Levy v. Peabody Ins. Co.

should operate as a waiver of any condition; and also that any person other than the assured, who might have procured the insurance to be taken, should be deemed the agent of the assured and not of the company, under any circumstances whatever, and in any transaction relating to the insurance. Held, that the conditions were waived. Fish v. Liv., London & Globe Ins. Co., 44 N. Y. 538; Shearman v. Niagara Fire Ins. Co., 46 id. 526; Bidwell v. North West. Ins. Co., 24 id. 302; Rohrbach v. Germania Fire Ins. Co. (62 N. Y. 47), 20 Am. Rep. 451, and Alexander v. Same, 66 N. Y. 464, distinguished and limited. There must be mutuality in the contract. If Hannon is to be deemed agent of the assured he cannot also be agent of the insurer, or if he is, the insurer must be bound by his acts and words, when he acts as one having authority from the insurer. Pro hac vice he then rightfully puts off his agency for the insured and becomes agent for the insurer. Sprague v. Holland Purchase Ins. Co., 69 N. Y. 128. Defendant, by treating the former certificates, countersigned by Hannon, as valid, asserted that he was its duly authorized agent, and is estopped from denying his agency as to the third certificate. Whited v. Germania Fire Ins. Co., decided March 18, 1879.

The adjustment of a loss by an insurer, with full knowledge of all the facts, operates as a waiver of conditions in the policy against other insurance, and requiring the certificate of a notary as a preliminary to payment. (See note, p. 601.)

A

CTION on a policy of fire insurance.

The policy provided that it should be void in case of other insurance on the same property, without the consent of the defendant written on the policy. The opinion states the other facts.

W. H. Hogeman, for plaintiff in error.

Smith & Knight and Mollohan & Fontaine, for defendant in

error.

GREEN, President. [After describing the policy and disposing of a minor question.] The plaintiff, in his declaration, alleged that "he had duly kept and performed all the requirements and conditions contained in said policy, and so continued from thence up and till the time of said loss." He also alleges, "that he did also produce and deliver to the defendant, at its office in the city of Wheeling, a certificate under the hand and seal of D. C. Gallaher, a notary public, nearest the place of said fire, and who was not concerned

Levy v. Peabody Ins. Co.

in any loss occasioned by said fire, as a creditor or otherwise, and not related to the plaintiff; that he, the said D. C. Gallaher, had examined the circumstances attending the loss sustained by plaintiff by said fire, and knew the character and circumstances of the plaintiff, and he verily believed that the plaintiff, by misfortune, and without fraud or evil practice, had sustained loss and damage on the property insured to the amount of $1,428.41." The matters set forth above are, by the policy, required to be done by the plaintiff, but no penalty is attached to his failure to do this by the terms of the policy, except that the loss is not payable till these things have been done. The defendant demurred to the declaration, but has presented to this court no grounds on which his demurrer is based. And I see no defect in the declaration. The demurrer was properly overruled. The defendant then plead non-assumpsit and issue was joined; he also tendered a special plea in which he set forth the above provisions of the policy, requiring the consent of the company to be indorsed on the policy before any other insurance of the property could be made under the penalty of the policy being forfeited, and alleged that, "without the knowledge or consent of the defendant, the plaintiff did, after the issuing of the aforesaid contract or policy, and before the fire in the declaration alleged, make and obtain other insurances on the property in said contract or policy described, to wit: $500 in the Nail City Fire Insurance Company, of Wheeling; $700 in the Sunberry Fire Insurance Company, of Sunberry, Pennsylvania, and $500 in the Franklin Insurance Company, of Wheeling." To the filing of which plea the plaintiff objected, and the court overruled his objection and permitted this plea to be filed; the plaintiff then offered three several special replications to the defendant's special plea. The first of these special replications alleged, substantially, that after the defendant had full knowledge of all the facts in his said plea alleged, and after said fire and before the institution of this suit, defendant and said three other insurance companies, jointly settled and adjusted said loss of plaintiff at $1,428.41, and then and there apportioned said loss among said companies as follows: to the defendant, $457.09 3-100; to the Nail City Fire Insurance Company, of Wheeling, $285.68 5-100; to the Sunberry Fire Insurance Company, $399.95 12-100; and to the Franklin Insurance Company, $285.68 5-100. And the said defendant and said other companies agreed among themselves and with the plain

