Stolle v. Etna Fire and Marine Ins. Co.

with directions to grant to the plaintiffs in each of these cases leave to amend the declarations and to be further proceeded with according to the principles laid down in this opinion, and further according to the principles and rules governing courts of common law.

Judgments reversed, and cases remanded.

A policy of insurance provided that it should be void in case of assignment before loss, without the consent of the company indorsed thereon. The secretary of the company told the insured that he could assign the policy without such consent. Held, that this waived the condition. (See note, p. 597.)

A

CTION on a policy of insurance. The opinion sufficiently states the facts.

Wm. H. Hogeman, for plaintiff in crror.

C. E. Doddridge, W. A. Quarrier and Smith & Knight, for defendants in error.

GREEN, President. [After stating the case and disposing of a preliminary question.] The evidence shows that Captain Moore, of Charleston, procured this policy for Field, and that the premium on it was paid by Field to Moore; that Mr. Reynolds was a clerk of Moore who is an insurance agent. Field proves that "on August 29, whilst Captain Moore was at the White Sulphur Springs, the plaintiff came to him to transfer policy for Field; he filled up the assignment, and Field signed it; at the foot of the assignment there was a memorandum to be signed by the secretary; he saw Field sign transfer; went to Wheeling on business for Burdett; went to Peabody insurance office and met Mr. Rogers; he introduced him to J. R. Miller, secretary of Etna Insurance Company, the same party who signed the policy in evidence; told Miller he had transferred policy for Field to Stolle, and as the form of his VOL. XXVII-75

Stolle v. Etna Fire and Marine Ins. Co.

transfer had to be sent to home office to be approved by secretary, said to him, 'as I am here, and have mentioned it to you, would it be necessary to send policy on to be approved,' and he said no, it would not,' and he left him there. This was, he thinks, September 2, 1873. There was no agent for defendant in Charleston. He was clerk for Captain Moore. The conversation with Miller took place in door of Etna office."

The assignment on the back of the policy referred to by witness, Reynolds, is in these words:

"For value received, I hereby transfer, assign and set over to Gus Stolle and his assigns, all my title and interest in this policy, and all advantages to be derived therefrom.

Dated this 29th day of August, 1873.

JAMES L. FIELD."

And the form of the approval, printed at the foot thereof referred to also by witness, Reynolds, was in these words:

These questions arise from this transfer. The first is will the provision in the policy, that unless an assignment of the policy is approved by the company by an indorsement thereon that the policy shall be void, be enforced by the courts. And secondly, can this approval be waived; and thirdly, if so, do the facts above deposed to amount to a waiver. The courts will enforce such a provision in a policy, provided the assignment prohibited is as in this case before the loss. If, however, the policy attempts to prohibit, under penalty of forfeiture of the policy, the transfer after the loss has occurred, the courts will not enforce it; they regard such prohibition as contrary to the public policy. Minturn v. Insurance Company, 10 Gray, 507; Smith v. Saratoga Insurance Co.,1 Hill, 497. In the first of these cases, it was admitted that upon a proper assignment of a policy, assented to by the insurers, the assignee could sustain an action as upon a new and original promise to indemnify against loss, if any occurs, but it was held that if the policy required the assent of the company to be in writing, it could not be proved by parol. In the second of these cases, the policy had a clause in it whereby the policy was declared void, if assigned without the consent of the company in writing, and the court held, unless waived

Stolle v. Etna Fire and Marine Ins. Co.

by the company, this stipulation of the policy would be enforced. It seemed to be assumed in this case that this provision in the policy might be waived. In the case of the Pennsylvania Insurance Co. v. Bowman, 44 Penn. St. 89, the policy provided "that the policy should be void upon assignment thereof, unless notice is given at the office of the company, and the same be approved and indorsed thereon by the secretary or other authorized officer of the company." This policy was assigned absolutely by written assignment. Sometime afterward, the president of the company, on a separate piece of paper, approved an assignment of the policy to these parties as collateral security for certain purposes. This paper was attached to the policy by a wafer and is supposed to have referred to the absolute assignment aforesaid, though the date of the assignment approved is not given in the approval. After the loss of the property, a letter was written by the president of the company, though not signed officially, to these assignees, asking certain proposals in reference to the property, looking to an adjustment of the loss with them. The court held this approval of the president though not indorsed on the policy was sufficient, and add: "But whether it were or not, it is clear that the defendants, by their conduct, and by this letter, waived a more strict compliance with the condition, which they had a right to do, as they could have waived entirely a provision intended only for their protection." I concur in the conclusion, that this provision may be waived by the conduct of the defendant, or, to speak more properly, the defendant, by his own conduct, may be estopped from insisting on this provision. The remaining question is, did the defendant's conduct in the case before us estop it from insisting on the fact that the approval of this assignment was not indorsed on the policy. The general question as to what conduct of the defendant will amount to a waiver or an estoppel of the company is discussed in Muhleman v. Nat. Ins. Co., 6 W. Va. 508, and the conclusion reached: "The act relied on as a waiver must be such as to estop a party from insisting on performance of the contract or forfeiture of the condition. There must be some act or declaration of the defendant or of the defendant's agent, to the plaintiff, which so affected the conduct of the latter to his injury as that it would be unjust now to permit the defendant to set up or have the benefit of the clause of the policy in question. It is not necessary to an equitable estoppel that the party should intend willfully to mislead; but whatever may be the

Stolle v. Etna Fire and Marine Ins. Co.

