Medley v. German Alliance Ins. Co

CourtSupreme Court of West Virginia
Writing for the CourtPOFFENBARGER
Citation47 S.E. 101,55 W.Va. 342
Decision Date15 March 1904

47 S.E. 101
55 W.Va. 342


Supreme Court of Appeals of West Virginia.

March 15, 1904.


1. An insurance company establishing a local agency is responsible to the parties with whom its agent transacts business for his acts and declarations within the scope of his employment, and to the extent of the authority apparently conferred upon him by the company; and a limitation upon such apparent authority, not communicated to the insured before he acted upon the representations or conduct of the agent, will not relieve the company from liability, unless, after discovery of the want of authority in the agent, the insured has precluded himself from the assertion of his rights by laches. (By three Judges.)

2. When an insurance agent, intrusted with blank policies, and authorized to fill up. countersign, and deliver them, is correctly informed, by the person whose property he undertakes to insure, as to the state of the title, and other facts material to and affecting the inception of the contract, so far as inquiry is made respecting them, and takes no written application for the insurance, and then issues a policy embodying, as warranties therein, facts different from those which were given to him by the insured, the company is estopped from defending a claim for loss under the policy on the ground of such false recitals, unless it is shown that the insured had prior or contemporaneous notice of want of authority in the agent to waive conditions. (By three Judges.)

¶ 2. See Insurance, vol. 28, Cent. Dig. §§ 999, 1001, 1002.

3. A contract in writing is presumed to be the embodiment of an antecedent verbal agreement, and upon clear and full proof that the person who undertook the preparation of it has, by mistake or fraud, written the contract different from what it was as made by the parties, it may be reformed in equity; and, where such departure occurs in a policy of insurance prepared by an agent of the company, it raises an equitable estoppel against the company, which may be effectually asserted by the insured in a court of law, unless he had notice ot

[47 S.E. 102]

want of authority" in the agent to waive the conditions at all, or except in a specific manner. (By three Judges.)

4. A clause in a policy of insurance so limiting the authority of the agent is not notice to the insured of the agent's want of power to bind his principal in respect to transactions had between them before the policy was delivered, such as will prevent a reformation of the contract at the instance of the insured, or preclude him from relying upon a waiver of conditions by the agent made prior to the issuance of the policy. (By three Judges.)

5. Failure to read a policy of insurance within a short time after its delivery is not such neglect or laches as will preclude the insured from having a reformation of it, or deprive him of the benefit of a waiver by the company through its agent, unless some fact was known to him sufficient to put him on inquiry as to whether it had been correctly written, or contained a limitation upon the powers of the agent. (By three Judges.)

G. Restrictions inserted in a policy of insurance upon the power of the agent to waive any conditions, except in a particular manner, as by indorsing the waiver on the policy, do not apply to those conditions which relate to the inception of the contract. (By three Judges.)

7. As to promissory warranties, conditions for the violation of which the policy is rendered noneffective after it has become effective and operative, such limitation clause is not only notice to the insured of want of authority in the agent to waive them, but also a stipulation between the parties that the agent has not, and shall not have, any such power.

8. Notice of sale of the insured property under a deed of trust, served upon the insured before the occurrence of the loss, precludes recovery, when the policy contains a stipulation that, unless otherwise provided by agreement indorsed thereon or added thereto, it shall be void, "if, with the knowledge of the insured, foreclosure proceedings be commenced or notice given of sale of any property covered by this policy by virtue of any mortgage or trust deed, " together with a clause inhibiting the agent from waiving such condition otherwise than by an agreement so indorsed or added, and no agreement waiving the condition as to commencement of foreclosure proceedings and notice of sale is so indorsed or added unless the forfeiture is waived by the company, or the agent under authority therefor conferred by the company.

9. Forfeiture for breach of a promissory warranty is not waived by retention of the premium after notice thereof.

10. Under such a policy, having a slip attached thereto by the agent saying, among other things, "$—Other Concurrent Insurance permitted, " additional insurance on the property will not prevent recovery for loss on the policy.

