Insurance Co. of North America v. Wisconsin Cent. Ry. Co.

• Decision Date: 03 January 1905
• Docket Number: 1,079.
• Citation: 134 F. 794
• Parties: INSURANCE CO. OF NORTH AMERICA v. WISCONSIN CENT. RY. CO.
• Court: U.S. Court of Appeals — Seventh Circuit

134 F. 794

INSURANCE CO. OF NORTH AMERICA v. WISCONSIN CENT. RY. CO.

No. 1,079.

United States Court of Appeals, Seventh Circuit.

January 3, 1905

George H. Noyes, for plaintiff in error.

M. C Phillips, for defendant in error.

Before JENKINS, GROSSCUP, and BAKER, Circuit Judges.

BAKER Circuit Judge.

The railroad company brought its action on two policies issued by the insurance company on January 31, 1903, covering property at Menasha, Wis., which was damaged by fire on February 19, 1903.

The parties stipulated the amount the verdict should be, if there was any liability. The defense was that the policies had been canceled by mutual consent of the parties before the fire occurred. At the conclusion of the evidence, which was confined, of course, to the truth of the defense, each party moved the court to direct a verdict in its favor. After the court, in the presence of counsel, had announced the ultimate facts which he found established by the uncontradicted evidence and his conclusion of law thereon that the policies were in force, counsel for the insurance company asked the court to submit to the jury two alleged questions of fact. This the court declined to do, entered the directed verdict and thereon the judgment now under review.

1. We have read every word of the evidence, and have found no contradictions. The salient and controlling items are these The home office of the railroad company was at Milwaukee; of the insurance company, at Philadelphia. Bill, at Milwaukee, had full charge of the railroad company's insurance, with authority to agree on rates and forms, to accept and reject policies, to cancel policies after acceptance, and generally to do everything respecting insurance that the company could do through its directors and managing officers. Fieweger, at Menasha, was agent for the insurance company, with authority to write and issue its policies. Leedom, at Milwaukee, was agent of various insurance companies, but not of this one; and he was also an insurance broker-- that is, he procured for his customers insurance from other agents, for which business he received from such agents one-half of their commissions. Leedom solicited business from Bill, and had been given some prior to the transaction in question; but the course of dealings between them in other instances was not different from in this. On January 31, 1903, Leedom obtained from Gill an order to place $64,000 insurance on the property at Menasha. Leedom at once transmitted the order to Fieweger, who accepted it. Fieweger wrote up the amount in various companies; canceled some policies and substituted others, entered the transactions in his books, and finally, on February 6, 1903, sent to Leedom 22 policies, aggregating $64,000. Thereupon Leedom entered the policies in his office books, and took them to Gill, who accepted them. Between the 6th and 12th of February Feiweger received instructions from several companies to cancel their policies, whereupon he wrote policies in other companies, entered them in his books, noted in his books that the old ones were canceled, and sent the new to Leedom, with the request that he should take up and return the old. Leedom took the new policies to Gill, who accepted them, and delivered up those for which these were substituted. On February 18th Leedom received a letter from Fieweger, stating that the insurance company had ordered the policies in suit to be canceled, inclosing new policies to be substituted therefor, and requesting the return of the former. Leedom entered the new policies, and noted the cancellation of the old in his office books. On the 19th he telephoned to find whether Gill was in town, and learned that he was absent, but would return on the 10th. Later, on the 19th, the fire at Menasha occurred. On the 10th Leedom tendered the new policies to Gill, who declined to accept them, and refused to surrender the old. Other evidence, and the want of evidence, will be taken up in connection with the contentions of counsel.

Each policy contained this provision: 'This policy shall be canceled at any time at the request of the insured, or by the company by giving five days' notice of such cancellation. ' The five-days time is for the protection of the insured, and therefore can be waived only by the insured or his authorized agent. The insurance company did not give the railroad company notice of cancellation. It merely directed its own agent, Fieweger, who had written the policies, to cancel them. Fieweger did not serve notice upon the insured or upon Gill. If he had, the railroad company or Gill could have waived the five-days provision, and agreed to immediate cancellation. All that Fieweger did was to notify Leedom of the insurance company's instruction to cancel the policies, and to send him others to take their place. So the defense was bottomed on the proposition that Leedom was authorized on behalf of the railroad company to waive notice, to agree to cancellation, and to accept substitute policies.

(a) There was no express authority. Gill's order to Leedom to place insurance, without naming the companies or the rate meant that Gill was retaining the right to reject any and all policies if the companies or the rates...