The Gold Issue Mining & Milling Co. v. Pennsylvania Fire Insurance Co., of Philadelphia

• Decision Date: 10 April 1916
• Parties: THE GOLD ISSUE MINING & MILLING COMPANY v. PENNSYLVANIA FIRE INSURANCE COMPANY OF PHILADELPHIA, Appellant
• Court: Missouri Supreme Court

184 S.W. 999

267 Mo. 524

THE GOLD ISSUE MINING & MILLING COMPANY v. PENNSYLVANIA FIRE INSURANCE COMPANY OF PHILADELPHIA, Appellant

Supreme Court of Missouri

April 10, 1916

Appeal from Audrain Circuit Court. -- Hon. J. D. Barnett, Judge.

Affirmed.

David H. Robertson, Lewis & Grant and Fred Herrington for appellant.

(1) The court erred in permitting the witness Doepke to testify, over defendant's objections, to conversations between witness and defendant's agent had prior to and at the time of the issuance of the policy with reference to the effect and binding force of the terms and conditions thereof. All such prior conversations were merged in the subsequently issued policy under the familiar rule of evidence, that parol contemporaneous evidence is inadmissible to contradict or vary the terms of a valid written instrument. Ijams v Providence Ins. Soc., 185 Mo. 466; Graham v. Merc Ins. Co., 110 Mo.App. 95; Gillum v. Fire Assn., 106 Mo.App. 673; Riley v. Ins. Co., 117 Mo.App. 229; Dircks v. Ins. Co., 34 Mo.App. 43. (2) The court erred in permitting the witness Doepke to testify, over defendant's objections, to conversations between witness and the agent of insurer had after the policy was issued and while the property was occupied and in operation, as to shutting down operations and vacating the property at some time in the future, for a longer period than permitted under the terms of the policy, for the purpose of showing a waiver of the requirements of the policy in that respect. Such conversations, before the vacancy occurred, were inadmissible for the reason that such conversations or any agreement then made could have no effect, because there could be no waiver of a forfeiture until after the ground of forfeiture had occurred. That "a waiver is a voluntary relinquishment of a known right" is familiar law. Rogers v. Ins Co., 155 Mo.App. 276; Patterson v. Ins. Co., 174 Mo.App. 37; Patterson v. Ins. Co., 164 Mo.App. 157. (3) The court erred in refusing to instruct a verdict for the defendant at the close of the evidence for the plaintiff, and at the close of all the evidence, and the verdict is contrary to the law and the evidence. Because it is undisputed that no actual notice of the facts sought to be charged to the principal was ever given to the latter and the notice to and knowledge of the agent cannot be, in law, imputed to the principal. Bank v. Nichols, 223 Ill. 41; Cowen v. Curran, 216 Ill. 598; Booker v. Booker, 208 Ill. 529. (a) The agent, to the knowledge of the insured, had an interest adverse to his principal. Bank v. Nichols, 223 Ill. 41; Cowen v. Curran, 216 Ill. 598; Booker v. Booker, 208 Ill. 529; Safe Dep. Co. v. Lord, 67 N.J.Eq. 489; Bank v. Bridges, 39 Okla. 359; Bank v. Miller, 229 U.S. 517. (b) The agent was acting in collusion with and in the interest of the insured and against the interest of his principal. Scripture v. Ins. Co., 20 Tex. Civ. App. 153; Ins. Co. v. Minch, 53 N.Y. 150; Pennoyer v. Willis, 26 Ore. 1; Terry v. Cotton Co., 138 Ga. 656. (c) The agent was attempting to act as the agent of both parties without the knowledge or consent of his principal. Fiske v. Royal Exch. Assn. Co., 100 Mo.App. 545; Ins. Co. v. Ins. Co., 138 N.Y. 446; Ramspeck v. Patillo, 104 Ga. 772; Rockford Ins. Co. v. Winfield, 57 Kan. 576. (4) The court erred in instructing the jury in effect that if they found from the evidence that, prior to the institution of this suit, plaintiff paid all necessary corporation fees to the State of Colorado and obtained from the Secretary of State of Colorado a certificate of authority to do business in the said State, the fact that plaintiff had not paid said fees and obtained said certificate of authority prior to its alleged acquisition of title to the property in question, or prior to the issuance of the policy in suit, or prior to the fire, was immaterial. Respondent did not have title to the ground on which the insured buildings stood at the time of the issuance of the policy and, hence the policy is void. Overton v. Ins. Co., 79 Mo.App. 1; Roberts v. Ins. Co., 26 Mo.App. 92; Holloway v. Ins. Co., 48 Mo.App. 1; Brenner v. Ins. Co., 99 Mo.App. 718; Appendix, 3 Mo.App. 603; Ins. Co. v. Manning, 160 F. 382; Lane v. Parsons, Rich & Co., 97 Minn. 98. (5) The court erred in overruling defendant's motion to quash the writ and in refusing to sustain the defense, set forth in the first paragraph of defendant's answer, which defense was based upon the grounds that the Superintendent of the Insurance Department of the State of Missouri, upon whom service was attempted to be made, was not authorized by the laws of Missouri to acknowledge or receive service of process for the defendant in this action and that Sec. 7042, R. S. 1909, is unconstitutional and void, because it denies to the defendant due process of law as guaranteed to it by the Constitution of Missouri and by section 1, article 14, Constitution of United States. Simon v. Southern Ry. Co., 236 U.S. 115; Old Wayne Life Assn. v. McDonough, 204 U.S. 22; Harkness v. Hyde, 98 U.S. 476; Southern Pac. Co. v. Denton, 146 U.S. 202; Goldey v. Morning News, 156 U.S. 518; Mechanical Appliance Co. v. Castleman, 215 U.S. 437; Cain v. Pub. Co., 232 U.S. 124.

