Citation Numbers: 180 Iowa 192
Judges: Evans, Gaynor, Ladd, Salinger
Filed Date: 3/13/1917
Status: Precedential
Modified Date: 7/24/2022
“Warranty Clause. This policy is issued on the representation and is a warranty by the assured that the Lumber Insurance Company of New York has a policy, or policies, in force on the identical property described herein to the amount of at least $11,000 in form concurrent herewith on*193 the identical subject matter, and in identically the same proportion on each separate part thereof, and at no higher rate of premium. It is hereby further warranted by the assured and is a condition of this insurance that this policy is subject to same clauses, conditions, rates and proportions and will follow the same adjustment and settlement as that made on policy or policies as above issued by the Lumber Insurance Company of New York.”
As so stamped, it covered a space 2y2 inches one way and 4 inches the other, and the name of the “Lumber- Insurance Company of New York,” and the figures “11,000” were in large type. The warranty as stamped on the policy was alongside of a pink paper, describing the property insured, furnished by plaintiff’s assignor, and made a part of the policy by being pasted thereon, the respective amounts of insurance being inserted opposite each description. It appears from the evidence that Helion Dickson, of Vicksburg, Mississippi, was agent of the insured in placing insurance on its property, and, as such, negotiated in behalf of the insured with W. L. Pettibone & Company, of New York City, who issued policies as recording agent in “Surplus Line Insurance;” that is, issued policies for insurance companies in states where the companies were not authorized to do business. The policy in suit was issued by Pettibone & Co., with the warranty clause stamped thereon as stated, and the petition alleges that plaintiff’s assignor did not request or assent thereto, nor even know of the warranty clause until after the fire; that it was attached to the policy by defendant through mistake or fraud. The evidence disclosed that Dickson first applied to Pettibone & Co. in June or July, 1907, and on July 23d, following, Pettibone & Co. tendered insurance in four different companies, one of which was defendant. After some correspondence concerning financial standing of the companies, Dickson, on August 1st, furnished the plaintiff’s description of the prop:
“Practically all the better surplus line offices in New York are full on this risk, embracing all of the companies of Jameson & Frelinghuysen, Starkweather & Shepley, Crum & Forster, Yedder Underwriting Company, J. W. Durbrow, Dickson & Tweecldale, Daniel Woodcock, T. A. Duffey and a number of others. We enclose you herewith forms for both mill plants and Yard No. 1. . You may send me as much as $7,500 on each mill, and $5,000 at the present time on Yard No. 1, rate $2.75. I will need additional insurance later on Yard No. 1 and 2, but just at this time the stock on No. 2 is decreasing. You need not in any wise fear this risk, because it- is only written by the better class of companies, and a loss or unfavorable criticism of the assured has never existed. In order that I may determine my placing for this month on this risk, kindly wire me on receipt hereof how much you cover on each plant and on Yard No. •1, naming the companies. You are not authorized to offer (his outside your own office, as I deal with all brokers direct in the placing of all business in my office.”
Pettibone & Co. telegraphed, August 30th:
“Are covering $6,500 each mill, $5,000 lumber. Send list companies and amounts each risk naming one company and amount as warranty.”
On the same day, a letter was sent, quoting the telegram, naming the respective companies, including defendant, issuing policies, and amount of each, and adding, “'The Standard require a warranty company to be named on
“I have your letter of the 5th inst, enclosing policies for the W. D. Reeves Lumber Company as stated, for which please accept thanks.”
Dickson then was requested to furnish names of companies, with amounts of tlieir policies, which might be used as warranty companies, and also was informed that the defendant company required “a Avarranty to be named on their policy,” and that this Avas not exacted by the other companies. When in NeAV York City, shortly before, he had called on the Lumber Insurance Company and found that he could obtain a $10,000 policy'from it, but that it must be issued by a local agent at Helena, Arkansas. But Pettibone & Company was not arvare of this, and appears to have made use of that company without so informing Dickson, who, though often requested, had furnished the names of none for purposes of Avarranty. True, he named agencies, of which, doubtless, Pettibone & Co. was aware, and possibly some of these might, from a search of their records, have advised the firm as to policies issued on the insured’s property. That firm had informed Dickson, however, that defendant required a warranty company, and he knew that none had been furnished. The circumstance, then, that an English company had required such a clause on a policy previously obtained by him, and that he had never known of such a requirement by an American company, would have tended to fix the above facts in his mind rather than excuse forgetfulness. With the knowledge referred to, this
The secretary of the insured testified that he customarily examined policies when received, to see that they were in standard form, and opened the policies to see that the insured’s form describing the property had been used with
This evidence leaves no escape from the conclusions, then: (1) That plaintiff knew through Dickson that the defendant exacted the insertion in or endorsement on its policy of the warranty clause; (2) that, though repeatedly requested to furnish the names of companies and amounts of their insurance to insert in this clause, Dickson had not done so; (3) that the clause was stamped on the policy, not among conditions usually in fine print, but in a conspicuous place on the face of the contract, where anyone examining could not well overlook it; (4) that Dickson did examine the policy, as did also the secretary of the insured; and (5) that, had either of these agents of plaintff examined the policy, even casually, he must have observed the warranty clause. Surely, then, no fraud was perpetrated in attaching the clause to the policy precisely as plaintiff had been informed the defendant required. Nor was there any mistake made in doing so, for each party to the contract well knew that this would be done. If any wrong were committed, it must have been in inserting in the clause the name of the Lumber Insurance Company as the warranty company', and the amount of the insurance supposed to be carried by it. But defendant’s agent had repeatedly requested the names of companies and the amounts of insurance carried by each, to be made use of in preparing this clause. Plaintiff’s agent, Dickson, was aware that he had omitted to comply with the request. Upon receipt of the policy, he must have known that defendant’s agent had inserted the name of some company or companies and the amount of insurance supposed to be carried, for he had been
We are of opinion that the defendant was without fault, and the retention of the policy is attributable to the negligence of plaintiff’s agents, and, therefore, that the district court rightly declined to reform the policy by striking therefrom the warranty clause. — Affirmed.