Liverpool & London & Globe Ins. Co. v. Sheffy

• Decision Date: 26 March 1894
• Parties: LIVERPOOL & LONDON & GLOBE INSURNCE CO. v. J. K. SHEFFY
• Court: Mississippi Supreme Court

16 So. 307

71 Miss. 919

LIVERPOOL & LONDON & GLOBE INSURNCE CO. v. J. K. SHEFFY

Supreme Court of Mississippi

March 26, 1894

FROM the circuit court of Bolivar county. HON. R. W. WILLIAMSON Judge.

Action by appellee against appellant on an insurance policy for $ 2,500, on a stock of merchandise and a store building destroyed by fire. Defendant pleaded the general issue, and among other things, gave notice of two special defenses namely'

1. That assured procured additional insurance upon the property covered by the policy, without the written consent of defendant indorsed thereon.

2. That he failed to keep a set of hooks, showing a record of his business, securely locked in a fire-proof safe at night when the store mentioned in the policy was not open for business. On these defenses a forfeiture of the policy was insisted upon.

Plaintiff recovered judgment for the full amount claimed. Motion for new trial overruled. Defendant appeals. The opinion contains a further statement of the case.

Affirmed.

Moore & Jones, for appellant.

1. One dealing with an agent, knowing that he is acting with limited authority, and is transcending his powers, cannot hold the principal; and it is immaterial whether the agent is general or special. 2 Wood on Ins., 930; 33 N.Y. 730; 73 Ib., 10; 133 Ib., 356; 153 Pa. 257; 46 Minn. 471; 101 Ill. 621; 25 At. Rep., 1124; 51 N.W. 455; 52 Ib., 754. Many authorities holding the contrary have been overruled.

If a parol waiver of the condition is good, we still submit that there is nothing in the case upon which to predicate such waiver. No waiver is good unless it is shown that all the facts were known. May on Ins., § 506; 30 Pa. 311; 9 Cush. (Mass.), 470; 12 Vt. 366; 133 N.Y. 356. As to parol waiver by agent, see 2 Biddle on Ins., § 1081.

2. The condition of the policy requiring the accused to have a set of books showing a record of his business, and to keep them locked in a fire-proof safe at night, was not complied with. Opening a new set of books shortly before the fire, with only the balances brought forward from the old books, could afford but little information as to the condition of the business. The obvious intent of such a clause is to obligate the assured to keep a complete record of his business, so that, in the event of a fire, the insurer may have a safe guide for the adjustment of the loss. When a loss occurs, the insurer, like a buyer of goods, is entitled to a full and fair showing as to the character and value of the property. He is at a disadvantage, and is entitled to contract for a strict showing, to prevent fraud and imposition. Hence the importance of the iron safe clause. On this point the authorities are meager, but we refer to Insurance Co. v. Wilkerson, 53 Ark. 353.

Chas. & A. Y. Scott, for appellee.

1. This iron safe clause is a new dodge, resorted to for the purpose of defeating policy-holders. In construing it the court should be governed more by the spirit than the letter. The policy did not go into effect until December 17, 1892, when it was delivered, though it was dated the sixteenth. Woods on Ins., § 13 et seq.; Richards on Ins., 147; 2 S.W. 151; 11 Lawyers' R. An., 598. When the policy took effect, a complete set of books were begun, and these were duly kept to the time of the fire, being preserved, with the inventory, in the iron safe. This was a literal compliance with the policy. It was not necessary to preserve the old books.

2. Conceding that the subsequent insurance subsisted under a valid contract, it was consented to by the agents of the insurance company. They acted for it throughout, and had full authority to modify or waive the stipulation requiring written consent. May on Ins., 555, 755; Wood on Ins., §§ 387, 392; 51 N.W. 367.

Verbal assent of the agents was sufficient. May on Ins., 552; Insurance Co. v. Gray, 8 Lawyers' R. An., 70; 43 Kan. 397; 27 Mo. App., 62; 11 N.Y. 125; 23 P. 637; 49 N.W. 634; Insurance Co. v. Wilkinson, 13 Wall., 222. See also Rivara v. Insurance Co., 62 Miss. 720; Insurance Ass'n v. Matthews, 65 Ib., 301; Insurance Co. v. Bowdre, 67 Ib., 620.

Nugent & Mc Willie, on the same side.

