent of the appellant company of this vacancy, and he was at the time assured by the agent that the insurance was all right and the policy was in force and he would keep it in force. He testified further that he notified Mr. Rhea of the vacancy so that he might look after the insurance, and that Mr. Rhea told him the policy was in force. Mr. Wilson testified to substantially the same facts, and they were not contradicted by the agent, who was present and testified at the trial.

We need not discuss appellees' failure to make this proof at the former trial. The truthfulness of this statement was passed upon by the trial court, and the finding there made is conclusive upon us.

A different question is presented by the record in this case from the one decided upon the former appeal. It was shown at both trials that Mr. Rhea possessed all of the power and authority ordinarily possessed by local agents; that he was furnished by the company with blank applications, and with policies duly signed by its officers; that he had full authority to issue these policies, which were not valid until countersigned by him as agent of the company; that he had issued and counter-signed the policy sued on; that he had full authority to consent to the transfer of policies, and did consent to the transfer of this policy from appellees' vendor to appellees; that he collected premiums and was authorized to cancel policies, and did cancel policies, and was authorized to issue vacancy permits, which were subject only to the right of the company to ratify or cancel.

Upon the former appeal we decided that the agent could not, by an executory agreement on his part, change or modify the written conditions contained in the policy, and further, that in any agreement upon his part to thereafter take the necessary action to continue a policy in effect he was thereby stating as the agent of the owner and not as the agent of the insurer. But it has also been frequently held that an agent possessed of the authority vested in Rhea can waive the conditions of the policy. In the case of Commercial Fire Ins. Co. v. Belk, 88 Ark 506, 115 S.W. 172, it was said: "Koeningstein was the agent of the defendant, and was entrusted with blank policies signed by the defendant with power and authority to solicit insurance, and, when obtained, to fill the blanks in the policy, receive the premiums and issue the policies, and consequently had the implied authority to waive the conditions of the policy. (State Mat. Ins. Co. v. Latourette, 71 Ark. 242, 74 S.W. 300; Phoenix Ins. Co. v. Public Parks Amusement Co., 63 Ark. 187, 37 S.W. 959; German-American Ins. Co. v. Humphrey, 62 Ark. 348, 35 S.W. 428, and cases cited). He knew that appellee had contracted to sell and convey to Kifer the property insured, when the purchase price agreed upon was paid; he wrote the contract, and with full knowledge of the transaction assured appellee that her policies were 'all...