Exchange Mutual Fire Insurance v. Mutual Fire Insurance ( 1915 )

Opinion by

Kephart, J.,

The opinion of the learned judge of the court below has fully demonstrated the futility of this appeal. We will review the salient features of the case without attempting to summarize the testimony. The first assignment of error complains of the trial court permitting the jury to determine the nature of the contract between the parties. The evidence shows that it was made verbally _ between officers of the respective companies and provided for a reinsurance with the distribution of premiums as the consideration. The defendant based its counterclaim at the trial on this oral contract. The contract thus made up and the terms thereof were essentially matters for the jury. The argument that plaintiff’s letter embodies the terms of the contract is without merit; it was a reply to the defendant’s letter concerning Ohio insurance. The stock company rate there mentioned related to insurance in that state. The first assignment of error is overruled.

The second assignment of error objects to the court’s instructions as to “tariff rate.” The contract for reinsurance, the defendant contends, was based on the tariff rate as fixed by the Underwriters’ Association, and insurance was taken by the plaintiff at a lower rate than the rates established by this association. The plaintiff’s position was, that the tariff rate had reference to the rate at which a particular insurance was written and did not refer to any fixed schedule adopted by persons who had no authority to act for it. It was in evidence that some insurance companies have their own schedule of rate. This would be their tariff rate. While the rates established after careful inspection by the board of underwriters, covering ninety-five per cent of the properties insured, and affecting ninety per cent of insurance companies, may be persuasive evidence that it was the rate intended by the parties, it is not conclusive. The plaintiff was not a member of the Underwriters’ Association and without agreement would not be bound by their action. We cannot say as a matter of law that the tariff rate meant the rate established by the Underwriters’ Association, but what it meant in this contract was what the parties understood by it. This was susceptible of oral proof which both sides submitted. There were over 800 policies reinsured, some based on the short term rate and a pro rata rate; in fact when the affidavit of defense was filed, based upon information received from several rate bureaus, it was so inconsistent with the testimony of their experts as to these same rates that it was necessary to amend the affidavit by changing scores of items. There is no fixed legal definition of the words “tariff rates” used in connection with insurance. The second assignment of error is overruled.

As to the third assignment of error, the dealings between the parties required a daily report to be submitted by the plaintiff to the defendant, showing the risks offered, the number of the policy, the date, term, expiration and rate of premium. The defendant was not obliged to accept these risks and if it did accept any it had before it the rate at which the insurance was written. The officer of the defendant who made this contract was a member of the local board of underwriters. It had complete knowledge of each risk offered, from which and upon inquiry it might have been learned if the rate was in accordance with the underwriters’ schedule. The trial court could not escape the duty of submitting to the jury the effect of these daily reports, on the course of business adopted for a number of years, to determine whether, admitting the tariff rate meant the underwriters’ rate, there was not a waiver of this rate. The mere statement of the defendant’s officer, that he did not know the rate used was not the underwriters’ rate, would not conclude the question; considering his knowledge and experience with fire insurance rates, the opportunity afforded to check up the daily reports with their rates and with other circumstances in the case, the jury might well find- this provision of the contract had been waived. The error committed, if any, was in not determining the question of waiver as a matter of law in plaintiff’s favor. Each acceptance of a risk by the defendant was a separate contract based upon the fact that the premium secured offered an attractive risk. This was evidenced by their right to reject policies upon receipt of the daily report and the rejection of some policies because the rates were too low. This assignment of error is overruled.

Judgment affirmed at the cost of the appellant.