Wanberg v. Nat'l Union Fire Ins. Co.

• Decision Date: 16 October 1920
• Citation: 46 N.D. 369,179 N.W. 666
• Parties: WANBERG v. NATIONAL UNION FIRE INS. CO.
• Court: North Dakota Supreme Court

46 N.D. 369

179 N.W. 666

WANBERG

v.NATIONAL UNION FIRE INS. CO.

Supreme Court of North Dakota.

Oct. 16, 1920.

Syllabus by the Court.

Section 4902, Comp. Laws 1913, which provides that every insurance company engaged in the business of insuring against loss by hail shall be bound and the insurance take effect from and after 24 hours from the day and hour of application unless it shall notify the applicant by telegram of the rejection of his application, applies to an insurance company taking an application for hail insurance along with additional risks.

Section 4902, Comp. Laws 1913, the substance of which is above stated, imposes a duty upon insurance companies doing a hail insurance business of acting promptly upon such applications. It is within the police power of the state and does not deprive insurance companies of liberty of contract or property without due process of law.

Where a statute in substance provides the form of an application for hail insurance with respect to the time when insurance shall be made effective, the benefit of the statute is not waived by an unauthorized, conflicting provision contained in the application.

Appeal from District Court, Williams County; Fisk, Judge.

Action by Robert Wanberg against the National Union Fire Insurance Company. Judgment for plaintiff, and defendant appeals. Affirmed.

Robinson, J., dissenting.

Barnett & Richardson, of Fargo, for appellant.

Wm. G. Owens, of Williston, for respondent.

BIRDZELL, J.

This is an action in which the plaintiff seeks to recover insurance covering a hail loss. On July 12, 1917, at 10 o'clock in the morning, the plaintiff gave to one Everson, a local agent for the defendant, an application for insurance on his crops in the sum of $1,400, paying a premium therefor of $140. The application, so far as material to this case, reads as follows:

“I, Robert Wanberg, of Tioga P. O. county of Williams, state of No. Dak., hereby make application for insurance to take effect from the day this application is received and accepted, as evidenced by the issuance of a policy thereon, at the Waseca, Minnesota, agency for said company, and to end on the 15th day of September, 1917, upon growing crops against loss, damage or failure from hail or any other cause except fire, floods, winter kill or failure on my part to properly prepare the ground for seeding and properly seed, care for, harvest, protect and thresh said crop during the crop season of 1917 to the amount of fourteen hundred dollars. * * *”

On July 13, 1917, Everson mailed the application and the premium remittance to the defendant at Waseca, Minn. It was received in the Waseca post office on Sunday, July 15th, and delivered Monday, July 16th. On the preceding Saturday, July 14th, shortly after 6 o'clock in the evening, the damage from hail for which recovery is sought occurred. On July 17th the defendant's agent at Waseca mailed the application and premium remittance to Everson, stating that applications for crop insurance would not be accepted at that late date. There is no evidence that the Waseca agency at that time knew that the plaintiff had already incurred loss. When the application and premium were tendered back to the plaintiff, the tender was refused and this action brought. The case was tried to the court without a jury and resulted in a judgment for $1,405.85 and costs. Motion for a judgment non obstante or for a new trial was denied, and the defendant appealed from the judgment and order.

[1] The case turns upon section 4902, C. L. 1913. That section reads:

“Every insurance company engaged in the business of insuring against loss by hail in this state, shall be bound, and the insurance shall take effect from and after twenty-four hours from the day and hour the application for such insurance has been taken by the authorized local agent of said company, and if the company shall decline to write the insurance upon receipt of the application, it shall forthwith notify the applicant and agent who took the application, by telegram, and in that event, the insurance shall not become effective. Provided, that nothing in this article shall prevent the company from issuing a policy on such application and putting the insurance in force prior to the expiration of said twenty-four hours.”

It is first claimed that, as this statute imposes a liability outside of that which may be covered by an insurance policy or by a contract, it should be strictly construed, and when strictly construed it will be found to have no application to a proposal for insurance other than for a straight hail insurance policy. Since the application in question covers loss from all causes other than a few excepted ones, it is claimed that the statute does not apply. We are of the opinion that there is no merit in this contention as applied to the facts in this case, for the reason that the application was one for hail insurance as well as other insurance and the loss was occasioned through hail. To adopt the construction contended for by the appellant would readily lead to defeating the policy of the statute, which could be done by merely linking another insurance risk with hail insurance. The statute is clearly intended to cover all applications for hail insurance, and this is such an application.

[2] It is next argued that the statute violates the provisions of article 1, § 13, of the state Constitution, and the fourteenth amendment to the federal Constitution, in that it works a deprivation of liberty of contract and property without due process of law. It is said that the statute operates to transform a mere proposal or offer into a completed contract obligation without affording to one of the parties thereto the option of acceptance or rejection. It is recognized that there is a class of obligations which are implied in law without regard to the assent of the party bound, but it is contended that the obligation imposed here is not properly included within such class. This contention must be examined in the light of the policy evidenced by the statute.

The business of insurance is subject to legislative regulation in the interest of the public. The regulations prescribed by different legislative bodies indicate the broad scope of legislation designed to protect the public. Standard forms of policies are prescribed; investments regulated; deposits required; rates of premiums fixed (German Alliance Ins. Co. v. Lewis, 233 U. S. 389, 34 Sup. Ct. 612, 58 L. Ed. 1011, L. R. A. 1915C, 1189); liability established for the amount of the policy regardless of the value of the property at the time of destruction (Orient Ins. Co. v. Daggs, 172 U. S. 577, 19 Sup. Ct. 281, 43 L. Ed. 552); defenses such as suicide may be cut off though expressly stipulated for in the policy (Whitfield v. Ætna Life Ins. Co., 205 U. S. 489, 27 Sup. Ct. 578, 51 L. Ed. 895). Upon similar principles we are of the opinion that the Legislature can recognize other practices in connection with the insurance business which tend to operate prejudicially to the class of patrons and prescribe regulations for their protection. The statute in question recognizes the practical necessity for a prompt decision upon hail insurance applications. It is generally known that the premium covers the risk for the season and that the practice of writing hail insurance differs somewhat in this respect from other forms of insurance, where either an annual premium or a term rate is...