Lynchburg Fire Ins. Co. v. West

• Decision Date: 20 July 1882
• Citation: 76 Va. 575
• Parties: LYNCHBURG FIRE INS. CO. v. WEST.
• Court: Virginia Supreme Court

76 Va. 575

LYNCHBURG FIRE INS. CO. v. WEST.

Supreme Court of Appeals of Virginia.

July 20, 1882

Error to judgment of circuit court of Patrick county, in action of assumpsit by John T. West against The Lynchburg Fire Insurance Company, on a policy effected on a storehouse and contents. Verdict and judgment for plaintiff. Defendant obtained writ of error and supersedeas.

The opinion states the case.

John E. Penn, for appellant.

J L. Tompkins and A. A. Phlegar, for appellee.

OPINION

STAPLES J.

An action of assumpsit upon a fire insurance policy was brought by John T. West against The Lynchburg Fire Insurance Company in the circuit court of Patrick county. Upon the calling of the cause for trial in the court below, the defendants moved for a continuance upon two grounds.

First the absence of certain bills and invoices, which were alleged to be material to the defence, and without which the defendants could not go safely into the trial. Secondly, the absence of a witness, who had not been summoned, but of whose materiality the defendants were not informed until the day of trial.

With respect to the first ground it is sufficient to say that the bills and invoices were in possession of the defendants, and had been in their possession for six months previous to the trial. If, as stated in the affidavit of the company's agent, they had been mislaid or overlooked, it was owing to the carelessness or negligence of the defendants or their agents. In the exercise of ordinary diligence they ought to have remembered that the papers in question had been sent to them by the plaintiff, and they ought to have made diligent search for them if they desired to use them as evidence on the trial.

With reference to the second ground relied on for a continuance, it is to be observed the affidavit does not state that the supposed witness is material, but that the affiant had that day for the first time heard facts which may make the witness important. Nor is it stated that the same facts could not be proved by other witnesses, or that the defendants could not safely go to trial without the testimony. For aught that appears to the contrary, other witnesses in attendance might have proved the same facts. Whether the absent witness would turn out to be material, depended upon some occurrence or contingency not then disclosed. I am of opinion that the court properly overruled the motion for a continuance.

During the progress of the trial, the plaintiff was introduced as a witness, and testified that the company's agent requested him to insure his storehouse and stock of goods in defendant's company; that he made out two applications under the directions of the agent; that before insuring, he told the agent that he had no title to the land upon which the storehouse was situated, but a title bond, and that he had paid no part of the purchase money. The agent told him as the money was not due it was no incumbrance on the property, and he therefore wrote in the application that the property was not encumbered. He then paid the premiums, and the policies were sent to him a short time thereafter. The defendant moved to exclude this evidence, upon the ground that the plaintiff, in his application, had affirmed there was no encumbrance upon the property; that this affirmation constituted a warranty, and if not a warranty, it was a representation material to the risk, and, being incorporated in the policy, could not be contradicted or varied by parol proof of prior or contemporaneous conversations between the plaintiff and defendant's agent.

The court below refused to exclude the evidence, and we are now to inquire whether this ruling was proper. This question has been the subject of discussion by this court in several cases. In Southern Mutual Insurance Company v. Yates, 28 Gratt. 585, the judge, who delivered the opinion of the court, after stating the general rule that parol testimony is inadmissible to vary or contradict a written instrument, and that the latter is generally regarded as the best, if not the sole, repository of the contract, said that the exceptions to this rule, so far as insurance policies are concerned, will be found in those cases in which the assured is misled by assurances, or declarations of the insurer, or his agent, or where the insurer seeks to take advantage of a forfeiture of his own creation, or where the insured has given a correct description of the property, and that description has not been followed by the insurer or his agents in preparing the policy, or where the parties stand upon unequal grounds, and one of them uses his superior knowledge, or his influence, to mislead the other as to the true import of the contract. In such cases the oral evidence is not offered to contradict the writing, but to show that the representation, as it is written, ought not to be used against the party upon the ground of an equitable estoppel. The same rule was laid down in Georgia Home Insurance Company v. Kinnier's Adm'x, 28 Gratt. 88, and in Manhattan Fire Insurance Company v. Weill and Ullman, 28 Gratt. 389, and is now the established doctrine of the courts. " The principle," says the supreme court of the United States, " is that where one party has, by his representations or his conduct, induced the other party to a transaction to give him an advantage which it would be against equity and conscience for him to assert, he will not in a court of justice be permitted to avail himself of that advantage." Union Mutual Insurance Company v. Wilkinson, 13 Wallace 222; May on Insurance, § 499, and cases cited in note 1; Wood on Insurance, p. 680; § 403.

And in all this class of cases, it has been further held that where the agent, filling up the application is clothed with real or apparent authority to make a contract of insurance, the agent's knowledge of the real condition and situation of the risk is imputable to the principal and estops the latter from setting up any warranty inconsistent therewith. Wood on Fire Insurance, § 386, 402, and cases cited in note; May on Insurance, § 502, § 140; Wood, § 403, and notes.

The learned counsel for the defendants insists that the agent in this case was one of limited and special powers, and that the company cannot be bound by any opinions or representations on his part, the effect of which is to annul clearly defined provisions of the contract of insurance.

The evidence in this record with respect to the powers of the agent shows that the principal office of the company was in the city of Lynchburg; that the agent who effected the insurance resided at Floyd Courthouse, about one hundred miles distant, whilst the plaintiff's property was located in the county of Patrick. The papers and exhibits connected with the policy show that the agent was clothed with such powers as are usually exercised by the local agents of insurance companies, whose business it is to solicit insurance, fill up applications, propound interrogations obtain answers, make recommendations, furnish all needful information with respect to the nature and character of the risk, and agree upon the terms of the insurance, subject only to the ratification of the company. One of these exhibits purports to be the agent's survey, in which, in answer to a question propounded by his principal, he states that " the property is not mortgaged or otherwise encumbered," and this statement is made with full knowledge of all the facts communicated to him by the plaintiff. If, therefore, the defendants were misled, it was by their own agent and not by the plaintiff. The latter honestly gave the agent all the information that was required of him; he relied upon the agent to see that the business was correctly done, according to the requirements of the company. Called upon to make answers to certain interrogations, he had the right to presume that the agent was competent to understand their meaning and effect as well as the meaning and effect of the provisions of the policy bearing upon the disclosures so made. The defendants ought not now to be heard to say that the agent of their own selection had exceeded his powers, and that he had not communicated to them the facts made known to him by the plaintiff. This is...