Levy v. Peabody Ins. Co.

tiff, that they would pay to the said plaintiff their portions of said loss as aforesaid, which the plaintiff agreed to receive and to discharge each of them from further liability, which agreement has been carried out as to all these companies, except the defendant, and it prays judgment, whether the defendant ought, contrary to said adjustment and agreement, to be admitted to say that said policy of insurance is forfeited and void. The second special replication set forth the same facts and adds the further allegation, that upon the happening of the loss, the three other companies became and were liable for the whole amount of said loss, independent and exclusive of the defendant's liability therefor. The third special replication set out the facts stated in the first, varying the statement only, by saying, that the plaintiff disputed the correctness of said adjustment and claimed that the true amount of said loss was largely in excess of $1,428.41, and the said defendant and said three other companies, in consideration that the defendant agreed to abandon and waive his said claim to additional loss, and to accept and receive the amount so adjusted and apportioned, in full discharge of their, and each of their, liabilities on account of said loss, agreed then and there among themselves and with the plaintiff, that they would respectively pay to the plaintiff the portions of said loss, so respectively apportioned to them aforesaid, which agreement has been carried out and completed by all of said companies, except the defendant. These replications the court permitted to be filed, and the plaintiff took his bill of exceptions and then rejoined generally and issues were joined. On the trial of the issues, the jury assessed the plaintiff's damages at $511.02, subject to the opinion of the court on the demurrer to the evidence which was filed by the defendant. The court held that the evidence was sufficient in law to maintain the issue joined on the part of the plaintiff, and it rendered a judgment in his favor for $511.02, the damages assessed by the jury, with interest on same from January 2, 1876, the day the verdict was rendered, and costs. writ of error was allowed to this judgment.

[Omitting a question of pleading.]

It remains, then, to inquire whether the acts referred to amount to a waiver on the part of the defendant of his right to rely on the provisions of the policy set up in his plea. The case of Eagan v. Etna Fire and Marine Insurance Company of Wheeling, 10 W. Va. 583, shows that a mere adjustment, if made with a knowledge of

Levy v. Peabody Ins. Co.

all the facts, amounts to a waiver of all defenses based on provisions in the policy. And such an adjustment is alleged in each of these special replications, and in addition thereto facts are alleged in each of them which make it still clearer that the defendant is estopped, if these facts are true, from setting up any such defense as his special plea proposes. One of these special replications alleges that by this adjustment the plaintiff released three other companies from the payment of the whole of his loss, which they would have been bound to do if the defendant had insisted on his right to avoid the policy he had issued. Another of these pleas alleged that the defendant had as a consideration for this adjustment surrendered à considerable portion of his claim for loss and damages not only against the defendant but also against three other companies. Acts of the defendant much more equivocal have been held a waiver of this provision in a policy. See Webster v. The Phoenix Insurance Company, 36 Wis. 56; 17 Am. Rep. 479; Hayward, assignee, v. National Insurance Company, 52 Mo. 181; 14 Am. Rep. 400.

[Omitting the consideration of the evidence.]

This evidence, it seems to me, on a demurrer to evidence by the defendant, establishes an adjustment, but it is unnecessary in this case to establish an adjustment. The policy itself is sued upon, and it was only necessary to prove a waiver of the provision of the policy, declaring a forfeiture on account of further insurance, without written consent of defendant, and of the provision requiring the notary's certificate to be returned with the proof of loss. The proof of loss was submitted to the secretary of the defendant, and indeed made out under his direction, a part of it being in his handwriting when returned. He did not object because the notary's certificate was not with it, but actually adjusted the loss to his own satisfaction. The paper made out under his direction, headed "Adjustment of Losses," stating on its face that the defendant pays to the plaintiff $457.09 3-25; and he expresses regret that he could do no better for plaintiff. The law as stated above would unquestionably make this a waiver of the only matters which stood in the way of the plaintiff's recovery.

[Omitting the consideration of evidence.]

Judgment affirmed.

NOTE BY THE REPORTER. See Stolle v. Etna Fire and Marine Ins. Co., ante, p. 598, and note, ante, p. 597. To the same effect as to adjustment, Illinois Fire Ins. Co. v.

