The Ins. Co. of North Am. v. Garland

• Decision Date: 16 June 1883
• Citation: 108 Ill. 220,1883 WL 10374
• Parties: THE INSURANCE COMPANY OF NORTH AMERICAv.HELEN N. GARLAND.
• Court: Illinois Supreme Court

108 Ill. 220

1883 WL 10374 (Ill.)

THE INSURANCE COMPANY OF NORTH AMERICA

v.HELEN N. GARLAND.

Supreme Court of Illinois.

Filed at Ottawa Jun. 16, 1883.a1

OPINION TEXT STARTS HERE

APPEAL from the Appellate Court for the First District;--heard in that court on appeal from the Circuit Court of Cook county; the Hon. MURRAY F. TULEY, Judge, presiding.

Messrs. MILLER, LEWIS & BERGEN, for the appellant:

Before a company can be said to have waived a condition in its policy by recognizing its obligation after the condition has been violated, it must appear that this recognition was made upon full knowledge of the fact that the condition has been violated. Allen, Safford & Co. v. Vermont Mutual Fire Ins. Co. 12 Vt. 336; Wood on Insurance, sec. 496; Finley v. Lycoming Ins. Co. 30 Pa. St. 313; Mershon v. National Ins. Co. 34 Iowa, 87; Phœnix Ins. Co. v. Stevenson, 78 Ky. 156.

A waiver can not be implied unless the language or act of the insurer is such as fairly leaves the assured to understand that nothing further is required to be done by him. Wood on Insurance, sec. 496, p. 834.

Where the assignee of a policy, who had purchased the property insured, called upon the agent and informed him of that fact, and the agent told him to bring the policy and he would indorse consent to the transfer thereon, which the plaintiff failed to do, it was held that there was no waiver, because what the agent said was merely confirmatory of the condition, and required the assignee to do precisely what the policy required. Equitable Ins. Co. v. Cooper, 60 Ill. 507.

Mr. J. BLACKBURN JONES, for the appellee:

Although the condition, by its terms, provides that the policy shall be “void” on a breach thereof, its legal effect is simply to render it voidable at the election of the insurers. If they do not elect to avoid it, neither the insured nor third parties could treat it as void, and the insurers could waive the forfeiture and continue the policy in force. New England Fire and Marine Ins. Co. v. Schettler, 38 Ill. 166; David v. Hartford Ins. Co. 13 Iowa, 69; Keenan v. Missouri State Mutual Ins. Co. 12 Id. 126; Bigler v. New York Central Ins. Co. 22 N. Y. 402; Atlantic Ins. Co. v. Goodall, 35 N. H. 328; Carpenter v. Prov. Wash. Ins. Co. 16 Pet. 509; Coursen v. Pennsylvania Ins. Co. 46 Pa. St. 323; Frost v. Saratoga Ins. Co. 5 Denio, 154; Clark v. Jones, 1 Id. 516; Cartwright v. Gardener, 5 Cush. 281; Warner v. Peoria Ins. Co. 14 Wis. 323; Miner v. Phœnix Ins. Co. 27 Id. 699; Commercial Ins. Co. v. Spankneble, 52 Ill. 53; Viele v. Germania Ins. Co. 26 Iowa, 53; Insurance Co. v. Stockbower, 26 Pa. St. 199.

Waiver of a condition need not be in writing. Viele v. Germania Ins. Co. 26 Iowa, 53; 1 Greenleaf on Evidence, secs. 302-304; 2 Phillips on Evidence, (Cowan, Hill & Edward's notes,) 692, note, 505; Fleming v. Gilbert, 3 Johns. 528; Merrill v. Ithaca and Oswego R. R. Co. 16 Wend. 586.

Any course of dealing whereby the assured was led to believe that the condition was dispensed with or forfeiture waived, will be sufficient to preclude the setting up of the breaches of the condition as a defence. Viele v. Germania Ins. Co. 26 Iowa, 53; North Berwick Co. v. Insurance Co. 52 Maine, 336; Franklin v. Atlantic Fire Ins. Co. 42 Id. 456; Columbia Ins. Co. v. Cooper, 50 Pa. St. 331; Lycoming Ins. Co. v. Stockbower, 26 Id. 199; Wing v. Harvey, 27 Eng. L. & Eq. 140; Frost v. Saratoga Mutual Ins. Co. 5 Denio, 154; Ames v. New York Union Ins. Co. 26 N. Y. 263; Liddle v. Market Fire Ins. Co. 28 Id. 184; New York Ins. Co. v. National Protection Ins. Co. 20 Barb. 468; Bœhen v. Williamsburg Ins. Co. 35 N. Y. 131; Goit v. National Protection Ins. Co. 25 Barb. 189; Commercial Ins. Co. v. Spankneble, 52 Ill. 53.

