Steele v. German Ins. Co. of Freeport

• Citation: 53 N.W. 514,93 Mich. 81
• Court: Supreme Court of Michigan
• Decision Date: 04 October 1892
• Parties: STEELE v. GERMAN INS. CO. OF FREEPORT.

53 N.W. 514

93 Mich. 81

STEELE v. GERMAN INS. CO. OF FREEPORT.

Supreme Court of Michigan

October 4, 1892

Error to circuit court, Ionia county; VERNON H. SMITH, Judge.

Action by James A. Steele against the German Insurance Company of Freeport, Ill., to recover, upon a policy of insurance, for loss by fire. Judgment for plaintiff. Defendant brings error. Affirmed.

George S. Steere, for appellant.

Davis & Nichols, for appellee.

MCGRATH J.

This action is upon a Michigan standard policy, which contains the following provisions: "The sum for which this company is liable pursuant to this policy shall be payable sixty days after due notice, ascertainment, estimate, and satisfactory proof of loss have been received by this company in accordance with the terms of this policy. * * * If fire occur, the insured shall give immediate notice of any loss thereby in writing to this company * * * and within sixty days after the fire, unless such time is extended in writing by this company, shall render a statement ordinarily denominated 'proofs of loss.' * * * The loss shall not become payable until sixty days after the notice, ascertainment, estimate, and satisfactory proof of the loss herein required have been received by this company." The policy contains a number of other distinct paragraphs limiting the liability of the company. One provides that the entire policy shall be void if the insured has concealed or misrepresented any material fact, or if he has misrepresented his interest, or in case of any fraud or false swearing by the insured touching any matter relating to the insurance or the subject thereof, whether before or after the loss; another declares that the entire policy shall be void upon the happening of any one of 14 contingencies; another provides that "this company shall not be liable for loss" in a number of enumerated cases; another that in a certain contingency the insurance shall cease; another that the company shall not be liable for losses to certain classes of property, enumerating them, unless, etc. Then follows the provision that "no suit or action on this policy shall be maintainable in any court of law or equity until after full compliance by the insured with all the foregoing requirements, nor unless commenced within twelve months next after the fire." This latter provision clearly refers to such requirements in the policy as relate to the notice of loss, proofs, and adjustment of the loss; and its evident intent is to provide that no suit can be maintained unless commenced within one year, and in no event until after compliance with such requirements. The use of the words "until after" distinguishes this case from the Gould Case, (Mich.) 51 N.W. 455, and brings it within the rule laid down in the Tubbs Case, 84 Mich. 646, 48 N.W. 296. The effect of misstatement, of changed condition and contingency, of omission and commission, of fraud and false swearing, is explicitly declared in each other paragraph in which the act. omission, or contingency is referred to; even the effect of false swearing in the proofs of loss is specifically declared, but the paragraph relating to proofs of loss suggests no penalty. This omission in an instrument replete with clear and explicit declarations of forfeiture is worthy of note. The presence of the declaration of forfeiture in every other instance, and its absence in this, is clearly not an oversight. Time is not made the essence of the provision relating to proofs, and in the paragraph relied upon by defendant the words "until after" import order or sequence, rather than an intent to make performance within the time specified the essence of the requirement. The selection of this phraseology seems to me inconsistent with such a purpose. The language has reference to the thing to be done before suit brought, rather than the time within which it is to be done. It is therefore unnecessary to consider the question of waiver. Upon the other points I concur with Mr. Justice GRANT, and the judgment should be affirmed, and it is so ordered.

LONG, J., did not sit. MORSE, C.J., and MONTGOMERY, J., concurrred with MCGRATH, J.

GRANT J., (dissenting.)

This is an action to recover upon a policy of insurance for loss by fire. Four objections are raised against the judgment, viz.: (1) Plaintiff, in his application, represented that there was no other insurance upon the property; (2) there was other insurance without the consent of the defendant; (3) proofs of loss were not made and rendered within 60 days after the fire; (4) recovery was allowed for goods not covered by the policy.

1. The evidence on the part of the plaintiff showed that defendant's local agents who placed this insurance had also placed the other insurance complained of; that they knew it at the time; that plaintiff, at the time of the making of the application, so informed them; that the defendant's agents, through their clerk, wrote out the application. It is the settled rule in these cases that the agents for insurance companies, in making out these applications, do not represent the insured, but the insurer, and that the consequences of the failure to incorporate the necessary statement in the application must fall upon the insurer, and not upon the insured, who has made an honest statement of the facts. Russell v. Insurance Co., 80 Mich. 407, 45 N.W. 356; Gristock v. Insurance Co., 84 Mich. 161, 47 N.W. 549; Gristock v. Insurance Co., 87 Mich. 428, 49 N.W. 634; O'Brien v. Insurance Co., 52 Mich. 131, 17 N.W. 726. No question of waiver upon the first two points is involved. The clerk of the local agents wrote out the application, and to him plaintiff said that there was no other insurance except what they themselves had placed upon the property. This testimony was objected to as incompetent, upon the ground that the acts of and statements made to and by said clerk were not binding upon the defendant. The precise claim is that the local agents cannot redelegate their authority to clerks, unless such authority to delegate is conveyed in express terms. In general, this is true, but courts will recognize the ordinary course of business. It must be well known that these local agents do their business to a very large extent through clerks, who solicit insurance, make out applications and policies, and generally attend to the business of their employers. In such cases their acts are as binding as though done by the agents themselves. Story, Ag. � 14; Insurance Co. v. Ruckman, 127 Ill. 364, 20 N.E. 77; Bodine v. Insurance Co., 51 N.Y. 117; Bennett v. Insurance Co., 70 Iowa, 600, 31 N.W. 948.

2. This was a Michigan standard policy, and contained the following provision: "If fire occur, the insured shall give immediate notice of any loss thereof in writing to this company; * * * make a complete inventory of the property stating the quantity and cost of each article, and the amount claimed thereon; and within sixty days after the fire, unless such time is extended in writing by this company, shall render a statement to this company, signed and sworn to by said insured, stating the knowledge and belief of the insured as to the time and origin of the fire; the interest of the insured and all others in the property; the cash value of each item thereof, and the amount of loss thereon; all incumbrances thereon; all other insurance, whether valid or not, covering any of said property; and a copy of all the descriptions and schedules in all policies; any changes in the title, use, occupation, location, possession, or exposure of said property since the issuing of this policy; by whom and for...