intent, if he makes such a representation as a sensible man would take to be true, and believe that it was meant he should act upon it, and he does so act, the party making the representation is precluded from contesting its truth." To sustain which position the court refers to Bigelow on Estoppel, 524, 553; Ripley v. Elna Ins. Co., 30 N. Y. 136, 164; Continental Nat. Bank v. National Bank of Comm., 50 id. 575; Herman's Law of Estoppel, 343, § 331. In the case under consideration there is this provision in the policy: "This insurance may be terminated at any time at the request of the assured, in which case the company shall retain only the customary short rates for the time the policy has been in force." Under this provision the assured had a right to terminate his policy at any time, and in such case had a right to demand the return of the premium paid, except that the company could retain the customary short rates for the time the policy had been in force. The company had a right to decline to consent to the assignment of the policy, but if they had done so, the assured would, of course, have exercised his right to terminate the policy and demand the return of the premium paid for a year in advance, less the customary short rates for the time the policy had been in force. Of this right, however, the assured was deprived by being induced to omit to exercise this right by the declaration of the secretary, that it was not necessary to have his indorsement of the approval of the company of the assignment on the back of the policy. This left assured in the condition of having the policy terminated without the refunding of any portion of the premium paid in. Such a result, if permitted, would operate an obvious injury to the assured, and upon the principles above laid down it would be unjust to permit the defendant to have the benefit of this clause of the policy, he having, to the injury of the plaintiff, declared that it was unnecessary to comply with it on his part. When it is remembered that the blank form of approval printed on the back of the policy showed that the secretary of the company was the proper officer of the company to approve an assignment, the plaintiff cannot be considered as having acted otherwise than prudently when he, by his agent, called upon this secretary to know whether it was necessary to send the policy on for his approval of this assignment. And when he replied that it was not necessary, a sensible man might well take this to be so and believe that it was meant he should act upon it. I am, therefore, of opinion that

Stolle v. Etna Fire and Marine Ins. Co.

this conduct of the secretary of the company estops them from relying on this breach of this condition of the policy. It is said, however, that the secretary did not make this statement to the plaintiff, and that the statement was made to a third party and that there is no evidence that it was ever communicated to the plaintiff. But the evidence shows that in making this assignment in a binding and effectual manner this party who is called a third person, to whom this statement was made, was really the plaintiff's agent. And, therefore, it must be held that the plaintiff not only knew of this statement but that his conduct was influenced by it. If, then, the first count in this declaration had been a count properly drawn and based on the policy, the evidence would under such a count have justified the finding of the court. But this count we have seen is fatally defective and the demurrer to it should have been sustained. The judgment of the court cannot, therefore, be permitted to stand unless the evidence would have justified the finding of the court under the second count, which is a common count of insimul computassent.

[This question being decided in the affirmative.]

Judgment affirmed.

NOTE BY THE REPORTER.- As to waiver of condition against over-insurance, see Elliott v. Lycoming Co. Mut. Ins. Co. (66 Pern. St. 22), 5 Am. Rep. 323. As to waiver of condition for payment of premium, see Sims v. State Ins. Co. (47 Mo. 54), 4 Am. Rep. 311; Bodine v. Exchange Fire Ins. Co. (51 N. Y. 117), 10 Am. Rep. 566; Young v. Hartford Fire Ins. Co. (45 Iowa, 377), 24 Am. Rep. 784; Dayton Ins. Co. v. Kelly (24 Ohio St. 345), 15 Am. Rep. 612; Joliffe v. Madison Mut. Ins. Co. (39 Wis. 111), 20 Am. Rep. 35. As to waiver of condition against change of title, see Pratt v. N. Y. Cent. Ins. Co. (55 N. Y. 505), 14 Am. Rep. 304. As to waiver of condition against other insurance, see Couch v. City Fire Ins. Co. (38 Conn. 181), 9 Am. Rep. 375; Webster v. Phoenix Ins. Co. (36 Wis. 67), 17 Am. Rep. 479; Security Ins. Co. v. Fay (22 Mich. 467), 7 Am. Rep. 670; Allemannia Fire Ins. Co. v. Hurd (37 Mich. 11), 26 Am. Rep. 491; Hayward v. Nat. Ins. Co. (52 Mo. 181), 14 Am. Rep. 400. As to waiver of condition for limitation, see Little v. Phonix Ins. Co. (123 Mass. 380), 25 Am. Rep. 96.

In this connection we note a recent case in the New York Court of Appeals, of which the following is an abstract: Defendant, by policy issued in 1869, insured the plaintiff's interest as owner in his dwelling-house. The policy was signed by the president and secretary, and "O. J. Hannon, Agent." It was renewed in 1870, and again in 1871, the renewal certificates being signed in the same way, and containing a clause, "not valid unless countersigned by the duly authorized agent of the company at Oswego, New York, and the last renewal was "countersigned at Oswego, the 11th of October, 1870, by O. J. Hannon, Agent." In November, 1871, plaintiff sold and conveyed the premises, and in 1872 applied for a renewal of the policy, telling Hannon the fact of the sale and showing him a mortgage on the premises which he had taken in payment, and Hannon said he would “make it all right," and gave him another like renewal certificate. Hannon received the premiums on the several renewals and forwarded them to the company. He did all the business of the company at Oswego except to settle losses. The policy contained provisions that it should be void if the premises should be sold, or if the interest of the assured was not truly stated, and that nothing less than a clear specific agreement, clearly expressed and indorsed on the policy,