Percy Werner and Sutton & Huston, amici curiae.

Fauntleroy, Cullen & Hay, Fry & Rodgers and Fred D. Shaw for respondent.

(1) The insurance company is estopped to claim a forfeiture of the policy for the reason the mill was shut down at the time of the fire and waived the necessity for permission for the shutting down of the mill to be in writing endorsed upon the policy. Hyman v. Ins. Co., 42 Colo. 156; Nixon v. Ins. Co., 2 Colo.App. 265; Thompson v. Ins Co., 169 Mo. 12; Rissler v. Ins. Co., 150 Mo. 366; Huestess v. Ins. Co., 70 S.E. 406; Millis v. Ins. Co., 95 Mo.App. 211; Rudd v. Ins. Co., 120 Mo.App. 1. (2) Colorado has a like rule. There, as here, if the agent who wrote the policy knows of any fact existing which will cause a forfeiture of the policy and causes the assured to rely upon the fact that the policy will not be avoided, the insurance company is estopped to claim a forfeiture. Wich v. Ins. Co., 2 Colo.App. 488; Nixon v. Ins. Co., 2 Colo.App. 265; Hyman v. Ins. Co., 42 Colo. 162; Allis v. Ins. Co., 11 Colo.App. 264; Smith v. Ins. Co., 3 Colo. 422; Taylor v. Ins. Co., 14 Colo. 499; Strauss v. Ins. Co., 42 P. 822; Donlon v. Ins. Co., 16 Colo.App. 416; Kittenring v. Assn., 22 Colo. 257; Strauss v. Ins. Co., 9 Colo.App. 386. (3) Kilpatrick & Hanley were the alter ego of the insurance company, and their knowledge of the fact that the factory was shut down and their assurances to Doepke that it was "all right" is a waiver. Thompson v. Ins. Co., 169 Mo. 25; Rissler v. Ins. Co., 150 Mo. 368; Shutts v. Ins. Co., 159 Mo.App. 441; Prentice v. Ins. Co., 77 N.Y. 487; Wooldridge v. Ins. Co., 69 Mo.App. 413; Hyman v. Ins. Co., 42 Colo. 156; Crouse v. Ins. Co., 79 Mich. 249; Andrus v. Ins. Co., 91 Minn. 358; Hart v. Ins. Co., 9 Wash. 620; Haight v. Ins. Co., 92 U.S. 51; Burnham v. Ins. Co., 63 Mo.App. 85; Montgomery v. Ins. Co., 80 Mo.App. 500; Ross Langford v. Ins. Co., 97 Mo.App. 79. (4) Policy is not void by reason of the plant being shut down, but only voidable, and the insurance company must cancel and return unearned premium. Not having done so, policy continues in force. Patterson v. Ins. Co., 176 Mo.App. 37; Flannigan v. Ins. Co., 46 N.Y.S. 687; Springfield Co. v. Ins. Co., 151 Mo. 98; Miller v. Ins. Co., 106 Mo.App. 211; Anthony v. Ins. Co., 48 Mo.App. 73; Brix v. Ins. Co., 171 Mo.App. 518; Smith v. Ins. Co., 3 Colo. 422. (5) Accepting premium after fire is a waiver of any violation of policy after the agent of the insurance company knew of it. Flannigan v. Ins. Co., 46 N.Y.S. 687; Raddin v. Ins. Co., 120 U.S. 195; Baker v. Ins. Co., 77 F. 550; Ins. Co. v. Wolff, 95 U.S. 326; Freeman v. Ins. Co., 47 S.W. 1025. (6) This mortgage did not render the policy void, only voidable at the election of the insurance company. It only suspended the policy while the mortgage was upon the property. As soon as the mortgage was paid the policy revived and was in full force and effect at the time of the fire. Brix v. Ins. Co., 171 Mo.App. 518; Obermeyer v. Ins. Co., 43 Mo. 579; Born v. Ins. Co., 110 Iowa 379; Viele v. Ins. Co., 26 Iowa 9. (7) The fact that the record did not show a satisfaction of the mortgage is immaterial. If the mortgage was paid off, it ceased to be an encumbrance. Hawkes v. Ins. Co., 11 Wis. 188; Schreck v. Ins. Co., 27 Neb. 527; Vanlue v. Ins. Co., 26 N.E. 119; Born v. Ins. Co., 110 Iowa 379. (8) Kilpatrick, the company's agent, who wrote the policy, knew that the mortgage was filed of record. Under such circumstances the insurance company waived its right to claim that the policy was void by reason of such mortgage. Hvman v. Ins. Co., 42 Colo. 156; Weinberger v. Ins. Co., 170 Mo.App. 270; Rissler v. Ins. Co., 150 Mo. 368; Laundry Co. v. Ins. Co., 151 Mo. 98; Thompson v. Ins. Co., 169 Mo. 28. (9) Notice to Kilpatrick, the company's agent, before the fire, that Peters held the $ 25,000 mortgage on the property was notice to the company. Where one agent represents several companies, what he knows is imputed to all. Hyman v. Ins. Co., 42 Colo. 156; Mesterman v. Ins. Co., 5 Wash. 524; Hamilton v. Ins. Co., 94 Mo. 355; Russell v. Ins. Co., 55 Mo. 585; Howitz v. Ins. Co., 40 Mo. 557. (10) Another defense which the insurance company urges is based upon its claim and assertion that Doepke, the president of the respondent, knew that Kilpatrick, the agent of the insurance company, was betraying his principal by withholding the information of the existence of the aforesaid mortgages, and of the fact that the plant was shut down and was idle. That therefore Doepke was "in collusion" with Kilpatrick...