Ocean Accident & Guarantee Corp. v. Albina Marine Iron Works

• Decision Date: 18 October 1927
• Citation: 122 Or. 615,260 P. 229
• Parties: OCEAN ACCIDENT & GUARANTEE CORPORATION, LIMITED, v. ALBINA MARINE IRON WORKS.
• Court: Oregon Supreme Court

260 P. 229

122 Or. 615

OCEAN ACCIDENT & GUARANTEE CORPORATION, LIMITED, v. ALBINA MARINE IRON WORKS.

Supreme Court of Oregon

October 18, 1927

Department 1.

Appeal from Circuit Court, Multnomah County; George Rossman, Judge.

Action by the Ocean Accident & Guarantee Corporation, Limited against the Albina Marine Iron Works. From a judgment for plaintiff, defendant appeals. Modified, and, as modified affirmed.

This action was instituted to collect premiums due on binders issued by plaintiff to defendant insuring defendant against loss by casualties. The rate was not fixed in the binder nor the amount of premium for such insurance stated. In lieu thereof one policy contained this statement: "Premium rate to be determined." The other policy contained this legend: "Premium rate various." Plaintiff charged the rate named in its schedule filed with the insurance commissioner under the provisions of section 6328, subd. 7 Or. L., as amended by chapter 155, Gen. Laws for 1921. Defendant contends that an agreement existed between defendant and plaintiff whereby the rate was to be the same as charged by another insurance company theretofore. The agreement, as claimed by defendant, was pleaded as an affirmative defense. A motion to strike that plea was sustained by the court. At the trial defendant offered to prove the same allegation. The proof was rejected on objection by plaintiff. Appellant states that the only question presented by this appeal is the ruling of the court on the motion to strike said affirmative defense and the order rejecting the evidence offered by defendant to prove that defense.

Frank S. Senn, of Portland (Senn & Recken, of Portland, on the brief), for appellant.

F. J Betz, of Portland (W. A. Robbins, of Portland, on the brief), for respondent.

COSHOW J. (after stating the facts as above).

The law of the land applicable thereto is a part of every valid contract. When plaintiff and defendant entered into the contract providing, "Premium rate to be determined," the law presumes that the rate was to be determined by the schedule of rates filed by plaintiff with the insurance commissioner. Under the statute no other rate could be lawfully exacted. Or. L. § 6328, subd. 7, as amended by chapter 155, Gen. Laws 1921; Or. L. §§ 6356, 6362, 6389, subd. 13; Rosenkrantz v. Barde, 107 Or. 338, 351, et seq., 214 P. 893; German Alliance Ins. Co. v. Lewis, 233 U.S. 389, 34 S.Ct. 612, 58 L.Ed. 1011, L. R. A. 1915C, 1189; Stephen Peabody, Jr., & Co., Inc., v. Travelers' Ins. Co., 240 N.Y. 511, 148 N.E. 661, 42 A. L. R. 1090. The same rule must be applied to the language, "Premium rate various," employed in the binder which is the basis of the second cause of action. It was not error, therefore, to strike from defendant's answer the allegation setting up a contract to charge the same rate some other company had previously charged defendant for similar insurance which was to be in any event a reasonable rate. The presumption is that the rates contained in the schedule of rates filed by plaintiff with the insurance commissioner are reasonable. That presumption is not traversed by the allegation stricken. In as far as the rate claimed by defendant deviates from such schedule rate, it is inconsistent with defendant's allegation that the rate to be charged was to be a reasonable rate. For the same reasons the court did not err in refusing offer of proof of the allegation stricken from the answer. It was an offer to prove an illegal contract to the extent the evidence offered tended to prove a rate charged by some other company which was less than the schedule of rates on file with the insurance commissioner at the time the contract of insurance was entered into by the parties.

Defendant urges that, if the contract to insure was at...