Mr. JUSTICE MULKEY delivered the opinion of the Court:

This is an appeal from a judgment of the Appellate Court affirming a decree of the circuit court of Cook county, in favor of Helen L. Garland, the appellee, and against the Insurance Company of North America, the appellant, for the sum of $3000, the amount of a loss by fire, under a policy of insurance issued by the company to Maria G. McConnell on her dwelling house, on the 23d day of November, 1876, and by her assigned, with the consent of the company, to appellee, less the sum of $1746, the amount of a certain mortgage upon the insured premises, then held by the company.

After the issuing of the policy, and but a few days before the 23d of January, 1878, Mrs. McConnell, the assured, sold and conveyed the premises to Mrs. Garland, the appellee, and thereupon moved out, leaving them vacant and unoccupied, in which condition they so remained until the time of their destruction by fire, on the 25th of September, 1879, being a period of some twenty months. The policy, among others, contained this provision: “And if the assured shall allow the building herein insured to become vacant or unoccupied, and so remain, * * * unless the consent of this company be indorsed hereon, this policy shall become void.” On the 23d of January, 1878, and but a short time after the sale and transfer of the property to appellee, her husband, John C. Garland, called at the company's office for the purpose of obtaining the company's assent to the transfer of the policy, which, after some little delay, by reason of the policy not being present, was indorsed thereon in these words:

“The property hereby insured having been purchased by Helen L. Garland, the Insurance Company of North America consents that the interest of Maria G. McConnell in the within policy may be assigned to said purchaser, subject, nevertheless, to all the terms and conditions therein mentioned and referred to.

C. H. CASE, Agent.”

Garland's account of what occurred at the company's office is as follows: “After the purchase of this property from McConnell, and after the McConnells had moved out of the house, I called at the office of Mr. Case, agent of this company, whose name is signed to the policy, at No. 120 La Salle street, to have the insurance transferred from Mrs. McConnell to Mrs. Garland, and the clerk at the desk said that I would be obliged to bring the policy before the insurance could be transferred on their books. I remarked to the clerk that it was late in the afternoon, and I had just got knowledge that the house was vacant, and desired to have the transfer made. The clerk remarked that they could put it on their book,--put the transfer on their books,--but it would not be legal without I had the policy with Mrs. McConnell's signature attached, and if the house was vacant I had better attend to that part of the business, because it would not amount to anything if the house was destroyed,-- they would not be liable for any loss. I then went out to find McConnell, and found him. Got his wife's signature to the assignment on the back of the policy. It was signed by Mr. McConnell, who said he was his wife's agent. I then took the policy back to Mr. Case's office, and they wrote on it their transfer. The policy was then taken back in where Mr. Case was sitting, and signed by him, and brought and handed to me.” In answer to the question, “Now state again precisely what you said, if anything, with reference to the property being vacant?” he further said: “I told this clerk that I wanted the transfer put on the books that day, because the property was vacant, and it had just come to my knowledge that the McConnells had moved out of it and moved into the city.”

Upon this state of facts it is claimed by appellee that the company having assented to the transfer of the policy in the manner stated, with notice that the insured premises were at the time of such transfer vacant and unoccupied, was in law a waiver of the condition which declares the policy void upon the happening of such contingency,--and so the Appellate Court held. We do not think the evidence, or a proper construction of that clause of the policy, warrants the conclusion reached. We see nothing in Garland's statement of what occurred at the company's office that would justify the inference that the company intended a waiver of that condition in the policy. There was certainly nothing said by any one present to warrant that conclusion,--so that if the position can be maintained at all, it must be solely on the ground that the consent of the company, having notice of the fact the property was at the time unoccupied, is of itself, in law, a waiver of the condition. We are aware of no authority sustaining this view, and certainly none has been cited going that length. We do not understand that a policy having a condition in it like the one under consideration becomes absolutely void by reason of the premises becoming vacant or unoccupied. Nor do we understand that in case of a breach of the condition of the policy in this respect the company is bound, at its peril, upon notice of such breach, to declare the policy forfeited for that reason, even conceding it has the power to do so, of which it is unnecessary now to express any opinion. And it is well settled if the company should not exercise this power while the assured is in default, and the premises should again become occupied, its right to do so would cease, and its liability on the policy would again attach. Schmidt v. Peoria Marine and Fire Ins. Co. 41 Ill. 295; Insurance Company of North America v. McDowell, 50 Id. 120; Westchester Fire Ins. Co. v. Foster, 90 Id. 121.

Now, the object of the company in assenting to the transfer of the interest of the assured in the policy to the purchaser was clearly nothing more than to place the latter in the same position, with respect to all rights and liabilities under it, that the assured herself occupied before such transfer. Suppose Mrs. McConnell had simply vacated the property without selling it or assigning the policy, and it had remained vacant until the loss by fire in the same way it did, and this action had been brought by her instead of Mrs. Garland, and the company had invoked the...