VOL. XXVII — 76

Levy v. Peabody Ins. Co.

Archdeacon (82 Ill. 236), 25 Am. Rep. 313, and Little v. Phonix Ins. Co. (123 Mass. 380), 25 Am. Rep. 96, and note, 107.

In Mason v. Citizens' Fire, Marine and Life Ins. Co., 10 W. Va. 572, the secretary of the company wrote the following letter to the insured:

"DEAR SIR: Mr. John Bishop, on his return to this city, handed us your proof of loss by fire which occurred on the 19th of January last in your place, showing the same to be $1099.45; the policy No. 3047 of this company under which you had $1,000 insurance, provides for other insurance by you-$4.000 additional taken elsewhereleaving this company liable for one-fifth your loss, which amounts to $219.69. You will let us know if you desire the cash payment, and what discount you will allow this company to pay at this time, etc,, etc." Held, a waiver of a condition that the company should not be liable until the premium was paid, and of the condition requiring proofs of loss in a specified manner, and the certificate of a notary to certain facts in connection with the loss. The court say:

"It is well settled that if premium is not required to be paid in cash, but is payable at a future time, and there is a provision in the policy rendering it void, or terminating it if the premium is not paid promptly at maturity of premium note, or if the premium be recited on the face of the policy to have been paid in cash, but instead thereof, a note be taken which on its face declares the policy will become void if the note is not paid promptly at maturity, or if the policy on its face declare in such cases, that if any obligation for premium be not paid promptly, the policy in any such case shall terminate or be void, such provision of the policy will be enforced unless waived and the mere delivery of the policy is not a waiver by the company of such provision. Muhleman v. National Insurance Company, 6 W. Va. 508; Bradley v. Potomac Fire Insurance Company, 32 Md. 108; 3 Am. Rep. 121; Pitt, adm'x, v. Berkshire Life Insurance Company, 100 Mass. 500; Baker v. Union Life Insurance Company, 43 N. Y. 283; Bowditch Mutual Fire Insurance Company v. Winslow et al., 3 Gray, 432."

"The weight of authority, as well as sound reason, leads to the conclusion that the delivery of the policy to the assured is necessarily a waiver of such a provision in the policy. Thus, in Wood v. Poughkeepsie Mutual Insurance Company, 32 N. Y. 619, it was decided that the condition of a policy of insurance that the instrument should not be binding until actual payment of the premium is waived by the company delivering the policy without exacting prepayment. But not if it is merely left for examination with the assured, if the party is required, if he concludes to accept the policy, to prepay the premium. The assured, if the policy is delivered to him, has a right to hold the company to its contract of insurance, despite this provision in the policy, but the company would have a right to sue for the premium despite the acknowledgment of the receipt. In Bochen v. Williamsburgh Insurance Company, 35 N. Y. 131, the court decided that the delivery of a policy without requiring such pre-payment in the policy. This position, too, is strongly countenanced by the Supreme Court of the United States in Miller v. Life Ins. Co., 12 Wall. 288. The delivery of the policy to the assured is an act utterly inconsistent with a provision in it that it shall have no effect, the premium not having been paid, and being so, upon principle it must be held to be a waiver of such provision. Of course, if the policy was handed to the assured merely to inspect, this does not amount in law to a delivery, but if once delivered as a contract, a provision in it that it shall be void till the cash payment is made, is by the mere delivery waived. Even if the premium had not been cashed, but by the terms of the policy to be paid at a future time with a condition that the policy should be void if such future payments were not promptly made, such provision could be waived by the company, and an adjustment of the liability would be a sufficient waiver. See case of Eagan v. Ætna Fire and Marine Insurance Company of Wheeling, 10 W. Va. 583, and so would the receipt of the premium subsequently. Bouton v. American Mutual Life Insurance Company, 25 Conn. 542; Wing v. Harvey, 27 Eng. Law & Eq. 140; Buckbee v. U. S. Ins. Trust Company, 18 Barb. 541."

In Eagan v. Etna Fire and Marine Ins. Co., 10 W. Va. 583, the same force was given to an adjustment as a waiver of non-payment of premiums, and it was further held to operate as a waiver of a condition avoiding the policy if the building stands on leased ground and that fact is not represented and expressed in the policy, the company being cognizant of the fact when the adjustment is made. The court say: