Thompson v. Traders' Insurance Company of Chicago

• Citation: 68 S.W. 889,169 Mo. 12
• Parties: THOMPSON v. TRADERS' INSURANCE COMPANY OF CHICAGO, Appellant
• Decision Date: 21 May 1902
• Court: United States State Supreme Court of Missouri

68 S.W. 889

169 Mo. 12

THOMPSON v. TRADERS' INSURANCE COMPANY OF CHICAGO, Appellant

Supreme Court of Missouri, First Division

May 21, 1902

Appeal from Jackson Circuit Court. -- Hon. Edw. P. Gates, Judge.

Modified and affirmed.

Fyke Yates & Fyke for appellant.

(1) Evidence of statements made to or by defendant's agent concerning other insurance before the policy was issued was clearly inadmissible, and evidence of statements after the policy was issued of an intention to procure other insurance when able, was also clearly inadmissible. A written contract can not be so varied. Drake v. Dodsworth, 4 Kan 159; Connell v. Railroad, 25 Kan. 613; Brenner v. Luth, 28 Kan. 581; Hopkins v. Railroad, 29 Kan. 544; Windmill Co. v. Piercy, 41 Kan. 763; Willard v. Ostrander, 46 Kan. 591; Lock Co. v. Huston, 55 Kan. 104; Commercial Assur. Co. v. Norwood, 57 Kan. 610; 47 P. 529. Knowledge of intention to procure other insurance in the future is no waiver. Eagle F. Co. v. Globe L. and T. Co., 44 Neb. 380; Ins. Co. v. Wood, 50 Neb. 381; Gray v. Ins. Co., 155 N.Y. 180; Ins. Co. v. Mowry, 96 U.S. 544; Weidish v. Ins. Co., 24 P. 242. (2) Defendant's demurrer at the close of plaintiff's evidence should have been sustained because there is no evidence in the cause showing, or tending to show, that proofs of loss were made as required by the policy, and the making of proofs of loss is a condition precedent to plaintiff's right to recover. Norman v. Ins. Co., 21 Mo. 81; Sims v. Ins. Co., 47 Mo. 54; Leigh v. Ins. Co,. 37 Mo.App. 542; Ins. Co. v. Hathaway, 23 P. 428; Ins. Co. v. Tharp, 28 P. 991. (3) It stands admitted that plaintiff had procured other insurance, and there is no substantial evidence that such violation of the policy had been waived. The policy then ceased to exist. Rothchild v. Ins. Co., 62 Mo. 256; Carpenter v. Ins. Co., 16 Pet. (U. S.) 495; Sun Fire Office v. Clark, 33 Ohio St. 414; March v. Ins. Co., 28 Ins. L. J. 30; Brown v. Ins. Ass'n, 28 Ins. L. J. 321; Williamson v. Ins. Co., 105 F. 31; Aloe v. Mutual Reserve, 147 Mo. 501; Hutcheson v. Ins. Co., 21 Mo. 97; Dietz v. Ins. Co., 38 Mo. 85. (4) Evidence introduced by plaintiff as to the value of attorney's fees was improperly admitted for the reason that under the law no attorney's fees are recoverable. The statute imposing a penalty upon a certain class of litigants, not imposed upon other classes, and which deprives them of the equal protection of the law, is unconstitutional and void. Paddock v. Railroad, 155 Mo. 524; Railroad v. Ellis, 165 U.S. 150. (5) Mere notice to defendant's agent that other insurance had been procured, and no objection on their part, does not constitute a waiver or estoppel. Ins. Co. v. Johnson, supra. The authority of the agent was expressly limited by the contract; notice of such limitation was brought home to plaintiff by the plain terms of the policy, which he presumably read. No sound reason can be urged why he is not bound by such limitation. Fletcher v. Ins. Co., 117 U.S. 519; Mitchell v. Ins. Co., 51 P. 402; Lowell v. Ins. Co., 8 Cush. 127; Reynolds v. Ins. Co., 36 Mich. 381; Messeneau v. Ins. Co., 66 N.Y. 274; Marvin v. Ins. Co., 85 N.Y. 278; Bank v. Ins. Co., 62 Tex. 461; Catoir v. Ins. Co., N. J. 487; Cleaver v. Ins. Co., 65 Mich. 527; Ins. Co. v. Wolf, 95 U.S. 326; Maier v. Fidelity, 78 F. 566; Hamilton v. Fidelity Mut. Association, 27 A.D. 480; Kyte v. Ins. Co., 144 Mass. 43; Carey v. Ins. Co., 54 N.W. 1; Wilkins v Ins. Co., 45 N.W. 18; Quinlan v. Ins. Co., 33 N.Y. 356; Armstrong v. Ins. Co., 130 N.Y. 560; Baumgartel v. Ins. Co., 136 N.Y. 547; Ins. Co. v. Gibbons, 22 P. 1016; Cleaver v. Ins. Co., 32 N.W. 660; Kellerman v. Railroad, 136 Mo. 177; O'Bryan v. Kinney, 74 Mo. 125; Smith v. Express Co., 63 Mo. 376; McFadden v. Railroad, 92 Mo. 343. (6) When plaintiff took additional insurance in November, 1898, without notice to defendant, the policy became void. It is not pretended that defendant had any knowledge of such fact prior to May 4, 1889, so that said policy had been void under the undisputed evidence from November until May. What gave it new life? It remained void. Ins. Co. v. Johnson, supra; Ins. Co. v. Gunther, 116 U.S. 113; Ins. Co. v. Coas Co., 151 U.S. 452; Fabyan v. Ins. Co., 33 N.H. 203; Moore v. Ins. Co., 62 N.H. 240; Mack v. Ins. Co., 106 N.Y. 560; Kyte v. Ins. Co., 149 Mass. 116.

F. F. Rozzelle, Frank P. Walsh and John G. Park for respondent.

(1) It is undisputed that Thompson told Newhall, defendant's general agent, when he contracted for this insurance, that he wanted and intended to take more than $ 1,000 insurance, but was not able to take it then, and Newhall said his property was worth more than $ 1,000 and the amount of this policy was insufficient. Newhall had authority to waive or strike from the policy both the provision against additional insurance and the provision requiring an indorsement in writing, and having done so, defendant can not now claim a forfeiture. He was "the alter ego of the company, and what he did was the same as if the company was present acting for itself." James v. Life Ass'n, 148 Mo. 11; Parsons v. Ins. Co., 132 Mo. 583; Wolf v. Ins. Co., 86 Mo.App. 580. (2) Maxwell was defendant's agent and his knowledge was defendant's knowledge. R. S. 1899, sec. 8000; State ex inf. v. Ins. Co., 152 Mo. 38; James v. Mut. Fund Ass'n, 148 Mo. 1; Nickell v. Ins. Co., 144 Mo. 1; Lingenfelter v. Ins. Co., 19 Mo.App. 265; Wolf v. Ins. Co., 86 Mo.App. 580; Turner v. Ins. Co., 86 Mo.App. 387. "When the general agent of defendant acquired knowledge of the events upon which the policy was forfeitable, good faith and fair dealing rendered it his duty, if he intended to insist upon a forfeiture, to cancel the policy and return the unearned premiums, to the end that plaintiff should receive his due on the abrogation of the contract and have an opportunity to obtain other insurance. His failure to take such action and his retention of the full consideration of the contract naturally led the assured to believe that it was deemed a continuing obligation on the part of defendant." Trust Co. v. Ins. Co., 79 Mo.App. 366. This is, and always has been, the rule in Kansas. Ins. Co. v. Davis, 59 Kan. 526; Ins. Co. v. Munger, 49 Kan. 194; Ins. Co. v. Gray, 43 Kan. 497; Ins. Co. v. Bank, 50 Kan. 449; Ins. Co. v. McLanthan, 11 Kan. 553. Neither Maxwell nor defendant made any objection to this insurance and defendant has kept the entire premium to this day. These facts create an estoppel precluding the assertion of a forfeiture because of the additional insurance. Nickell v. Ins. Co. 144 Mo. 420; Laundry Co. v. Ins. Co., 151 Mo. 90; James v. Life Ass'n, 148 Mo. 1; Hamilton v. Ins. Co., 94 Mo. 353; Cromwell v. Ins. Co., 47 Mo.App. 109; May on Ins. (4 Ed.), sec. 370; Pelkington v. Ins. Co., 55 Mo. 171. (3) The conduct of defendant, its officers and agents, in dealing with plaintiff after the loss, was in the highest degree vexatious. The demands made on defendant by plaintiff's attorneys were competent to show plaintiff's desire to settle without litigation, and defendant's determination to ignore the acts of its agents, which plainly render it liable. The question of whether or not defendant had vexatiously refused to pay the loss was for the jury. Lockwood v. Ins. Co., 47 Mo. 50; Brown v. Assur. Co., 45 Mo. 221. (4) The measure of damages in the case is regulated by the law of the forum and is provided by the Laws of 1899, p. 254. R. S. 1899, sec. 8012. Carson v. Smith, 133 Mo. 616; P. P. Am. Co. v. Carriage Co., 64 Ark. 29, 40 S.W. 583; 2 Kent's Com. (13 Ed.), 462; Jones v. Jones, 18 Ala. 248. (5) Defendant is a foreign corporation doing an insurance business in this State. It does business here not by right, but by grace, and must conform to the requirements of our laws. As a condition to that right, it must pay ten per cent as damages and a reasonable attorney's fee when it vexatiously refuses to pay a loss. The State has the right to fix this condition, and the following decisions have declared statutes imposing similar burdens on insurance companies constitutional: Life Ass'n v. Yoakum, 98 F. 251; Ass'n Co. v. Bradford, 60 Kan. 82; Ins. Co. v. Bayha (Kan. App.), 55 P. 474; Ins. Co. v. Bush, 60 Neb. 313; Ins. Co. v. Cornell, 110 F. 816. (a) The case of Paddock v. Railroad, 155 Mo. 524, cited by counsel, is based on Railroad v. Ellis, 165 U.S. 150. The Supreme Court of the United States, while not distinctly overruling the Ellis case, has arrived at a different result, in later cases in construing statutes similar to that involved here. It has declared constitutional: a State statute imposing attorney's fees in actions against railroads for destroying property by fire (Railroad v. Mathews, 174 U.S. 104); a State statute imposing double damages on railroads for failure to promptly pay laborers (Railroad v. Paul, 173 U.S. 404); our statute authorizing recovery of double damages for failure to fence railroads (Railroad v. Humes, 115 U.S. 512); a statute fixing employer's liability (Tullis v. Railroad, 175 U.S. 351); a state statute excluding foreign corporations (Oil Co. v. Texas, 177 U.S. 43); Am. Sugar Ref. Co. v. Louisiana, 179 U.S. 95; W. W. Cargill Co. v. Minnesota, 180 U.S. 467. (b) Other courts have held constitutional: an act imposing double damages on corporations when not paying laborers promptly (Skinner v. Mining Co., 96 F. 744); an act requiring railroad companies condemning rights of way to pay attorney's fees (Gano v. Railroad, 87 N.W. 714); an act providing that a breach of condition in a policy shall not avoid it unless the company has been injured (McGannon v. Ins. Co., 87 N.W. 61). (6) (a) The petition averred generally a performance of the conditions imposed by the policy. A specific allegation of giving of notice and...