Ins. Co. v. Brodie

• Decision Date: 15 June 1889
• Citation: 11 S.W. 1016,52 Ark. 11
• Parties: INSURANCE COMPANY v. BRODIE
• Court: Arkansas Supreme Court

11 S.W. 1016

52 Ark. 11

INSURANCE COMPANY v. BRODIE

Supreme Court of Arkansas

June 15, 1889

APPEAL from Crawford Circuit Court, JOHN S. LITTLE, Judge.

Judgment affirmed.

Brown Brown & Sandels, for appellant.

The application formed a part of the policy and was a warranty by the assured, and the company was not bound by any acts or statements made to or by any agent, unless inserted in the contract. All answers were warranted to be true. That a flue is not a chimney is clear. 30 N.Y. 136; 6 W.Va. 425; Angell on Ins., sec. 143. The acts and statements of Danayski (who was not shown to be an agent) were clearly contrary to any authority which he may have had, and could not bind the company. 30 N.Y. 136; 2 Den., 75; 62 N.Y. 47; 11 Vroom, 568; 50 Pa. 331; 24 id., 320; 17 Mo. 247; 53 Tex. 61; 102 Pa. 335; 46 Me. 394; Angell on Ins., 143; 10 Barb., 285; 15 Wall 664; 96 U.S. 544; 22 Conn. 235. The acts of the so-called agent were never brought to the knowledge of the company, and they cannot be estopped by the unauthorized acts of an agent of which they never had any knowledge; acts, and facts which Brodie refused and failed to communicate.

2. No proof of loss was ever furnished by Brodie, when by the contract he agreed to furnish same within thirty days. The act of an adjuster in adjusting the loss was no waiver, for it was expressly agreed that it should not be so considered. The notice of loss and proof of loss within the times specified are conditions precedent. Angell on Ins., secs. 223, 232a.

3. The acts of Gardner did not amount to a waiver. He was a special agent and his duties and authority were limited to adjusting the loss. One who deals with a limited agent does so at his peril. Keith v. Hirschberger, 48 Ark. As to what constitutes a waiver see 6 W.Va. 425; 49 Am. Dec., 77; 95 Pa. 51; 75 id., 380; 72 Am. Dec., 622; 19 Pa. 401; 79 Am. Dec., 833; 80 id., 199; 18 Wisc., 407; 66 Am. Dec., 308.

4. Any agreement between parties limiting the period within which suit may be instituted is consistent with public policy and binding, and will be enforced. 1 Blatch. C. C., 280; 14 N.Y. 253; 30 N.Y. 136; 6 Gray (Mass.), 596; 6 W.Va. 425; 7 Gray, 61; 27 Vt. 99; 56 Ga. 266; 31 Pa. 449; 6 Ohio St. 599; 25 Ill. 466; 7 Wall., 286; 20 N.H. 73. The only contrary decisions are 5 McLean C. C., 461, and 9 Ind. 443. Plaintiff's action was barred. 91 Ill. 92; 26 La. An., 298.

5. There was no waiver by the company of the clause in the policy that the suit should be brought within the time limited. 49 Am. Dec., 123; ib., 74; 2 How., 481; 34 Am. Dec., 281; 6 W.Va. 425; 30 N.Y. 136; 20 N.H. 73.

OPINION

BATTLE, J.

This was an action upon a policy of fire insurance. One of the defenses to it was, that the policy had been issued on the faith of representations made by Brodie, whose dwelling was insured, which were false, and were declared in the policy, by the express agreement of the parties, to be warranties.

Among the questions propounded to Brodie and answered in his application for insurance, was the following: "Do all the stovepipes go directly into brick chimneys?" To which was appended the answer, "Yes." None of the answers to the questions propounded were written by Brodie, but were written by the agent of the insurance company, and signed by Brodie. To this application was appended the following words: "I warrant the answers to each of the foregoing questions to be true," which was also signed by the applicant. There was evidence adduced to prove what answer was actually made to this question, and how Brodie was induced to sign the application, the answers to the questions, and the warranty; but inasmuch as it is not alleged or indicated in the bill of exceptions that it contains all the evidence adduced at the trial, we assume that there was evidence sufficient to warrant the instructions given by the court to the jury, if they state the law correctly.

Among the instructions given was the following: "As to the first defense the court instructs you:--The jury are instructed that in signing the application for insurance the plaintiff warranted all statements to be true, and that the application was a part of the policy of insurance; and that if you find that, in answering the question, 'Do all stovepipes run directly into brick chimneys?' in the affirmative, the plaintiff made a false statement, and that the stovepipes ran directly through the roof, and thereby increased the risk, you are instructed that such false statements vitiated the policy, and you will find for the defendant, unless you find that the company's agent inspected the property and informed plaintiff that the facts warranted such answer." The giving of this instruction is assigned as error.

