West v. Norwich Union Fire Ins. Soc.

• Decision Date: 27 July 1894
• Citation: 37 P. 685,10 Utah 442
• Court: Utah Supreme Court
• Parties: West v. Norwich Union Fire Insurance Society

37 P. 685

10 Utah 442

West v. Norwich Union Fire Insurance Society

Supreme Court of Utah

July 27, 1894

OPINION

BARTCH, J.:

Certain property belonging to the plaintiff having been destroyed by fire, he brought this action to recover the amount of an insurance policy issued thereon by the defendant. The jury returned a verdict assessing the plaintiff's damages at $ 1,600, and judgment was rendered thereon accordingly. Upon the overruling of a motion for a new trial, the defendant appealed both from the judgment and order denying a new trial.

It appears from the record, substantially, that the policy sued upon was issued by the defendant company on the 6th day of February, 1892, and was a renewal of a policy which was about to expire, and upon which was indorsed, "Permission for other insurance concurrent herewith;" that the Utah Loan & Trust Company of Ogden city was the agent of the defendant and wrote these policies of insurance; that there was also another policy of insurance at the same time, on the same property, in another company, of which the Utah Loan & Trust Company was also the agent; that the property insured was on leased ground, and was destroyed by fire on the 24th day of March, 1892; that at the time of the fire the Ogden State Bank had a chattel mortgage on the property, but made no claim of any indebtedness due from plaintiff by reason of the mortgage; that, at the time the policy in question was issued, the agent of the defendant knew of the existence of the mortgage, and that the property insured was on leased ground, and promised plaintiff to make the proper indorsement on the policy, but failed to do so; that after the fire the agent of the defendant introduced to plaintiff one Tiedman, an insurance adjuster for the defendant company that the plaintiff gave Tiedman a sworn statement showing the cause of the fire and the amount of damage done, and together they selected two builders to estimate the value of the house destroyed, which estimate was given to Tiedman, and an inventory was made of the property which was saved; that Tiedman then left, promising to return in a few days, but failed to do so, and soon thereafter the defendant repudiated the plaintiff's claim.

The real question is, what was the effect of the contract of insurance under this state of facts? Counsel for appellant contend that the plaintiff cannot recover because he had other insurance on the property, and failed to have the consent of the defendant company thereto indorsed on the policy in question, which failure was a violation of that clause in the policy which provides that "the entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void if the insured now has or shall hereafter make and procure, any other contract of insurance, whether valid or not, on property covered, in whole or in part, by this policy." If this clause be literally construed, and the agent cannot waive a compliance therewith by his acts or neglect, and bind the principal, as is insisted, then, indeed, the insured is without a remedy. The agent was authorized to issue policies to parties seeking insurance, to fix rates and premiums, and to countersign, renew, and sign the transfer of policies in Ogden and vicinity. Where such powers are conferred upon an agent of an insurance company, he becomes the general agent of such company within his district, and his acts, performed within the scope of his agency, will be binding upon his principal, and his knowledge and consent will be that of his principal. The company is bound, not only by his acts, but also by whatever may be said or done by him regarding the contract or risk. Through him the company has knowledge of every fact in relation to the insurance or contract, and when he issues additional insurance on the same property for another company he becomes the agent of both companies, and the former company will be conclusively presumed to have knowledge of the additional insurance. If, then, such company fail to avail itself of its right under its contract, to object to such additional insurance, and to declare the policy void, so long as there is no apparent danger of loss, it will be estopped from insisting upon a forfeiture of the policy after loss has occurred, because its consent to other insurance was not indorsed thereon in writing.

These policies are in a printed form, and, as a general thing the insured knows little about their conditions and restrictions but the agent is presumed to know them, and justice and fair dealing will not permit him to lull the insured into a state of security by promises, continue to receive the premiums, and then, when loss occurs, the company deny its liability because the agreement of its agent was not indorsed as required by the insurance contract. In the case at bar the insured requested the agent of the defendant to make the proper indorsement, which he promised to do, but, after having issued the...