Imboden v. Detroit Fire & Marine Ins. Co.

• Decision Date: 23 May 1888
• Parties: DAVID C. IMBODEN, Appellant, v. DETROIT FIRE AND MARINE INSURANCE COMPANY, Respondent.
• Court: Kansas Court of Appeals

31 Mo.App. 321

DAVID C. IMBODEN, Appellant, v. DETROIT FIRE AND MARINE INSURANCE COMPANY, Respondent.

Court of Appeals of Missouri, Kansas City.

May 23, 1888

Appeal from Jackson Circuit Court, HON. JAMES H. SLOVER, Judge.

Reversed and remanded.

The case is stated in the opinion.

DOBSON DOUGLASS & TRIMBLE, for the appellant.

I. It may be conceded that an agreement as to the time the risk is to run is necessary to a valid contract of insurance. The agreement that the risk should run from the first day of August, 1885, to a day to be named by the defendant, is in law an agreement as to the duration of the risk; and is equivalent in law to a contract for a certain time, because under the terms of the agreement the time can be rendered certain,-- id certum est quod certum reddi potest. 1 Wash Real Prop. [3 Ed.] 388; Tiedeman Real Prop., sec. 173; West Trans. Co. v. Lansing, 49 N.Y. 507, 508; Church v. Ins. Co., 19 N.Y. 305; Stilwell v Craig, 58 Mo. 28, 30. The case of Strohn v. Ins Co., 37 Wis. 625, so much relied on by respondent, is clearly distinguished from the one at bar by the following language contained in the opinion: " And the witness closed his testimony with the statement that there was nothing said between me and Dearborn as to how long this insurance should run. * * * The amount of premium to be paid and the continuance of the risk are not agreed upon, nor is there any stipulation in the agreement from which these important elements of the contract could be fixed and determined. * * * Perhaps a contract which either party could terminate at any time might be a valid contract," etc. In the case at bar there was something said as to how long the insurance should run. And there is a stipulation in the agreement from which this important element can be fixed and determined.

II. Under the circumstances of this case, and owing to the uncertainty as to how long the grain might remain in the elevator, would it not be a reasonable construction of this contract to say that it was in effect a contract to insure the grain so long as it remained in the elevator, unless sooner terminated by the defendant? If so. then the contract would be valid, just as marine risks are valid which are made to continue during the voyage. All that is necessary is that the minds of the parties meet on a certain time; or upon something which is capable of rendering the time certain; or upon means by which the time may be afterwards fixed. Eames v. Ins. Co., 4 Otto [U. S.] 621.

III. Plaintiff could have proved a custom or usage to insure such property for an indefinite time, etc., and that certificates like this were issued as evidence of such insurance. Such evidence would have supplied the apparent defect in the certificate and given effect to the intention of the parties. Baxter v. Ins. Co., 13 Allen [Mass.] 390; Wood on Fire Ins., sec. 20; Clarke & Brown on Usages and Customs sec. 138; Rugley v. Goodlee, 7 La.Ann. 295.

IV. The certificate of insurance in this case, being manifestly incomplete, the plaintiff should have been allowed, on a trial of the facts, to prove that there was an agreement outside of the certificate as to how the risk should be terminated. Moss v. Green, 41 Mo. 389; Lash v. Plasten, 78 Mo. 397; Winn v. Chamberlin, 32 Vt. 318; Webster v. Hodgkins, 25 N.H. 128.

V. Five months after this contract was made and the certificate issued, the defendants, with full knowledge that its duration had not been fixed and with full knowledge that the plaintiff was relying upon it as a valid insurance, demanded and received the premium earned up to that time and left the risk to continue as before. The defendant having thus deliberately asserted that this contract was good enough to collect a premium on, should be estopped to deny that it was good enough to pay a loss on. A party cannot occupy inconsistent positions; he will be confined to that which he first adopts. Bigelow on Estoppel, 578, and authorities cited; Green v. Railroad, 82 Mo. 653; Adair v. Adair, 78 Mo. 630; Hayward v. Ins. Co., 52 Mo. 181; Wood v. Seeley, 32 N.Y. 105; Gas Co. v. St. Louis, 46 Mo. 121. A party, by actively affirming a contract, as by receiving money upon it, is estopped thereafter to deny its validity. Bigelow on Estoppel, 584; Ran v. Little Rock, 34 Ark. 312.

