Allen v. German American Insurance , 123 N.Y. 6 ( 1890 )

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] The fire insurance policy, upon which the plaintiff has sued the defendant, was held, below, to have been forfeited through a violation of the agreement against other insurance in excess of an amount specified. A brief statement of the facts, as disclosed by the record before us, will aid in an understanding of the reasons for our conclusion that the judgment was right.

One, Noble, was a fire insurance broker, resident, during the summer months, at Lake Placid, where was also the hotel property of the plaintiff. Noble applied to plaintiff Allen to insure his hotel and personal property, and he agreed that Noble might procure such insurance; and the amount of $4,630 was placed with this defendant. This figure was the aggregate of sums apportioned upon various items of property. Noble wrote out upon a piece of paper the apportionment of the insurance, and added a clause, giving to the assured certain privileges as to the use of oil, repairs, and for other insurance. This paper-writing was then transmitted to the defendant's office in New York city. The defendant afterward sent to Noble a policy for the amount mentioned, and upon the face of the instrument was attached the paper forwarded by Noble, but with a change in that part of its writing which privileged the assured to make other insurance. The change was in these words, viz., "total amount, including this policy, not to exceed $15,320." The policy contained various terms and conditions, which bound the assured to the performance of, and the abstention from, certain things, and which defined precisely enough the engagement which the company assumed toward him. For the purposes of this case, we need only refer to the following provisions: "The assured, by the acceptance of this policy, hereby warrants * * * that this company shall not be bound, under this policy, by any act of, or statement made to, or by, any agent or other person, which is not mentioned in this policy. * * * This policy shall become void, unless consent in writing is indorsed by the company hereon, in each of the following instances, viz.: * * * if the assured have, or shall hereafter obtain, any other policy or agreement for insurance, whether valid or not, on the property above mentioned, or any part thereof. * * * If any broker, or other person than the assured, have procured this policy, or any renewal thereof, or any indorsement thereon, he shall be deemed the agent of the assured, and not of this company, in any transaction relating to the insurance." In the concluding clause of the instrument, it is provided that "this policy is made and also accepted by the insured upon and under * * * all the foregoing agreements, covenants; limitations and conditions." (The condition against other insurance, contained in the policy, was so far modified by the company as to permit it to the extent, including the amount insured therein, of $15,320,) and the permission was evidenced in writing upon the paper, which had been forwarded from Noble, and which was attached to the face of the policy.

Now this instrument was all there was to operate as a contract between the insurer and the assured. It contained within itself their relative engagements and the whole of them. Its terms charged the plaintiff with notice that the source and extent of the defendant's liability were to be found there and that a failure to keep to certain agreements on his part would exempt the company from any liability to indemnify him for losses. This was the contract proposed by the company, and it was open to the plaintiff to accept it, or to refuse it. He did accept it and became as much bound thereby, as he would have been by any other contract; for there is no distinction to be made between such agreements of insurance and other agreements for the performance of acts, or the payment of money. It forms no exception to the general rule that contracts will be enforced according to their terms, and effect will be given to the expressed intention and the evident understanding of the parties. Every provision, in the absence of fraud and of conditions immoral in the eye of the law, will be presumed to be material to the obligations assumed and when parties enter into contracts, which depend for their validity and enforcement upon the fulfillment of prescribed conditions, they will be held to the exact nature of their engagement. They are presumed to intend the consequences of their acts and it will afford no excuse to them that they mistook the law of the case, or that through inadvertence the conditions and possible consequences were unnoticed. This policy contained conditions of grave import and which closely hedged in the contractual relations of insurer and assured. It strongly behooved the plaintiff to consider its contents, when tendered to him, for there was nothing preceding, or outside of it, which at all affected the insurance company. It was essentially a conditional obligation of the company, and when he accepted it the plaintiff became chargeable with knowledge of its contents and took it according and subject to its terms. There is no reason why any provision should be set aside. In this particular case, it was found that the plaintiff did not know about the limitation as to the other insurance. But that is his fault and not that of the company. It had the right to presume that the plaintiff knew of and assented to every provision in its policy, when he accepted it. Nor is it of any consequence that it may not be possible to show that any prejudice could accrue from insurance in excess of the particular amount. The purpose for inserting a warranty by the assured is wholly immaterial to the question. Parties may insert any provisions they choose in contracts, provided they violate none of the rules of law, and they should all be given their appropriate and intended effect. The warranty inserted here was that the policy should be void, if the assured should thereafter obtain other insurance on the property in excess of a certain stated sum. The assent of the plaintiff to this provision is conclusively presumed from his acceptance of the policy. In this respect, he voluntarily fettered himself and submitted to the defendant's conditional acceptance of the risks proposed. The following authorities may be referred to in connection with the views I have taken of this question: Chase v. H. Ins. Co. (20 N.Y. 52); Jennings v.C.C.M. Ins. Co. (2 Den. 75); Pindar v. R.F. Ins. Co. (47 N.Y. 114); Rohrbach v. G.F. Ins. Co. (62 id. 47).

