Young & Co. v. Hartford Fire Ins. Co., 45 Iowa 377 (Iowa)

Seevebs, J.

i. principal undisclosed Insurance’. I. It is claimed by the plaintiff that insurance was effected by one Warner with Cook & Welling, who were insurance agents. Warner met Welling on the street, and made application for insurance; and what was said at the time by Warner and Welling was admitted in evidence, and it tended to show that Welling agreed to issue a policy of insurance and to extend the time for the payment of the premium; that is, he would give

Warner credit until a stated time for the premium. Nothing was said, however, by either party as to' the company with which insurance' should be effected. Warner desired that it should be in a good company, but he left this entirely with Welling, and the latter returned to his office within a short time and wrote up the policy on which this action is brought.

Under .such circumstances, the counsel for the defendant insists that Welling, at the time of the conversation in the street, was not acting as the agent of the defendant, and that, therefore, the latter is not bound by what he then agreed or by what then occurred between him and Warner.

It is clear and undisputed that Welling was not acting for himself, but as the agent for some one. This both parties well understood. By issuing the policy the defendant received the benefits of the negotiations, and by every principle of fairness and common honesty is estopped from repudiating the burdens and obligations assumed during the negotiations. If an agent purchases goods for an úndisclosed principal, the latter, when discovered, can be made liable on the -contract. Stoiy on Agency, Sec. 267.

The mere fact that th'e principal was not disclosed íy no means destro}^ the agency, when it was understood that Welling was not acting as a principal, and by accepting the benefits, or supposed advantages, the defendant ratifies the agency, and what was done by the agent during the negotiations, and is bound thereby.

2. insukahtce: waiver of condition of poi- and agent. II. The policy provides that defendant “ shall not be liable until actual payment of the premium, and it is expressly covenanted by the parties hereto that L . ... ,. ,, no officer, agent or representative of the company shall be held to have waived* any of the terms and conditions- of this policy, unless such waiver shall be indorsed hereon in writing.” And the court instructed the jury as follows:

at any time within the month of April,-and that the policy would take effect from its date, and that Warner relied upon the same, and that both parties treated the same as a valid insurance, then such acts and agreements on the part of the agent would constitute a waiver of the prepayment of the premium, and the fact that the agent failed to indorse such waiver upon the policy will not prevent a recovery in this action.”

Cook & Welling were authorized to issue policies without consultation with any officer or agent of the company. They agreed on the risks and premiums, and were furnished with blank policies properly signed, and when written up and countersigned by them such policies became binding on the company. If, therefore, any officer or agent could waive the conditions in the policy in question, there can be no doubt these agents were vested with such powers.

That the prepayment of the premium may be waived by a general agent, even where the policy recites it shall not be binding until the cash portion of the premium is actually paid in money, we regard ás settled by the authorities. Mississippi Valley Ins. Co. v. Neyland, 9 Bush, 430; Sheldon v. Conn. Mutual Ins. Co., 25 Conn., 207.

It has been held in this State, where the policy provided it should be void in case there was an increase of the risk, unless consent thereto was indorsed in writing on the policy, that such writing was not essential, but that an agent might, by parol, waive the conditions of the policy. Viele v. Germania Ins. Co., 26 Iowa, 9.

The policy clearly implies there may be a waiver of any and all conditions by an agent, but declares that the only evidence of such waiver shall be in writing, indorsed on the policy.

The condition in relation to the payment of the premium seems to forbid a waiver as strongly as the condition that whatever is done in this respect shall be expressed in wu-iting on the policy. Both are undoubtedly inserted at the instance of the defendant; and why may not the writing be waived just as well as the prepayment of the premium? The one is no more sacred or obligatory than the other, and both, it may be said, are equally binding. The failure to pay the premium

does not render the policy absolutely void, but only so at the option of the defendant, and if delivered to the assured a presumption is raised that a short credit was intended. Brohm v. Williamsburgh Ins. Co., 35 N. Y., 131. If the agent, by his acts, leads the insured to defer payment of the premium until it is called for, and a loss occurs before such demand is made, the company is bound. Trustees of Baptist Church v. Brooklyn Ins. Co., 19 N. Y., 305; Bowman v. Agricultural Ins. Co., 59 N. Y., 521.

The policy does not contain any limitation on the power of the agent to waive the conditions, but only prescribes the way or manner the waiver shall be evidenced. It may be said to be a notice to persons doing business with the company, and if brought to the attention of the assured before the policy is delivered, it might be regarded as obligatory on him. But such a notice in a delivered policy cannot have such an effect. Per Comstock, J., in Trustees Baptist Church v. Brooklyn Insurance Co., supra.

In the present case an agent with large discretionary powers writes up and delivers the policy which contains the condition just referred to, and at the same time agrees to extend a short credit for the payment of the premium; under such a state of facts the assured had the right to suppose all conditions precedent to the taking effect of the policy had been waived. If such a policy be held void it would be sanctioning something nearly akin to a fraud; especially is this true in this case, where the assured had no actual notice of the conditions in the policy. That he was bound in a legal sense to know may be conceded.

"When the' policy was delivered the contract was complete, and if the agent by his agreement or conduct misled the assured, and thereby induced him to accept the policy under the belief there had been a waiver of all conditions precédent, and delivered the policy, the defendant is estopped thereby. Westchester Fire Insurance Compamy v. Earle, 33 Mich., 143.

If it be said the assured may in all eases protect himself by seeing that the requisite indorsement is made on the policy,

it may be well replied that tbe company can protect itsqlf by declining to deliver tbe policy until tbe conditions precedent to its taking effect are performed. Or, if it be said tbe policy in question was. delivered by an agent and not by tbe company, it may be replied thereto tbat there was no absolute necessity to vest tbe power to deliver tbe policy'in tbe agent, but having done so tbe defendant should be bound to tbe same extent as if tbe delivery bad been made by tbe president or board of directors of defendant. Certainly this condition is not unalterable, and it must be true tbat tbe same power tbat prescribed it may waive its performance.

Tbe action in Wright v. Hartford Fire Insurance Company, 3*6 Wis., 522, was on a policy precisely like tbe one in tbe present case, and it was there held tbat tbe condition we have been discussing might be waived by tbe acts, conduct and knowledge of tbe agent, though no written consent was indorsed on tbe policy. Tbe views 'herein expressed are fully in accord with Viele v. Germania Insurance Company, supra.* Indeed, if tbat case is' followed to its logical results it is decisive of tbe main question in this case; for it must be obvious there can be no distinction, so far as tbe company is concerned, between the waiver of conditions precedent to tbe taking effect of tbe policy, and those subsequent thereto, except as to tbe former tbe company can at all times protect itself by declining to deliver tbe policy, while in tbe latter such protection cannot be so readily obtained, or tbe power of agents -to waive such conditions so effectually guarded.

III. There was evidence tending to show a delivery of the policy. In fact, if the evidence of Warner, in connection with tbat of Welling, as to tbe entries in tbe books of tbe company, was believed by tbe jury, there is no question as to there being a completed contract of insurance, and also a delivery of tbe policy.

It is not specially urged tbat tbe verdict in this respect is against tbe evidence. Under tbe well established rules in this respect such an objection could not be successfully urged.

Nor are tbe instructions of tbe court as to under what circumstances tbe contract should be deemed complete, or whether

it was essential there should, or must be a delivery of the policy before there could be a valid contract of insurance, objected to. In fact, no such objection could be successfully urged, for the reason that the law applicable to the claimed facts as laid down by the court is undoubtedly correct. The finding of the jury as to the facts is conclusive and cannot be reviewed by us.

IY. Having determined it was competent to show a parol waiver of the conditions of the policy, it necessarily follows that the evidence introduced against the objection of the defendant which tended to so prove was properly admitted, and that the objection urged in this court in reference thereto is not well taken.

8__: proof of loss. Y. By the terms of the policy the loss,'in case one occurred, was not payable “until sixty days after due notice, and satisfactory proofs'of the same.” It is said the proofs were fatally defective. This may be admitted.. The loss occurred in April, 187A; immediately thereafter the defendant was enjoined, and during the continuance of the injunction could not settle or adjust the loss. The parties to that controversy on the 15th day of May, 1871, settled and adjusted the matters between them. This adjustment amounted to a dissolution of the injunction, but no formal entry was made -on the records of the court until August afterwards. The agents, Cook & "Welling, were informed of the settlement on the 16th day of May, and bn the 12th day of June proofs of loss were made out and delivered to Cook & Welling, and the evidence tended to show .such proofs were deemed satisfactory by them. No objection was made to the proofs so furnished until August 21st, 1871, at which time a letter was written the assured, making certain objections thereto. Good faith required that, if the proofs were not satisfactory, notice should be ■ given the assured to that effect, within at least a reasonable time.

Objections of this kind are technical and without substantial merit, and the insurer should make such known with reasonable promptitude to the end that they may be perfected if possible.

The fact there had been no formal entry of the dismissal of the injunction did not, in our opinion, form a sufficient excuse. To all intents and purposes the injunction was dissolved when the settlement was made. The objections to the proofs were made too late, and cannot be urged to defeat this action.

4.-: title misstate-ty' agent. VI. The evidence tended to show.that at the time insurance was applied for defendant’s agents were fully informed of the condition of the title to the real estate, and such agents wrote the policy, and the assured had no actual knowledge of the statements made therein as to the title until after the loss occurred. It is now said the policy did not accurately describe the title of the assured. If this be conceded it would constitute no defense, as was held by this court in Hingston v. Etna Ins. Co., 42 Iowa, 46. It therefore follows there was no “ fraud or attempt at fraud or false swearing” on the part of the assured.

Affirmed

Adams, J., having been of counsel in the case, took no part in the decision.