VI. If the court should hold that the contract sued on is valid, or that defendant is estopped to deny its validity, but should be of opinion that the petition is otherwise defective, the case should be remanded, with leave to amend.

KARNES & KRAUTHOFF, for the respondent.

I. The law has prescribed certain elements as essential to a valid and complete contract of insurance, and unless these elements are present, it cannot be said that there has been that meeting of minds necessary to constitute a contract. These elements have been enumerated by our Supreme Court as follows: " The reception of and receipt for the required premium; the subject-matter insured; the amount of insurance, and the duration of the policy." Baile v. Ins. Co., 73 Mo. 371, 383. It will be remembered that the present is not a case where the company is retaining the premium and insisting that its policy is void, for the petition admits that no premium has been paid for the period within which the loss is claimed to have occurred. These same elements are universally held to be essential. There is no diversity in adjudged cases nor in the text-books on the subject. Mr. Wood states the law thus: " In this class of contracts, as in all others, the contract must be definite and certain, and the parties must have agreed upon all its essential terms. If anything has been left open, no contract exists, because the minds of the parties have not met, and there is not an agreement that can be enforced by either party, and both parties must be bound. The contract must be complete and perfect. All its elements must be agreed upon, and if anything is left open or undetermined, so that the minds of the parties have not met, no contract exists, and consequently no liability for a loss occurring. As if * * * the duration of the risk is not agreed upon * * * a recovery will not be permitted, as the assured takes the burden of establishing all the elements requisite to make a complete contract. The aggregatio mentium must be fully established. * * * The details of the contract must be fixed." Wood on Fire Ins., pp. 18, 21, sec. 6. Again, " the burden of establishing a completed contract is upon the assured, and he must satisfy the jury that a complete and perfect contract was made; that an agreement was entered into, and that nothing essential to the contract was left open for future determination, and the proof must be clear that such a contract was made, or an action upon it will not be upheld at law, nor will it be enforced in equity." Among the examples of fatal defects is, that " the duration of the risk is not agreed on." Wood on Fire Ins., pp. 35, 37, sec. 13; see also, May on Insurance, sec. 43; Strohn v. Ins. Co., 37 Wis. 625.

II. This case presents all these defects in a marked degree, for the certificate shows upon its face, that its duration was not fixed or determined. This being true there was no valid contract of insurance. The plaintiff invokes the rules permitting such contracts to be made by parol; but among these rules are those we have quoted and which are fatal to the claim made. Wood on Fire Ins., sec. 5. These views have the full approbation of this court, which has recently subjected the general question to a careful examination. Lingenfelter v. Ins. Co., 19 Mo.App. 252, 263, 264.

III. It is to be noticed that this action is brought, not on an agreement to insure, but on a complete, perfected insurance contract. In order to be binding, this contract must be complete in all its terms, the essential elements must all be agreed upon. As to such a contract it cannot be said that it will be sufficiently definite if one of the material elements is left to the mere whim of either of the contracting parties. In this case it will not do to say that the insurance company had the privilege of terminating the policy whenever it desired. Such an option was not an agreement. " Both parties must be bound, the one to insure, and the other to pay therefor. If the contract is not so far perfected that the insurer upon said policy could maintain an action for the premium, no perfect insurance exists, and the insurer is not liable." 1 Wood on Fire Ins., sec. 6, p. 23; Hartshorn v. Ins. Co., 15 Gray 241, 244. " Both parties must be bound or neither will be." Lungstrass v. Ins. Co., 48 Mo. 201, 204. " There must be mutuality of obligation." Brown v. Rice, 29 Mo. 322. " A promise is a sufficient consideration for a promise where there is a mutuality of engagement, so that each can hold the other to a positive agreement." Moss v. Green, 41 Mo. 389. " There can be no valid contract unless the parties thereto assent to the same thing in the same sense." Eads v. Carondelet, 42 Mo. 113.

IV. The suggestion of Judge Comstock in 19 N. Y., " that perhaps a contract which either party could terminate at any time, by a notice to the other, might be a valid contract," was made on the basis that a complete and perfected contract existed in that case and not in such a condition, and with reference to the effect of such a clause upon the complete agreement there in question. It has no reference whatever to the point involved here. The petition does not allege that the time of the risk was to be fixed at the...