The able counsel for the appellants, in seeking for grounds to uphold his contention that the defendant is liable upon this policy, notwithstanding the violation of the warranty as to other insurance, makes two points. He says, in the first place, that this policy, under the circumstances, could not be invalidated by other insurance; and, in the second place, that the provision on that subject was waived.

The first ground we do not consider a tenable one. The point is that, as there was a consent in writing to other insurance up to a stated amount, written upon the policy, there could be no breach of the plaintiff's agreement not to obtain other insurance, and that the question became one only of the effect of insurance in excess of the amount specified in the consent. But such was not the effect of the act of the company. In restricting the privilege as to other insurance, it merely qualified the condition upon which the policy would become avoided, in that respect. It was the same thing as though the warranty had read that the policy would become void, if the assured should obtain agreements for insurance upon his property to an amount exceeding $15,320. The company had the right to qualify their consent as to further insurance, and it made no difference in the force of the plaintiff's warranty, whether it was an agreement not to obtain any other insurance at all, or none other after a certain sum was reached. It is not for plaintiff to complain, or for the court to reason upon the thing. The time to object was when the policy was tendered.

Passing that point, we come to the consideration of the question of whether there was any waiver of the provision as to other insurance. The ground taken is that Noble was the defendant's agent, and that he knew of other insurance by plaintiff, exceeding the sum of $15,320, at the time when he delivered the policy, and that, when, two years subsequently, a renewal of the policy was delivered, he consented to, and, in fact, recommended an increase of insurance in excess of the amount of $15,320. The evidence is brief, and, in my opinion, does not justify the assertions of counsel with respect to Noble's acts. The assertions proceed upon his inference, merely, from Noble's testimony; for, explicitly, of course, it conveys no such facts to our mind. But, disregarding the effect of the testimony, there exists the broader ground for our holding that Noble was not the agent of the defendant; further than that he might be deemed such for the purpose of delivering the policy and its renewals to plaintiff, and of receiving the premiums for the defendant. There is nothing in the case to show that Noble was authorized by defendant to act as its agent to effect insurance, or to accept risks for it.

So far as it appears, Noble had no relations whatever with the defendant, other than that he forwarded this paper-writing, which contained statements of the amount of insurance proposed for, and of the privileges desired. He certainly appears to have been nothing more than an insurance broker, soliciting insurance business, and when, upon the acceptance of the risk, he received back a policy of the company for the plaintiff, his sole office was simply to deliver it for the company, and to collect the premium. That is certainly not enough to constitute him an agent for the company, with authority to bind it retroactively, or presently, in transactions relating to the insurance. Circumstances are wholly wanting, from which we may presume the authority of an agent. Then, too, the policy contained the provisions that the company would not be bound by any acts of, or statements of, or to, any agent, or other person, which were not contained in the policy, and, further, that any person other than the assured procuring the policy, or any renewal thereof, should be deemed the agent of the assured, and not of the company. To these conditions the plaintiff's assent is presumed to have been given by his acceptance of the policy, and there is no reason why he should not be bound by them. If Noble had been the agent of the defendant, it was perfectly competent to stipulate by this contract of insurance that anything done by, or known to, the agent should be without effect upon the contract, unless made known in writing to the principal. (Chase v. H. Ins. Co.,20 N.Y. 52-56.)

In Whited v. G.F. Ins. Co. (76 N.Y. 415) it was held, with respect to a like provision as to agency, "that as the insured had contracted that the person, who procured the insurance, should be deemed his agent, he must abide by his agreement." FOLGER, Ch. J., relied upon the cases of Rohrbach v. G.F. Ins.Co. (62 N.Y. 47) and Alexander v. G.F. Ins. Co. (66 N.Y. 464), where such a clause was held forceful.

There is no circumstance of proof in this case, from which we might infer any general agency, or particular authority, in Noble to represent the company. He was a conduit between it and plaintiff for the delivery of the policy and its renewals and the collection of the premiums, and to that extent, it may be said, he was an agent, but no other powers can be predicated upon those acts. Any other view of his powers would be without basis in fact, as it certainly would be an unreasonable disregard of the plain agreement of the parties. This is not a case where the dealings of plaintiff were with one who was a commissioned agent of the defendant, or substantially the agent for the placing of its insurance risks, and it, therefore, differs from the other cases in this court referred to by counsel. A mere insurance broker, as Noble appears to have been, cannot be converted into an agent of the insurance company, without evidence of some action on the part of the company, or of facts, from which a general authority to represent it might be fairly inferred.

The judgment appealed from should be affirmed, with costs.

All concur, except PECKHAM and O'BRIEN, JJ., dissenting, and RUGER, Ch. J., not voting.

Judgment affirmed.