1. The agents of the company, who solicited insurance, countersigned and delivered policies, collected premiums and otherwise represented the corporation, had full authority to waive the condition requiring written consent for additional insurance. Rivara v. Insurance Co., 62 Miss. 720; Insurance Co. v. Bowdre, 67 Ib., 620; 7 Am. & Eng. Enc. L., 1017; 36 N.Y. 550; 65 Ib., 1; 17 R.I. 785; 66 Texas, 232; 35 Neb. 752; 39 Minn. 129; 61 Mich. 633; 18 S.W. 505; 3 N.W. 600; 28 Ib., 749; 39 Ib., 70; 50 Ib., 240; 52 Ib., 866; 24 At. Rep., 833.

The curative effect of a verbal waiver by an agent authorized to act for the company is fully recognized. 16 Md. 260; 53 N.H. 10; 73 Pa. 342; 50 Ill. 519; 6 Lans., 166; 4 Bush (Ky.), 242; 6 Ib., 174; 8 Ib., 133; 24 N.J.L. 447; 11 Kan. 93; 36 Wis. 67; 41 Ib., 660; 15 N.Y. 573; 13 S. E., Rep. (N. C.), 236; 23 P. 637; Hayward v. Insurance Co., 52 Mo. 181.

It is immaterial that the waiver is made before the loss. 2 Biddle on Ins., §§ 1082, 1131.

2. The iron safe clause was strictly complied with. It only required the keeping of books showing purchases, sales, etc., after the policy was taken out. Such books, with the inventory of goods, showed fully the condition and value of the stock of goods. Insurance Co. v. Delta Bank, ante, p. 608; Harvey v. Insurance Co., 19 S. E. (W. Va.), 585.

Argued orally by Fontaine Jones, for appellant, and T. A. Mc Willie and W. L. Nugent, for appellee.

OPINION

WOODS, J.

Two questions are presented by this appeal, viz.: (1) Did the insured forfeit Ms right to a recovery on the policy sued on, by reason of his procurement of subsequent and additional insurance without having the consent of the appellant indorsed in writing on its prior policy? (2) Has the insured forfeited his right to a recovery on the policy issued by appellant, by a violation of what is known as the iron safe clause contained in the contract of insurance?

We shall not enter upon any discussion of the disputed facts. The jury has found these issues for the appellee, and we are satisfied with that finding. The fact that the subsequent insurance in the Orient Company was brought to the attention of the appellant's agent, with whom alone the insured dealt at all times, and the other fact that request was made of this agent that he indorse the appellant's consent to this additional insurance, in writing, on the policy sued on, and the still further fact that the agent told the insured that such indorsement, in writing, was unnecessary, and that, in case of loss, the appellant company would pay without regard to such a technicality, we now assume to be true.

1. The naked inquiry, then, is, could the agent of the insurer waive the condition of the contract requiring consent for additional insurance to be made, in writing, indorsed on the policy? Or, to put it otherwise, is the insurer estopped from claiming a forfeiture by the acts and conduct of its agent?

We do not understand that there is any disagreement between counsel as to the character of the agency in this case. Clearly, Roberts, Davis & Co. were general agents. They represented and stood for the company, they received applications, they issued policies, they collected premiums, they received notice of other insurance and gave consent thereto, and, in general, they did for the company whatever it could do in the matter of making and continuing contracts for insurance. The company, being an artificial creature, could only act through human agencies, and what their general agents did in this case, as indicated above, the company itself may be said to have done.

The power to make the contract of insurance by the general agents, necessarily involves the power, also, to modify or vary the same by subsequent contract. The clause in the contract which requires written consent for additional insurance to be indorsed upon the policy is no more unchangeable, at the pleasure of the parties, than any other provision or condition in the contract. The contract of insurance evidenced by the policy is no more sacred than any other contract, and we have yet to learn that ordinary contracts between men may not be altered, varied or wholly abrogated at the election of the parties to them. The condition of the policy requiring consent, in writing, for additional insurance is inserted for the benefit of the insurer, and we are at a loss to conjecture any reason for holding that the insurer may not waive it at its pleasure. It is a mere method or manner of evidencing the insurer's consent, and it is impossible to conceive why the insurer may not waive this mere manner of assenting, and substitute another. Is it because of some supposed superior dignity of the written consent over parol? The supposition is vain and idle. The parol contract may modify or put an end to the written contract, just as the written may modify or end the parol. Every new contract, whether in writing or parol, supersedes the old, whether in parol or writing, according to the will and purpose of the parties.

From what we have already said touching the power of the general agents of the appellant company, it seems to us to necessarily follow that such agents may waive the condition requiring consent in writing for additional insurance. This case, on its facts as found by the jury goes far beyond the most of reported cases in which this question has been passed upon by many courts of last resort in accordance with the views which we entertain. Here the insured actually applied to the company, or its general agents standing for it, to have the proper written consent indorsed, and was refused,...