Michigan Idaho Lumber Company, a Corp. v. Northern Fire & Marine Insurance Company

• Court: North Dakota Supreme Court
• Writing for the Court: BRUCE, J.
• Citation: Michigan Idaho Lumber Company, a Corp. v. Northern Fire & Marine Insurance Company, 160 N.W. 130, 35 N.D. 244 (N.D. 1916)
• Decision Date: 21 October 1916

160 N.W. 130

35 N.D. 244

MICHIGAN IDAHO LUMBER COMPANY, a Corporation, v. NORTHERN FIRE & MARINE INSURANCE COMPANY, a Corporation

Supreme Court of North Dakota

October 21, 1916

Action to recover for a fire insurance loss.

Appeal from District Court of Grand Forks County, Chas. M. Cooley J.

Judgment for plaintiff. Defendant appeals.

Affirmed.

H. A Bronson, for appellant.

It is well settled that where an insurance policy is delivered to the applicant he is presumed to know its contents, and cannot evade a forfeiture for a violation of its terms on the ground that he never read it.

Smith v. Continental Ins. Co. 6 Dak. 433, 43 N.W 810; Hankins v. Rockford Ins. Co. 70 Wis. 1, 35 N.W 34; Cleaver v. Traders' Ins. Co. 65 Mich. 527, 8 Am. St. Rep. 908, 32 N.W. 660; Leisen v. St. Paul F. & M. Ins. Co. 20 N.D. 316, 30 L.R.A.(N.S.) 539, 127 N.W. 837.

Neither defendant nor its agent knew that the plaintiff was the owner of the property at the time the policy was issued. Zimmerman v. Farmers' Ins. Co. 76 Iowa 354, 41 N.W. 39; Collins v. St. Paul F. & M. Ins. Co. 44 Minn. 440, 46 N.W. 906.

Fundamentally an action for reformation is necessary, and parol proof is not admissible in an action at law to show the facts and circumstances to vary the written instrument. 17 Cyc. 703; Sargent v. Cooley, 12 N.D. 1, 94 N.W. 576.

A waiver by an agent whose powers are restricted is ineffectual to bind the insurer except as to conditions relating to the inception of the contract where the agent had full knowledge thereof. 19 Cyc. 784; Leisen v. St. Paul F. & M. Ins. Co. 20 N.D. 316, 30 L.R.A.(N.S.) 539, 127 N.W. 837; Wood v. American F. Ins. Co. 149 N.Y. 382, 52 Am. St. Rep. 733, 44 N.E. 80.

No estoppel can arise through the collusion of the agent of the defendant with the assured, or could it so arise as to make the plaintiff the assured. 19 Cyc. 825; Pomeroy v. Rocky Mountain Ins. Co. Colo. , 7 P. 295.

Because the distinction between actions at law and suits in equity is abolished, it does not follow that all distinctions are abolished or destroyed, or that any change was made by reason thereof in the substantive law. Comp. Laws 1913, § 7355; Black v. Minneapolis & N. Elevator Co. 7 N.D. 133, 73 N.W. 90; Hanson v. Carlblom, 13 N.D. 361, 100 N.W. 1084.

Courts cannot lend their sanction to the recognition of a remedy at law, where the remedy at equity is ample. Prondzinski v. Garbutt, 8 N.D. 191, 77 N.W. 1012; Niagara F. Ins. Co. v. Jordan, 20 Ann. Cas. 363, note; Thomson v. Southern Mut. Ins. Co. 90 Ga. 78, 15 S.E. 652.

Whatever affects the rate of premium or influences the insurer in accepting or rejecting a risk is material. 2 Cooley, Briefs on Ins. pp. 1163, 1166.

There were concealment and misrepresentations in procuring the policy. Comp. Laws 1913, §§ 6480 to 6502, 6527.

It is fundamental concerning the doctrine of waiver or estoppel that either, to be effective against the party making it, must have occurred with the full knowledge of all the material facts. 19 Cyc. 778.

And, generally speaking, such questions are for the jury. 19 Cyc. 796, 798, 959; Michigan Pipe Co. v. Michigan F. & M. Ins. Co. 92 Mich. 482, 20 L.R.A. 277, 52 N.W. 1071.

Where the policy requires that any waiver of its provisions shall be in writing, signed by the president or indorsed on the policy, a parol waiver by the secretary will not avail. Robb v. Millers Mut. F. Ins. Co. 230 Pa. 44, 79 A. 150.

