Farmers' Mutual Insurance v. Taylor ex rel. Grow

The opinion of the court was delivered, May 17th 1873, by

Mercur, J.

A question 'as to the validity of the policy is raised at the threshold of this action. It is contended that it is void by reason of the omission of the assured to give notice in his written application, of another - insurance upon the same property, and to have it endorsed upon the policy. If this notice was not given to, or waived by, the company, such would be the effect. What are the facts ?

Stroud and Brown, who resided at Montrose, were the agents of the company at the time this risk was taken, and had been for some three years prior; they made the contracts of insurance, fixed rates, took applications, and forwarded the same to the company. Stroud had also been an agent for the company for three or four years preceding their joint agency. They were also agents for the Lycoming Insurance Company. There was an existing insurance upon the same property in each, the Farmers’ Mutual and the Lycoming, which was to expire the 23d of October 1868; for what sum does not appear. September 22d 1868, Taylor, by his agent Cafferty, applied to Stroud & Brown for an insurance of $4000 upon the property in the Farmers’ Mutual, to take effect upon the said 23d of October. Stroud & Brown forwarded the application to the secretary of the company, at the same time saying, if the company would not like to carry $4000, they could place $1000 or $1500 in the Lycoming, and would do so. The secretary replied, that he would not take the $4000, but would take the $3000. Thereupon the $4000 was changed by Stroud & Brown to $3000 in the application, and this policy was issued to Taylor for $3000, and another by the Lycoming for $1000, both to take effect upon the 23d of October 1868. The $1000 taken in the Lycoming was not mentioned in the policy, upon which this suit is brought, at the time it was issued. Strictly speaking, this insurance of $1000 was neither prior, nor subsequent, to the one taken by the plaintiff, but was concurrent. It took effect and became operative at the same time. Thus the company was notified by its own agents, that they would, if desired, take $1000 or $1500 in the Lycoming; but the reply of the secretary was in effect requesting it to be $1000, and that the plaintiff would take the residue of the $4000. The risks were both taken in accordance therewith. Subsequently, but more than eight months prior to the loss, “ other insurance in the Lycoming of $1000” was written in the policy by Stroud & Brown, as agents for the company, and they notified the company of it. The defendant then made no allegation of the absence of the previous notice, nor any objection to this addition to the policy. Besides, at the time of this addition, and for several months previous, these agents wrote the policies for the company; and a clause in the policy stipulated that it should not be valid until countersigned by its only authorized agents at Montrose.

. The property insured was of the value of about $8000. So far as it appears, the defendants were entirely satisfied with the acts of their agents. If the company was dissatisfied then was the time to have indicated it. If they desired to repudiate the policy, then was the time to have done so. They could not, after a full knowledge of the facts, retain the money paid for the insurance, and withhold their objections until after the loss, thereby inducing the assured to rely upon the validity of his policy. The evidence then was sufficient to submit to the jury to enable them to find that the company had actual notice of this additional insurance at the time they issued their policy, and that it was entered in writing upon the policy by the agent, and with the knowledge of the company, some eight months prior to the loss.

Next in chronological order wras the assignment of the policy from Taylor to Grow. That there was sufficient consideration between them to support this assignment does not admit of a doubt. It is assailed, however, upon the alleged ground that immediate notice thereof was not given to the secretary, and the same endorsed upon the policy, or otherwise acknowledged by him in writing. What are the facts ? The assignment given in evidence, is written upon the policy, and immediately under the name of the subscribing witnesses thereto is signed “ Stroud & Brown, for secretary.” That was the manner in which they indicated their approval of the assignment. They testified that they were accustomed to make such assignments and report the same to the company, and had done so for three or four years. That the company sent them blanks to fill out to make reports of such assignments as this, executed with their approval. That this assignment was reported by them to the company upon the same day of its approval. This was the 21st of November 1868. The loss was on the 18th of March 1870. The report of this assignment was in addition to the monthly reports, which they made upon the first of each month to the company. We see no error in the third and fourth assignments.

The fifth and ninth assignments of error relate to the notice and proofs of loss. The uncontradicted evidence is, that Grow gave notice to Stroud & Brown, who, by the next mail, informed the company by letter addressed to the secretary. Such notice is sufficient: West Branch Ins. Co. v. Helfenstein, 4 Wright 490. In response to this notice, Walker, who was the general agent and adjuster of the company, came to Montrose, March 31st 1870. He called upon Stroud & Brown, inquired in regard to the fire, and said he came to adjust the loss. Upon the 5th of April he went to the place of the loss, saw Grow, had full conversation with him in regard to the property, insurance and loss. He told Grow that he came as the general agent of the company, to adjust, and to pay the loss, and did not see any reason why it should not be paid. He asked to have the interest deducted, and Grow agreed to deduct six per cent. Walker then left, saying he would go to Owego, see Taylor, and there take the proofs of the loss. A few days thereafter Walker told Stroud that he had gotten the proofs of Taylor, and they were all satisfactory, and they would pay the loss immediately. Stroud informed Grow of all this, and told him not to be uneasy, that the company would settle the loss. Grow relied upon this assurance. No evidence was given to contradict these facts, nor the presumption that the proofs were actually made as stated by the adjuster. If not made, the jury found the company waived them. The evidence justified the finding: Shaw v. Turnpike Co., 2 P. R. 454; Lycoming Ins. Co. v. Schreffler, 6 Wright 188. A particular statement of the loss may be waived by the company, and if there be any evidence from which such a waiver may be inferred it is for the jury: Franklin Fire Insurance Co. v. Updegraff et al., 7 Wright 350; Buckley v. Garrett, 11 Wright 205, and cases there cited. It follows that the court did right in submitting these facts to the jury, and we discover no error in the manner of their so doing.

If an insurance company will confine the business of its agents within the limits of the special written authority given to them, it has a right to ask that it shall not be bound by any act of the agent not warranted thereby. If, however, the company itself ignores that special authority; if, outside and beyond it, it either expressly gives, or encourages an agent, to exercise great additional powers, for several years ; and ratifies and confirms the same, thus holding him out to the world as rightfully exercising all those powers, thereby inducing the public to believe in, and to rely upon, his said enlarged agency, the company cannot, after a loss has occurred, repudiate his action, and fall back upon the written authority for the purpose of avoiding the legal effect of those acts, which he has done by their encouragement in the general scope of the business. The public do not see the written authority, but they do see the acts which the agent does. They know that the company ratifies them. They then have a right to presume such continued acts are within the scope of his authority, and to act upon such presumption. Such a rule is necessary to protect the people, who are obliged to transact business relating to insurance remote from the main offices of insurance companies.

The fact that Walker was the general agent and adjuster of the company, was unquestioned. His acts and declarations connected therewith, in the general scope of his employment, and communicated to Grow, were correctly received in evidence. The non-production of the written proof of loss by the plaintiff below, under the other evidence, was not fatal to his cause of action.

We think the learned judge, upon the whole, submitted the case correctly to the jury.

Judgment affirmed.