Morrison v. Insurance Co. of North America

• Decision Date: 20 December 1887
• Citation: 6 S.W. 605
• Court: Texas Supreme Court
• Parties: MORRISON <I>et al.</I> v. INSURANCE CO. OF NORTH AMERICA.

Page 605

6 S.W. 605

MORRISON et al. v. INSURANCE CO. OF NORTH AMERICA.

Supreme Court of Texas.

December 20, 1887.

Appeal from district court, Ellis county; ANSON RAINEY, Judge.

Action by A. M. and Dan Morrison against the Insurance Company of North America, a corporation under the laws of Pennsylvania, on a policy of insurance. Judgment for defendant, and plaintiffs appeal.

Edwards & Fears, for appellants. G. C. Groce, for appellee.

STAYTON, J.

Every policy-holder, in the absence of fraud, misrepresentation, or concealment, must be held to have knowledge of its contents when he has opportunity to examine it before he accepts it. The pleading in which the appellants sought to excuse themselves from obligation to comply with the terms of the policy, on the ground that they were ignorant of its contents, not alleging fraud, misrepresentation, or concealment, the court did not err in sustaining an exception to it. The printed terms and conditions embodied in the policy were in very fine print, but, from the fac simile found in the transcript, it appears that they were legible; and it would be holding a very dangerous rule to assert that a party may be excused from being held to have knowledge of a contract to which he is a party, and under which he claims rights, by the fact that the instrument evidencing the contract is difficult to read. Every person having capacity to make a contract, in the absence of fraud, misrepresentation, or concealment, must be held to have known what the words used in a contract made by him were, and to have known their meaning; and he must also be held to have known and fully comprehended the legal effect of the contract which the words used made. Contracts for insurance do not furnish exceptions to these rules.

The appellants, by their pleadings, undertook to declare the legal effect of certain provisions in the policy sued upon, making a fac simile of the policy a part of the pleading, and the court sustained an exception to so much of it. In this there was no error; for the pleadings of parties should state facts, and the averments of legal conclusions drawn from the facts stated are in no manner necessary to the full presentation of the right claimed.

The third section of the printed part of the policy contained the following provision: "The procuring of insurance on said property for more than its cash value, or the having of other insurance thereon, or any part thereof, valid or invalid, prior or subsequent, not made known to this company, and consented to hereon, * * * will render this policy null and void." The contract for insurance was made through one McCarty, the agent of the company, at Ennis, Texas, and the policy, which was signed by the president and secretary of the company and by McCarty, provided that "this policy shall not be valid unless countersigned by said company's duly-authorized agent at Ennis, Texas." This agent of appellee was shown to have and exercise power to "issue and cancel policies for it, make renewals and indorsements of other insurance when necessary, and collect premiums." The appellee is a corporation resident in the state of Pennsylvania, and incorporated under its laws. Such an agent was a general agent, whose knowledge was the knowledge of the company whose agent he was, and by whose acts, within the scope of his powers, his principal would be bound. After the policy was issued, the appellants without the previous consent of the agent, or any other person authorized to give the consent of the appellee, obtained insurance on the property covered by the policy in question. The defense was that this subsequent insurance, obtained without the consent of the company, evidenced by an indorsement on the policy, rendered it null. The appellants pleaded, and offered to prove, that A. M. Morrison, one of the plaintiffs, immediately informed McCarty, defendant's agent, of the "other insurance" complained of; that he made no objection thereto, but promised at his earliest convenience to indorse such "other insurance" on the policy; that the notice was given for the purpose of procuring such indorsement; that plaintiffs relied on said agent's promise, and believed he would perform every duty necessary for their protection; that afterwards, and just before their loss, McCarty arranged with them to renew the policy at its expiration, after being again informed of the amount of insurance they were carrying, and the value of their stock; that he insisted upon making renewal; that he made a memorandum of the renewal in writing, but not on the policy; that he did not object to the amount of insurance carried by plaintiffs on their stock, but was eager to renew the policy at its expiration; that from McCarty's conduct they believed their policy to be in force up to the time of the loss. The policy having been made an exhibit to the appellants' pleadings, the court sustained an exception to so much of the pleadings as set up these matters, upon the ground that no consent of the agent to subsequent insurance, under the terms of the policy, could be shown otherwise than by an indorsement on it. The appellants filed a trial amendment, in which they alleged that the agent, since the policy issued, had been given other power than such as the policy gave, and that under this the acts of the agent pleaded would bind the company. There was no evidence, however, offered to sustain this last pleading, and, because of this, the evidence above referred to was excluded, and the court directed the jury to return a verdict for the defendant.

Under the provision of the policy which we have set out, and the evidence showing the nature of the agency of McCarty, if nothing further affecting the power of the agent was contained in the policy, the case of Insurance Co. v. Griffin, 59 Tex. 509, would be conclusive of the liability of the appellee under the facts alleged and proposed to be proved. We see no reason to doubt the correctness of the decision made in that case, which is well sustained by the cases therein cited, as well as by the following: Insurance Co. v. McCrea, 8 Lea, 513; Carrugi v. Insurance Co., 40 Ga. 140; Insurance Co. v. Young, 58 Ala. 476; Pierce v. Insurance Co., 50 N. H. 297; Gans v. Insurance Co., 43 Wis. 111; Insurance Co. v....