The German Insurance Company v. The Emporia Mutual Loan and Savings Association

• Decision Date: 14 February 1900
• Docket Number: 360
• Citation: 59 P. 1092,9 Kan.App. 803
• Parties: THE GERMAN INSURANCE COMPANY, OF FREEPORT, ILL., v. THE EMPORIA MUTUAL LOAN AND SAVINGS ASSOCIATION
• Court: Kansas Court of Appeals

59 P. 1092

9 Kan.App. 803

THE GERMAN INSURANCE COMPANY, OF FREEPORT, ILL., v. THE EMPORIA MUTUAL LOAN AND SAVINGS ASSOCIATION

No. 360

Court of Appeals of Kansas

February 14, 1900

Decided February, 1900.

Error from Harvey district court; MATTHEW P. SIMPSON, judge.

Judgment of district court reversed.

SYLLABUS

1. CONTRACTS -- Agency -- Ratification -- Failure to Repudiate. A person may become bound by a contract which another, without authority, has assumed to make in his name by knowingly accepting its benefits or by failing to repudiate it after he has full knowledge of all the facts.

2. FIRE INSURANCE -- Additional Insurance -- Acceptance of Benefits. In the absence and without the knowledge of H., the plaintiff's assignor, his wife procured additional insurance on the property covered by the policy sued upon herein, which contained a provision rendering it void if additional insurance should be procured without the insurer's consent indorsed thereon, and after loss of the insured property by fire H. received the benefits of the additional insurance. Held, that acceptance of the benefits of the unauthorized act was a ratification thereof, relating back to its date and binding H. and assignee to the same extent as if he had himself procured the additional insurance.

3. -- Forfeiture -- Collection of Premium. Where a policy of fire insurance is forfeited by the acts of the insured after part of the premium has been earned the entire premium is treated as earned, and its subsequent collection by the insurer is not a waiver of such forfeiture.

A. L. Green, and Barnett & Barnett, for plaintiff in error.

E. W. Cunningham, for defendant in error.

OPINION

MILTON, J.:

This action was brought in the district court of Reno county upon a policy of insurance for $ 1000, issued on February 11, 1896, by the plaintiff in error to one Christian Hess, covering his dwelling-house in Halstead, Kan. On the 24th of April in the same year the property was destroyed by fire, and shortly after this Hess assigned the policy to the defendant in error, plaintiff below, in whose favor judgment was thereafter rendered for the face of the policy with interest.

The only defense to the action urged in this court is that the policy was made void by the act of Hess in procuring, on April 4, 1896, without the consent of the defendant below, additional insurance on the property in the Phenix Insurance Company, of Brooklyn. The policy sued upon and that issued by the Phenix Insurance Company each provided, in substance, that if the assured should, without the written permission of the insurer indorsed on the policy, then have or thereafter make or procure any other contract of insurance, whether valid or not, covering the same property, the policy should be void. The insurance written by the Phenix company was procured by the wife of Christian Hess, without his knowledge or consent, during his absence in Oklahoma, and he did not learn of the transaction until after the loss by fire had occurred. Thereafter he assigned both policies to defendant in error, which effected a compromise of the claim against the Phenix company, the latter paying the sum of $ 350, for which the defendant in error gave Hess credit, he being indebted to it in a much larger sum. In his proofs of loss Hess stated the foregoing facts concerning the additional insurance. It is contended by the plaintiff in error that, in receiving the benefits of the insurance procured by his wife, Hess adopted and ratified her act in the premises, with the result that the policy sued upon was rendered void. The contention is sound, and is supported by the following cases: McElvy v. Insurance Co., Appellant, 161 Pa. 279, 28 A. 1115; DeFoe v. Johnston Insurance Co., 7 Upper Canada Com. Pleas Rep. 55; Hughes v. Ins. Co. of North America, 40 Neb. 626, 59 N.W. 112. These cases are based upon the principle which is thus declared by the supreme court of Iowa in the case of Eikenberry & Co. v. Edwards, 67 Iowa 14, 24 N.W. 570:

" One may become bound by a contract which another, without authority, has assumed to make in his name, by knowingly accepting its benefits, or by failing to repudiate it within a reasonable time after he is fully informed of the act."

In McKelvy v. Insurance Co., supra, the additional insurance was taken out by the wife of the assured without his knowledge or consent and he did not learn of it until after the loss. He failed clearly to disclose the fact of the additional insurance when making his first proof of loss but did so in the second proof, some five months after the fire, and then repudiated the later insurance. The court held that the insured, on learning of the second insurance, should have promptly repudiated it, and having failed so to do, he had ratified the same and it constituted other insurance, avoiding the policy sued upon. In DeFoe v. Johnston Insurance Co., supra, the assured collected money upon the second policy, which, without his knowledge or consent, had been procured by his father. Referring to the proper course of the assured upon discovery of the additional insurance, the court said:

"His course in such a case would be clear. Immediately on discovering it he could repudiate the act and decline any benefit under it. In the case before us the plaintiff chose to at once ratify and adopt the assurance made, as is alleged, by his father in his name. He received large sums of money under it. . . . The act of the agent is assumed as the act of the principal from the beginning. It is considered as wholly done with his assent, and as he is willing to receive the benefit, he must take all the legal consequences."

In the case of Hughes v. Ins. Co. of North America, supra to overcome the defense that the policy sued upon was avoided by additional insurance taken out in violation of its provisions, it was shown that one Hynes, who was the agent of Hughes for the purpose of renting and looking after the insured property, and who had no authority to procure insurance thereon, had taken out the additional insurance without the knowledge of his principal, who did not learn of such fact until after the loss occurred. Shortly after the fire Hughes made a settlement with the company from which Hynes had procured the policy, receiving a...