Theriault v. California Ins. Co. of San Francisco

• Decision Date: 08 June 1915
• Parties: E. I. THERIAULT, Respondent, v. THE CALIFORNIA INSURANCE COMPANY OF SAN FRANCISCO, a Corporation, Appellant
• Court: Idaho Supreme Court

149 P. 719

27 Idaho 476

E. I. THERIAULT, Respondent, v. THE CALIFORNIA INSURANCE COMPANY OF SAN FRANCISCO, a Corporation, Appellant

Supreme Court of Idaho

June 8, 1915

FIRE INSURANCE-"WATCHMAN CLAUSE"-PROOF OF LOSS-WAIVER-MISCONDUCT OF COUNSEL.

1. When the insured had employed two competent watchmen and, in good faith, instructed them to carefully watch the property and to guard against fire, both by day and by night, the condition of the "watchman clause" in the policy was fully complied with on the part of the insured.

2. Regardless of the clause in a policy that no officer, agent or other representative of the insurance company shall have the power to waive any of its provisions or conditions, where other proofs than those required in the policy are accepted by an agent, authorized to adjust a loss, the company will be deemed to have waived the provisions of the policy fixing the manner of making proof of loss.

3. A judgment should never be reversed by reason of misconduct of counsel at the trial, unless the appellate court is of the opinion such misconduct had prevailing influence upon the jury to the detriment of appellant.

APPEAL from the District Court of the First Judicial District for Shoshone County. Hon. William W. Woods, Judge.

Action upon fire insurance policy. Judgment for plaintiff. Affirmed.

Judgment affirmed. Costs awarded to respondent.

James A. Wayne, for Appellant.

"Inasmuch as an insurance adjuster has express authority to demand proofs of loss and to participate in an adjustment, his acts frequently give rise to an implied waiver from compelling the furnishing of such proofs or proceeding to enter into the business of adjustment when the insurer has knowledge of a right to forfeit the policy." (19 Cyc. 783; Douville v. Pacific Coast Casualty Co., 25 Idaho 396, 138 P. 506; Minneapolis Fire & Marine Mut. Ins. Co. v. Fultz, 72 Ark. 365, 80 S.W. 576; Stevens v. Citizens' Ins Co., 69 Iowa 658, 29 N.W. 769; Prussian Nat. Ins Co. v. Peterson, 30 Ind.App. 289, 64 N.E. 102; Germania Fire Ins. Co. v. Pitcher, 160 Ind. 392, 64 N.E. 921, 66 N.E. 1003; Brock v. Des Moines Ins Co., 106 Iowa 30, 75 N.W. 683.)

The provision of the policy that only a specific agreement indorsed thereon shall be construed as a waiver of any condition, and that "the agent" of the insuring company has no authority to waive any condition, does not preclude the company's adjuster from waiving a condition requiring the insured to furnish proof of loss. (Heusinkveld v. St. Paul Fire etc. Ins. Co., 106 Iowa 229, 76 N.W. 696.) The adjuster also has the authority to waive proof of loss. (Helvetia Swiss Fire Ins. Co. v. Edward P. Allis Co., 11 Colo. App. 264, 53 P. 242; California Ins. Co. v. Gracey, 15 Colo. 70, 22 Am. St. 376, 24 P. 577; Liverpool, London & Globe Ins. Co. v. Tillis, 110 Ala. 201, 17 So. 672; Slater v. Capital Ins. Co., 89 Iowa 628, 57 N.W. 422, 23 L. R. A. 181; Union Mut. etc. Ins. Co. v. Wilkinson, 13 Wall. (U.S.) 222, 20 L.Ed. 617.)

If the insured uses reasonable care and due diligence in employing competent watchmen, properly instructs them, and uses due care to see that continuous watch is kept, he complies with the terms of the policy. (McGannon v. Michigan Millers' Mutual Fire Ins. Co., 127 Mich. 636, 89 Am. St. 501, 87 N.W. 61, 54 L. R. A. 739; Burlington Fire Ins Co. v. Coffman, 13 Tex. Civ. 439, 35 S.W. 406; Hanover Fire Ins. Co. v. Gustin, 40 Neb. 828, 59 N.W. 375; Kansas Mill Owners' etc. Ins. Co. v. Metcalf, 59 Kan. 383, 53 P. 68; Sierra M. S. & M. Co. v. Hartford Fire Ins. Co., 76 Cal. 235, 18 P. 267; McGannon v. Millers' Nat. Ins. Co., 171 Mo. 143, 94 Am. St. 778, 71 S.W. 160; Mannheim Ins. Co. v. Clarke & Co. (Tex. Civ.), 157 S.W. 291; Phoenix Assur. Co. v. Coffman, 10 Tex. Civ. 631, 32 S.W. 810.)

John P. Gray, for Respondent.

