Murphy v. Cont'l Ins. Co.

• Decision Date: 10 May 1916
• Docket Number: No. 30712.,30712.
• Parties: MURPHY v. CONTINENTAL INS. CO.
• Court: Iowa Supreme Court

178 Iowa 375

157 N.W. 855

MURPHY

v.CONTINENTAL INS. CO.

No. 30712.

Supreme Court of Iowa.

May 10, 1916.

Appeal from District Court, Iowa County; R. P. Howell, Judge.

Action for indemnity on an insurance policy resulted in a directed verdict for defendant and judgment thereon. The plaintiff appeals. Reversed.W. E. Wallace, of Williamsburg, for appellant.

Stapleton & Stapleton, of Marengo, for appellee.

LADD, J.

The defendant issued its policy of insurance to plaintiff on February 19, 1912, agreeing to indemnify him against “loss or damages by fire $700 on farming utensils, cream separator, mowers, harvesters, reapers, corn binders, farm and garden tools (other than threshers, clover hullers, and engines) on the premises of the assured, * * * $500 on hay in stacks on cultivated premises on farm herein described * * * situated (except as otherwise above provided) and confined to premises described in application, occupied by assured, * * *440 acres, sections 28, 29, 33, township 81, range 11, county of Iowa, state of Iowa.”

The plaintiff had purchased a new windmill several years previous and stored it in his corncrib until he could put it up. Stock scales had been taken down and stored in an old granary. Both buildings with their contents were destroyed August 20, 1913. A few days previous hay estimated at 30 tons in a barn situated on what is designated the Hall farm was burned. This Hall farm was operated under oral lease by the assured when the policy issued and until bought by him June 7, 1913.

[1] I. The policy among other things insured the barn and “$100 on hay therein.” This was the fifth item, and the twelfth item read, “$500 on hay in stacks on cultivated premises on farm herein described.” In the application, instead of “on cultivated premises,” as in the policy, the words “or cultivated premises” followed “farm,” and plaintiff testified that after preparing the application it was found the insurance was not rightly distributed on hay, and that the agent added the words as stated, and explained that by changing the application the policy would cover all hay the insured raised, and it was alleged in an amendment to the petition that they agreed:

“That said policy was to cover and insure all hay that plaintiff might raise or produce on said sections, and that said written insertion was made with mutual intention and understanding to cover their agreement as aforesaid to cover all such hay.”

But the insured must be assumed to have known that the application was not the contract, and that the policy for which he was applying would state the terms of their agreement. The insured does not contend that any fact was misrepresented or that any fraud was practiced on him by the agent. His contention is that, the agent having advised what the policy would insure, the company is estopped from asserting otherwise. To construe or interpret the policy issued or to be issued is no part of the agent's duty. In Dryer v. Insurance Co., 94 Iowa, 471, 62 N. W. 798, the insured testified that the agent told him that he could move his property to any place in the county by giving notice to the company and in denying liability for loss of property elsewhere than covered by the policy the court, speaking through Robinson, J., said:

The agent “appears to have been only a soliciting agent, and, if that was his true character, it was no part of his duty, and not within the scope of his powers, to contract for his principal, to construe its policies, or to determine their legal effect. As he was a special agent, not clothed with any apparent right to do more than to solicit insurance, and to perform such acts as were incident to that power, the plaintiff was charged with knowledge of the limitations of his agency, and was not authorized to give any contractual effect to the statements he made. His principal was bound by the knowledge he had when the application was prepared and accepted, but not by statements he made outside the scope of his apparent powers.”

In Cornelius v. Insurance Co., 113 Iowa, 184, 84 N. W. 1037, the agent had represented that for an additional premium he would make the application so that the property would be insured when vacant, and we there said:

“It thus appears that the application contained no misstatement of any existing fact or past transaction, nor did it omit any. What was said related solely to an anticipated, though no settled, use of the property. It was an arrangement as to conditions of the policy, with which a soliciting agent had nothing to do, rather than a representation of the existing or past conditions of the property to be insured. That such an agent has no authority to make a binding contract for insurance, or what shall be the provisions of a policy, is too well settled to require any citations. The scope of his authority is limited to taking applications, and as, within this, it is his duty to see that the condition of the property is truly and fully disclosed when he undertakes to prepare them for the assured, the company may not take advantage of omissions or misstatements of facts or conditions affecting the risk. Fitchner v. Association, 103 Iowa, 280 . But whatever he may say as to the effect of the policy or what it shall cover, or of its conditions, is mere opinion on his part, pertaining to matters wholly without the scope of his employment. Talks and agreements in reference to matters of future performance are merged in, and presumed to be expressed in, the policy, which, as in the case of other written contracts, becomes effective as the consummation of their wishes and intentions by its delivery on the part of the company and acceptance by the assured. Moore v. Insurance Co., 72 Iowa, 416 [[;Baldwin v. State Ins. Co., 60 Iowa, 497 ;Stephens v. Insurance Co., 87 Iowa, 283 ; Ostrander, Insurance, 186. Nor can anything he may impart concerning a future contingency operate as an estoppel against the insurer. This is: First, because he is given no such authority; and, secondly, for the reason that the doctrine of estoppel is never applied save where the representation relates to a present or past fact, or state of facts, unless it has reference to an intended abandonment of an existing right, upon which another has relied.”

[2] Here there was no misrepresentation of or omission to state any fact of which the company would be assumed to know from the knowledge of its agent. See Funk v. Insurance Co., 153 N. W. 1048. What the agent undertook was to tell the assured what the policy would cover, and this was clearly beyond the scope of his agency. In so far as appears from the record, the only evidence bearing thereon was that he solicited the insurance and prepared the application which was signed by the assured. This was the work of a soliciting agent, and, in the absence of evidence that he possessed powers in excess of those exercised therein, it ought not to be assumed that he was something more. In other words, we cannot assume without proof that the agent was endowed with authority to say what the policy in response to the application will be or its meaning. It was retained by the assured without objection and without claim, but that he was aware of its contents. Unless it covered the hay put in the barn, then there can be no recovery for loss of the hay. The insurance was on “hay in stack” only. A stack of hay, grain, straw, or the like is a large quantity thereof collected and usually built up in layers in conical, oblong, or rectangular form to a point or ridge at the top so that it will be preserved against the inclemencies of weather. See People v. Boyle, 13 Cal. App. 611, 110 Pac. 458;Farmers' Mutual v. Reser, 43 Ind. App. 634, 88 N. E. 349. Of course, it may be stacked under cover or cover may be placed over it. In Farmers' Mutual v. Reser, supra, it was stacked in a shed. In Regina v. Munson, 2 Cox, C. C. 186, haulm was stacked under cover in a building which had been used as a stable. The accused insisted that there was a variance between the charge of having set fire to a stack of haulm and the proof, but Coleridge, J., said:

“I do not think it essentially...