11. Denial by an insurance company of its liability on other grounds, within the time allowed for furnishing preliminary proofs of loss, is, in law, a waiver of the conditions of the policy requiring such proofs.

12. When, by the provisions of a policy, it shall be void in case of fraud or false swearing by the insured touching any matter relating to the insurance or the subject thereof, false swearing, in order to defeat recovery, must be intentional, and done for the purpose of defrauding the insurer.

Brannon, J., dissenting.

(Syllabus by the Court.)

Error to Circuit Court, Kanawha County; F. A. Guthrie, Judge.

Action by Lucy A. Medley against the German Alliance Insurance Company. Judgment for plaintiff, and defendant brings error. Reversed.

Watts & Ashby and Chilton, MacCorkle & Chilton, for plaintiff in error.

A. W. McDonald, Brown, Jackson & Knight, Linn, Byrne & Cato, and A. B. Littlepage, for defendant in error.

POFFENBARGER, P. The German Alliance Insurance Company complains of a judgment of the circuit court of Kanawha county rendered against it, and in favor of Lucy A. Medley, for the sum of $1,732, in an action of assumpsit upon a policy of insurance upon a dwelling house, and personal property therein, for the sum of $1,500; alleging that the court erred in overruling its motion to exclude the plaintiff's evidence, made at the conclusion thereof, and its motion to exclude all the evidence and direct a verdict, made after all the evidence had been introduced; in giving to the jury five several instructions, and each of them; in refusing to set aside the verdict; and in entering judgment thereon.

One of the principal defenses to the action, raised by a proper plea, and-which forms the subject-matter of instructions given and refused, is the alleged breach of a condition of the policy which reads as follows: "This entire policy, unless otherwise provided by agreement endorsed hereon or added hereto shall be void * * * if the interest of the insured be other than unconditional and sole ownership; or if the subject of insurance be a building on ground not owned by the insured in fee simple." No such provision was indorsed on the policy. Mrs. Medley's title to the land on which the building stood is evidenced by a deed by which the Kanawha Valley Bank, a corporation, "doth grant and convey unto" her the lot (describing it), and which contains, in the habendum clause thereof, the following: "And it is fully understood and agreed between all of the parties herein interested that the said lot of land is hereby conveyed by the parties of the first part to the party of the second part for and during her lifetime and at and after her death the title to the said lot is to pass unto and vest in her children born and unborn." No written application for the policy was made. The contract of insurance was effected by Thomas Popp, on behalf of the company, as its agent and G. W. Medley, the husband of the plaintiff, as her agent. The insurance was solicited by the company through Popp, who inquired of Medley, before issuing the policy, as to the person in whose name the deed was, in response to which Medley said: "The deed is deeded to my wife and her heirs, born and unborn." George Medley, a son of the insured, says his father told Popp the property was deeded to his mother and her heirs, and also that there was a lien upon it by deed of trust for $300 in favor of Ben Baer. Both father and son say the agent inquired, not as to the estate or interest of Mrs. Medley in the property, but as

[47 S.E. 103]

to the name of the person to whom it was deeded. Popp's testimony was not taken.

The policy contained the following additional clause, limiting the authority of the agent: "This policy is made and accepted subject to the foregoing stipulations and conditions, together with such other provisions, agreements or conditions as may be. endorsed hereon or added hereto, and no officer, agent or other representative of these companies shall have power to waive any provision or condition of this policy except such as by the terms of this policy may be the subject of agreement endorsed hereon or added hereto, and as to such provisions and conditions no officer, agent or representative shall have such power or be deemed or held to have waived such provisions or conditions unless such waiver, if any, shall be written upon or attached hereto, nor shall any privilege or permission affecting the insurance under this policy exist or be claimed by the insured unless so written or attached."

In Wolpert v. Northern Assur. Co., 44 W. Va. 734, 20 S. E. 1024, this court held that "if an insurance company elects to issue its policy of insurance against a loss by fire without any regular application, or without any representation in regard to the title to the property to be insured, it cannot complain, after a loss...

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