The Commercial Union Assurance Company v. Norwood

• Decision Date: 08 January 1897
• Docket Number: 9191
• Citation: 57 Kan. 610,47 P. 529
• Court: Kansas Supreme Court
• Parties: THE COMMERCIAL UNION ASSURANCE COMPANY v. O. F. & E. R. NORWOOD

47 P. 529

57 Kan. 610

THE COMMERCIAL UNION ASSURANCE COMPANY v. O. F. & E. R. NORWOOD

No. 9191

Supreme Court of Kansas

January 8, 1897

Decided January, 1897.

Error from Pawnee District Court Hon. S.W. Vandivert, Judge.

REVERSED AND REMANDED.

THIS action was brought by O. F. and E. R. Norwood, partners against the Commercial Union Assurance Company, Limited, of London, England, on a $ 2,500 policy of insurance on a stock of merchandise in Larned, Kansas. Attached to the plaintiffs' petition is a copy of the policy, which contains this provision:

"This entire policy, unless otherwise provided by agreement indorsed hereon, or added hereto, shall be void if the insured now has, or shall hereafter make or procure any other contract of insurance, whether valid or not, on property covered in whole or in part by this policy."

A copy of the proofs of loss furnished by the plaintiffs to the defendant was also attached to the petition, from which it appears that a slip was attached to the policy, reading as follows: "$ 32,500 additional insurance allowed in form and concurrent herewith. This slip is attached to and forms a part of policy No. 100,115 of the Commercial Union Assurance Company of London, England. Larned, Kansas, Nov. 2, 189.... J. H. ORMANDY, agent." The proofs also show that at the time of the fire there was other insurance on the property to the amount of $ 35,800 under 13 policies issued by other companies at various dates from October 1, 1891, to January 26, 1892. The property was totally destroyed by fire on the 7th of February, 1892.

The defendant answered, alleging for a third defense that the policy contained the provision above copied, and averred that the amount of concurrent insurance was expressly limited, by the indorsement on the policy, to $ 32,500, that the plaintiffs procured other insurance in excess of the amount permitted, and that the policy was thereby rendered void. To this answer the plaintiff replied:

"That they contracted with the agent of the defendant, authorized by the defendant so to contract, for said insurance under a statement and agreement, made at the time and concurrent with said contract and a part thereof, that the total insurance including the policy issued by the defendant, upon the property insured of the plaintiffs, should amount in the aggregate to the sum of $ 40,000; and that the policy of the defendant to be issued to the plaintiffs should contain an agreement for such additional and concurrent insurance as that the policy to be issued by the defendant would amount in the aggregate to the sum of $ 40,000; and that, thereafter and upon the receipt of said policy, the plaintiffs relying upon said contract and agreement so made as aforesaid received and accepted said policy from the defendant upon the belief that said agreement had been fully carried out, and that said policy permitted concurrent and additional insurance so as aforesaid agreed upon, and so relying on such contract and agreement the plaintiffs wholly neglected and failed to read said policy until after the occurrence of the fire which destroyed the property covered thereby; that, by reason thereof, and of the facts aforesaid, the defendant ought not now to be permitted to assert as a defense in this action the facts set forth in the third defense contained in said answer, for that it is estopped to deny its liability on the grounds and for the reasons therein stated."

The defendant demurred to this part of the reply, which demurrer was overruled. The case was tried to a jury. O. F. Norwood, one of the plaintiffs, testified that, in the fall of 1890, he purchased the stock of goods and made arrangements with Mr. Ormandy and Mr. Charles for insurance on it to the amount of $ 40,000, and that he took out policies to that amount running for one year:

"Q. This policy is dated 21st of November, 1891. Prior to that time, what, if any, talk had you with Mr. Ormandy,-- this same man who signed this policy -- as to insurance from that fall on, or from the time your other policies expired, which had been taken out in 1890? A. Mr. Ormandy came into the store, and wanted to know about the insurance; he came into the store and wanted to know if he could have the insurance again, and I told him he could; and I wanted permission to carry $ 40,000 of insurance on the stock.

"Q. What further was said about how much he was to carry, or, how much anyone else was to carry? A. I asked him then, after Smith had been there to see me, I asked him whether we had better let Smith have $ 10,000, and he said, very well, let him have $ 10,000.

"Q. What amount did he say he would take, if any? A. $ 30,000.

"Q. What arrangement, if any, was made as to how these policies were to be issued by him? A. I told him I wanted him to scatter them out, so as not to let the premiums all come due at once. I told him I wanted the premiums to come due in, say, two, three and four weeks, such like, so I wouldn't have the premiums to pay all at once.

"Q. You may state if he delivered you any policy of insurance afterward. A. Yes, sir, he did.

"Q. State from whom you received this policy in suit. A. J. H. Ormandy.

"Q. You may state whether, at the time you received it, you read its terms and conditions or not. A. I did not.

"Q. You may state what you did with it when you received it. A. I put it in the safe with some others that I had there.

"Q. When you told Mr. Ormandy that you wanted $ 40,000 of insurance for the succeeding year, in the fall of 1891, what did he say about writing that much insurance on the stock? A. He said that we could have it; that he would make the policies out to that effect; that we should be permitted to carry the $ 40,000 on the stock.

"Q. You may state if you knew, at the time you received this policy, that the policy, by its terms, limited the concurrent insurance to $ 32,500? A. No, sir, I did not.

He further testified that he had no further conversation with Ormandy with reference to the amount of insurance; that Ormandy brought in the policies from time to time, and that he thought he got ten policies through him.

The jury were instructed that if they found that Ormandy was the general agent of the Company, and that the plaintiffs had no notice of any limitation on his authority,--

"That if the said Ormandy agreed with the plaintiffs to issue to them policies of insurance to the extent of $ 30,000 upon the property covered by the policy in controversy, and that such policies should show the right to have the total insurance upon such property to the amount of $ 40,000; and if you should further find that pursuant to such agreement the policy in question was issued, and that plaintiffs received the same without knowledge of the fact that the additional insurance provided therein was limited to an amount much less than the amount of insurance upon said property, and that they, relying on said agreement, received said policy, and paid the defendant, through its said agent, Ormandy, the premium charged, then, and in such case, you are instructed that the fact that there was $ 37,500 of a total insurance upon the property covered by said policy would not avoid said policy, notwithstanding the conditions therein contained."

The jury rendered a general verdict in favor of the plaintiffs for the full amount of the policy, and also returned answers to special...