And the insured is presumed to contract with a knowledge of the limitations where they are contained in the policy. Tilton v. Farmers' Ins. Co. 82 Misc. 79, 143 N.Y.S. 107.

And such provisions in a policy are valid. McCollough v. Home Ins. Co. 155 Cal. 659, 102 P. 814, 18 Ann. Cas. 863; McElroy v. Metropolitan L. Ins. Co. 84 Neb. 866, 122 N.W. 27; Leisen v. St. Paul F. & M. Ins. Co. 20 N.D. 316, 30 L.R.A.(N.S.) 539, 127 N.W. 837; Smith v. Continental Ins. Co. 6 Dak. 433, 43 N.W. 810.

There can be no waiver of the conditions and terms of the policy, except by the company itself through its proper officer, and with full knowledge of all the material facts. West End Hotel & Land Co. v. American F. Ins. Co. 74 F. 114; Ward v. Metropolitan L. Ins. Co. 66 Conn. 240, 50 Am. St. Rep. 80, 33 A. 902; Smith v. West Branch Mut. F. Ins. Co. 31 Pa. S.Ct. 29; Texas Bkg. & Ins. Co. v. Hutchins, 53 Tex. 61, 37 Am. Rep. 750; Keith v. Royal Ins. Co. 117 Wis. 531, 94 N.W. 295.

Where the facts as to the existence of encumbrances are conceded to be material to the risk, a false answer or concealment is fatal to the policy, irrespective of the intent of the insured. 2 Cooley, Briefs on Ins. pp. 1394, 1399, 1407, 1410; 19 Cyc. 801; 13 Am. & Eng. Enc. Law, 238; Peet v. Dakota F. & M. Ins. Co. 7 S.D. 410, 64 N.W. 206; Weddington v. Piedmont F. Ins. Co. 141 N.C. 234, 54 S.E. 271, 8 Ann. Cas. 497; German-American Ins. Co. v. Humphrey, 62 Ark. 348, 54 Am. St. Rep. 297, 35 S.W. 428; May, Ins. 292; Hawkes v. Dodge County Mut. Ins. Co. 11 Wis. 189; Smith v. Niagara F. Ins. Co. 60 Vt. 692, 1 L.R.A. 216, 6 Am. St. Rep. 144, 15 A. 353; Merrill v. Agricultural Ins. Co. 73 N.Y. 452, 29 Am. Rep. 184; Imperial F. Ins. Co. v. Coos. County, 151 U.S. 452, 38 L.Ed. 231, 14 S.Ct. 379, 1 May, Ins. 175, 176; Insurance Co. of N. A. v. Wicker, 93 Tex. 390, 55 S.W. 740; East Texas F. Ins. Co. v. Kempner, 87 Tex. 229, 47 Am. St. Rep. 99, 27 S.W. 122; McKernan v. North River Ins. Co. 206 F. 984; Northern Assur. Co. v. Grand View Bldg. Asso. 183 U.S. 308, 46 L.Ed. 213, 22 S.Ct. 133; Atlas Reduction Co. v. New Zealand Ins. Co. 9 L.R.A.(N.S.) 433, 71 C. C. A. 21, 138 F. 497; Mulrooney v. Royal Ins. Co. 90 C. C. A. 317, 163 F. 833; Gilchrist Transp. Co. v. Phoenix Ins. Co. 95 C. C. A. 475, 170 F. 279; Moore v. Phoenix Ins. Co. 62 N.H. 240, 13 Am. St. Rep. 556; Hunt v. Springfield F. & M. Ins. Co. 196 U.S. 47, 49 L.Ed. 381, 25 S.Ct. 179; Thompson v. Phoenix Ins. Co. 136 U.S. 287, 34 L.Ed. 408, 10 S.Ct. 1019; McMaster v. New York L. Ins. Co. 183 U.S. 25, 46 L.Ed. 64, 22 S.Ct. 10; Shillaber v. Robinson, 97 U.S. 68-78, 24 L.Ed. 967, 969; Charles v. Clagett, 3 Md. 82; Roper v. National F. Ins. Co. 161 N.C. 151, 76 S.E. 869; Black v. Atlantic Home Ins. Co. 148 N.C. 169, 21 L.R.A.(N.S.) 578, 61 S.E. 672; Shoucair v. North British & M. Ins. Co. 16 N. M. 563, 120 P. 328; Gray v. Guardian Assur. Co. 82 Hun, 380, 31 N.Y.S. 237; Jones & Pickett v. Michigan F. & M. Ins. Co. 132 La. 847, 61 So. 846.