It has been generally held that, where an agent of an insurance company, authorized to fill up blank applications for insurance, does so by writing false answers, with notice or knowledge of the inaccuracy of the answers written, and thereafter procures the signature of the applicant thereto, after he had given correct answers to the questions asked, and the company afterwards receives the premium and issues a policy, the company will, in the case of loss of the property insured, be estopped from insisting on the falsity of the answers, although warranted by the assured to be true, and failing to avoid the policy on other grounds, will be bound to indemnify the assured for the loss to the extent of the insurance. "And this is true even though the policy provides that when the application is made through an agent of the company, the applicant shall be responsible for such agent's representations." Insurance Co. v. Wilkinson, 80 U.S. 222, 13 Wall. 222, 20 L.Ed. 617; American Life Ins. Co. v. Mahone, 88 U.S. 152, 21 Wall. 152, 22 L.Ed. 593; Combs v. Hannibal Ins. Co., 43 Mo. 148; Plumb v. Cattaraugus, etc., Ins. Co., 18 N.Y. 392; The Commercial Ins. Co. v. Ives, 56 Ill. 402; Michigan, etc., Ins. Co. v. Lewis, 30 Mich. 41; Germania Fire Ins. Co. v. McKee, 94 Ill. 494; Andes Ins. Co. v. Fish, 71 Ill. 620; The Aetna, etc., Ins. Co., v. Olmstead, 21 Mich. 246; Aurora Fire Ins. Co. v. Eddy, 55 Ill. 213; 2 Wood on Fire Insurance (2d Ed.), pp. 832, 835, 846, 850; May on Insurance (2d Ed.), sec. 143, and cases cited; Bacon on Benefit Societies and Life Insurance, secs. 153, 221.

In Insurance Co. v. Wilkinson, 80 U.S. 222, 13 Wall. 222, 20 L.Ed. 617, the court said: "It is not to be denied that the application, logically considered, is the work of the assured, and if left to himself as to such assistance as he might select, the person so selected would be his agent, and he alone would be responsible. On the other hand, it is well known, so well that no court would be justified in shutting its eyes to it, that insurance companies organized under the laws of one State, and having in that State their principal business office, send their agents all over the land, with directions to solicit and procure applications for policies, furnishing them with printed arguments in favor of the value and necessity of life insurance, and of the special advantages of the corporation which the agent represents. They pay these agents large commissions on the premiums thus obtained, and the policies are delivered at their hands to the assured. The agents are stimulated by letters and instructions to activity in procuring contracts, and the party who is in this manner induced to take out a policy, never sees or knows any thing about the company or its officers by whom it is issued, but looks to and relies upon the agent who has persuaded him to effect insurance as the full and complete representative of the company in all that is said or done in making the contract. Has he not a right to so regard him? * * * The powers of the agent are, prima facie, co-extensive with the business intrusted to his care, and will not be narrowed by limitations not communicated to the person with whom he deals. An insurance company, establishing a local agency, must be held responsible to the parties with whom they transact business, for the acts and declarations of the agent, within the scope of his employment, as if they proceeded from the principal.

"In the 5th Edition of American Leading Cases, after a full consideration of the authorities, it is said: 'By the interested or officious zeal of the agents employed by the insurance companies in the wish to out bid each other and procure customers, they not unfrequently mislead the insured, by a false or erroneous statement of what the application should contain, or, taking the preparation of it into their own hands, procure his signature by an assurance that it is properly drawn, and will meet the requirements of the policy. The better opinion seems to be that, when this course is pursued the description of the risk should, though nominally proceeding from the insured, be regarded as the act of the insurers.' The modern decisions fully sustain this proposition, and they seem to us founded in reason and justice, and meet our entire approval. This principle does not admit oral testimony to vary or contradict that which is in writing, but it goes upon the idea that the writing offered in evidence was not the instrument of the party whose name is signed to it; that it was procured under such circumstances by the other side as estops that side from using it or relying on its contents; not that it may be contradicted by oral testimony, but that it may be shown by such testimony that it cannot be lawfully used against the party whose name is signed to it."

The issue of a policy by an insurance company, with a full knowledge or notice of all the facts affecting its validity is tantamount to an assertion that the policy is valid at the time of its delivery, "and is a...