The fact that the very employment of these watchmen by the respondent required them to work at a place from which the mining plant was not visible, together with the small remuneration promised them for their services as watchmen,--entirely insufficient to justify them in keeping a continuous watch at the property, and entirely insufficient to justify respondent in thinking that such men would keep a continuous watch at the property,--shows clearly that there was no bona fide effort made on the part of respondent to comply with the watchman clause of this policy, and was sufficient to preclude a recovery in this case. (Shoshone Concentrating Co. v. Hamburg-Bremen Fire Ins. Co., 64 Wash. 638, 117 P. 500; Rankin v. Amazon Ins. Co., 3 Cal. Unrep. 330, 25 P. 260, 89 Cal. 203, 23 Am. St. 460, 26 P. 872; Wenzel v. Commercial Ins. Co., 67 Cal. 438, 7 P. 817; McKenzie v. Scottish Union etc. Ins. Co., 112 Cal. 548, 44 P. 922; Kentucky Vermillion M. & C. Co. v. Norwich Union Fire Ins. Co., 146 F. 695, 77 C. C. A. 121; Ripley v. Aetna Fire Ins. Co., 30 N.Y. 136, 86 Am. Dec. 362; First Nat. Bank v. President etc. Ins. Co., 50 N.Y. 45; Blumer v. Phoenix Ins. Co., 45 Wis. 622.)

MORGAN, J. Sullivan, C. J., and Budge, J., concur.

OPINION

MORGAN, J.

On July 25, 1913, appellant, in consideration of $ 45, issued and delivered to respondent its certain policy of fire insurance in the sum of $ 1,500, whereby it insured for a period of one year a certain building together with mining and power machinery, tools, equipment, household goods and supplies therein contained, being the property of respondent. Another policy in the sum of $ 1,500 was written by the Springfield Fire and Marine Insurance Company of Springfield upon the same property, and these policies were so drawn that the loss, if any occurred, would be apportioned between the companies. On the 23d day of August, 1913, the combustible portion of the insured property was destroyed, and the incombustible portion was more or less damaged, by fire.

An action upon the policy in this case was commenced and it was alleged in the complaint that respondent's loss, due to the destruction of the property covered by the two policies, amounted to $ 2,737.30. Judgment was prayed for against the appellant in the sum of $ 1,368.65 and the trial resulted in a verdict and judgment in favor of respondent and against appellant in the sum of $ 1,258.23, from which judgment this appeal has been prosecuted.

The assignment of errors contains twenty-four specifications, which may be grouped under four heads:

1. The action of the court in denying the motion for a nonsuit and in denying the motion for a directed verdict, which motions were made upon the grounds that the provisions of the policy with reference to keeping a watchman upon duty and with reference to rendering written and verified proof of loss within sixty days had not been complied with by respondent.

2. The action of the court in giving certain instructions to the jury relative to waiver of notice and verified proof of loss, upon the ground that respondent, as contended by appellant, relied upon a compliance with the provisions of the policy and not upon a waiver thereof.

3. The action of the court in instructing the jury relative to the watchman clause in the policy, it being contended by the appellant that the court misdirected the jury as to the law applicable thereto.

4. The action of the court in permitting counsel for respondent to make remarks in the presence of the jury which, it is contended by appellant, were prejudicial to its rights and amounted to misconduct upon the part of respondent's counsel.

The respondent is the owner of a mine in the operation of which the insured property was used. A few days before the fire work at the mine and power-house was suspended and respondent went to his home at Avery, Idaho, about eight miles distant from the property in question. Before going he employed two men, Pressie and Snyder, to act as watchmen, agreed to pay them a dollar a day each for their services in that behalf, and instructed them to keep continual watch and to be very careful in regard to fire. There was a quantity of debris in the tunnel of the mine and respondent also employed Pressie and Snyder to remove it, agreeing to pay them the sum of $ 10 for that work.

The insured property was located about 300 feet from the portal of the tunnel and about 1,000 feet from the cabins where the men lived and could not be seen either from the tunnel or the cabins. The fire occurred about noon while the men were at their cabins at dinner.

The policy contains the following clause:

"It is warranted by the insured that whenever any of the following named parts of the plant described in this policy, to wit: power-house, is idle or not in operation from any cause whatsoever, competent watchmen shall be employed and due diligence used to keep a continuous watch both day and night in and immediately about said part of the plant. If any of the above-named parts is idle or not in operation for a period of more than thirty (30) days without the written consent of this company, this policy shall be void."

It is not contended by appellant that the men who were employed as watchmen were incompetent, but it is earnestly urged that their employment to clean out the tunnel was inconsistent with their employment as watchmen; that they could not fulfill their contract to remove the debris from the tunnel and continuously watch the insured property. The testimony does not bear out this contention. The work in the tunnel was not of such a nature as to require the presence of both men (the testimony shows that the material was removed with a wheelbarrow); neither was the job of such magnitude as to require the absence of either of them from the insured property for a great length of time. Snyder testified on cross-examination as follows:

"Q. How many days after Mr. Theriault left...