Where the policy specifies certain acts as constituting an increase of hazard or risk so as to avoid the policy, and the facts are not in dispute, there is no question for the jury. 19 Cyc. 962, 769; 2 Cooley, Briefs on Ins. p. 1495.

Where there is a dispute, then what constitutes an increase of risk is essentially a question of fact. 2 Cooley, Briefs on Ins. p. 1495; Lebanon County v. Franklin F. Ins. Co. 237 Pa. 360, 44 L.R.A.(N.S.) 148, 85 A. 419, Ann. Cas. 1914B, 130; Girard F. & M. Ins. Co. v. Stephenson, 37 Pa. 293, 78 Am. Dec. 423; Martin v. Capital Ins. Co. 85 Iowa 650, 52 N.W. 534; Collins v. Merchants' & B. Mut. Ins. Co. 95 Iowa 540, 58 Am. St. Rep. 438, 64 N.W. 602; Pool v. Milwaukee Mechanics Ins. Co. 91 Wis. 530, 51 Am. St. Rep. 920, 65 N.W. 54; Kircher v. Milwaukee Mechanics' Mut. Ins. Co. 74 Wis. 470, 5 L.R.A. 779, 43 N.W. 487; Taylor v. Security Mut. F. Ins. Co. 88 Minn. 231, 92 N.W. 952; Orient Ins. Co. v. McKnight, 197 Ill. 190, 64 N.E. 339.

An insurance company may limit the powers of its agents. It was here done in clear and plain terms contained in the policy, and when plaintiff accepted the policy, it became the contract between the parties, and plaintiff was charged with a knowledge of all its terms. Sharman v. Continental Ins. Co. 167 Cal. 117, 52 L.R.A.(N.S.) 670, 138 P. 709.

Admissions and acts of agents, or notice received by them when acting in collusion with the third person, will not only create an estoppel as a matter of law, but likewise is not binding upon the principal either as a waiver, an admission, or even notice. 31 Cyc. 1573, 1596; 19 Cyc. 825.

Such provisions in a policy as are here mentioned are valid enforceable stipulations. They are a part of a lawful contract. 19 Cyc. 855.

If the assured has sworn wilfully to false statements in his proof of loss, as to his title or ownership, the policy will be avoided. Alfred Hiller Co. v. Insurance Co. of N. A. 125 La. 938, 32 L.R.A.(N.S.) 453, 52 So. 104, and cases cited.

The burden was upon plaintiff to establish the value of the property destroyed. This was not an affirmative defense for defendant to prove. 19 Cyc. 939, 946; McSparran v. Southern Mut. Ins. Co. 193 Pa. 184, 44 A. 317; Livings v. Home Mut. F. Ins. Co. 50 Mich. 207, 15 N.W. 85.

In order to establish a waiver, it must appear that the insurer had notice or full knowledge of the facts avoiding or forfeiting the insurance.

3 Cooley, Briefs on Ins. 2467, 2469, 2737; Ennis v. Retail Merchants Asso. Mut. F. Ins. Co. 33 N.D. 20, 156 N.W. 234; Pool v. Milwaukee Mechanics' Ins. Co. 91 Wis. 530, 51 Am. St. Rep. 920, 65 N.W. 54; McCormick v. Oriental Ins. Co. 86 Cal. 260, 24 P. 1003; Freedman v. Providence Washington Ins. Co. 175 Pa. 350, 34 A. 730.

Murphy & Toner, for respondent.

In general, where defendant relies on breach of warranties or conditions, it must allege the warranty or condition relied on as having been violated and the specific facts constituting such violation, and he must bring his case clearly within the conditions or warranties relied upon. Cassimus Bros. v. Scottish Union & Nat. Ins. Co. 135 Ala. 256, 33 So. 163; Phoenix Ins. Co. v. Barnd, 16 Neb. 89, 20 N.W. 105; Bittinger v. Providence Washington Ins. Co. 24 F. 549; Schaetzel v. Germantown Farmers' Mut. Ins. Co. 22 Wis. 412; Tischler v California Farmers' Mut. F. Ins. Co. 66 Cal. 178, 4 P. 1169...