Miller v. Eagle Star & British Dominions Insurance

I think that the evidence of a waiver by the Insurance Company of the specific condition in the policy relating to mortgages is exceedingly microscopic, if indeed it deserves to be considered even as a scintilla.

The appellant relies upon an alleged conversation between him and the agent who issued the policy, after the fire, to the effect that the agent stated to him that, "he knew there was a mortgage on it, but he never asked about it, and forgot to put it in" the policy. In answer to a question by his counsel, "He did not say when he learned about the mortgage?" the plaintiff replied, "No sir; he did not say whenhe learned about it."

Taken in connection with the statement made by the plaintiff in his letter of October 10, 1924, to the Company, "I did not know it was necessary to notify the agent of mortgage on my tobacco, therefore I did not notify either Mr. Stevens [the agent], or Mr. Adams [for whom Stevens was working], and did not mention the mortgage to them," and of the lack of opportunity or occasion for Stevens to have known of the existence of the mortgage, I do not think that the plaintiff has carried the burden which was upon him, to show notice to the agent, not to speak of the positive testimony of Stevens that he knew nothing of the mortgage until after the fire. But aside from this, the alleged statement of Stevens, which is indefinite as to the time the information reached him, was made after the fire, and not within the course of his employment as agent, and cannot be considered as evidence of the fact.

It is sufficiently hard lines upon an insurance company to hold it to a waiver of conditions, the basis of which was known to the agent when the policy was issued, notwithstanding such notice was not communicated to the company. The limit is exceeded when the waiver is sought to be established by the weakest kind of a statement, testified to by the insured, after the loss has occurred, when the agent was, as to the particular policy, functus officio.

As stated by the Court in Pearlstine v. Insurance Co., 74 S.C. 246;54 S.E., 372:

"But the rule adopted in this State * * * is that an insurance company cannot avail itself of provisions in the policy that it should be void if certain facts therein mentioned as essential to the insurance should be found not to exist when these facts were known to the agent not to exist when the policy was issued through him, and the existence of such facts and the knowledge of the agent may be proved by parol."

I do not combat this proposition, though appreciating its hardness, but it is far from establishing the proposition involved in this appeal that the fact of the agent's knowledge may be established by the declarations of the agent after thefire, which necessarily terminated his connection with the contract of insurance.

"Declarations of an agent made after the transaction to which his agency related is closed, are not admissible in evidence." Hartman v. Thompson, 104 Md., 389;65 A., 117; 118 Am. St. Rep., 422; 10 Ann. Cas., 92.

"Evidence as to statements by an agent made after the transaction in which he acted was over is not admissible as substantive evidence against his principal, but only to contradict the agent as a witness." Farmers' Bank of Wickliffev. Wickliffe, 131 Ky., 787; 116 S.W. 249.

"In an action for damages from fire set by the alleged agents of defendant, evidence of admissions of the agents as to how the fire started, made in the absence of defendant and after the fire, are not admissible where not part of theres gesta." Ward v. Powell (Tex.Civ.App.),127 S.W., 851.

"Statements made by the representative" of a person insured, after the death of such person, "are not binding on the beneficiaries entitled to the insurance." Gilmore v. Co.,58 Wn., 203; 108 P., 447.

"The declarations in each instance were after the transaction was complete, and not in any sense made during its progress. They were not made dum fervet opus. They were not a part of the res gesta. They were merely hearsay, and hence had no probative value." Miller v. McKenzie,126 Ga. 746; 55 S.E., 952.

In Rookard v. Co., 84 S.C. 190; 65 S.E., 1047; 27 L.R.A. (N.S.), 435; 137 Am. St. Rep., 839, the Court said:

"If an agent commits a tort, while acting within the scope of the agency, the principal is liable, but if he makes declarations or admissions concerning it, so long afterwards that they cannot be admitted as part of the res gesta, the principal is not bound by them."

In Northwestern Union Packet Co. v. Clough, 20 Wall., 528; 22 L.Ed., 406, the syllabus is:

"The conversations of a captain of a steamer with a party injured in getting on his boat, made two days and a half after the accident occurred, in which he attributed the accident to the carelessness of the servants of the boat in putting out the plank, is not evidence to charge the owners of the boat with fault, and this though made while the boat was still on its voyage and before the voyage upon which the injured party had entered was completed."

The opinion states:

"But an act done by an agent cannot be varied, qualified, or explained, either by his declarations, which amount to no more than a mere narrative of a past occurrence, or by an isolated conversation held, or an isolated act done at a later period. The reason is that the agent to do the act is not authorized to narrate what he had done or how he had done it, and his declaration is no part of the ``res gesta.'"

"It is a recognized principle that an agent can bind his principal while acting within the scope of his authority, and that declarations which are a mere narration of past events and do not form part of the res gesta are not binding on the principal." Williams v. Telegraph Co., 138 S.C. 281;136 S.E., 218, citing Petrie v. Railroad Co., 27 S.C. 64; 2 S.E., 837. Garrick v. Railroad Co., 53 S.C. 448;31 S.E., 334; 69 Am. St. Rep., 874. Templeton v. RailroadCo., 117 S.C. 44, 108 S.E., 363.

"Declarations of an agent with respect to an act or transaction, made after the occurrence of the act or the completion of the transaction, are not provable against the principal." 1 R.C.L., 510, citing cases from Alabama, Colorado, Georgia, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Missouri, Montana, Nebraska, New York, Pennsylvania, South Carolina, Washington, and Wisconsin.

"The question of the agent's power to bind his principal by an admission is usually raised when the statement concerns a past fact. An agent, as such, has not power to make admissions, even in respect to a transaction in which he was himself concerned." Tiff. Agency, 283, citing cases.

"Admissions of an agent are admissible only when made in regard to a transaction in the course of his agency pending at the very time the declarations are made, and unless so connected with the transaction cannot bind the principal, though they are explanatory of an act previously done by the agent in the exercise of his agency." Waldeck v. S.S.Co., 2 Cal.App. 167; 83 P., 158.

"The declarations of an agent are inadmissible against his principal, where made after the transaction in which the agent is authorized to act has been concluded." Baldwinv. Bank, 17 Colo. App. 7; 67 P., 179.

"The declarations of an agent as to the matter in his charge, accompanying his acts in relation thereto, are admissible with reference to the then existing state of affairs; but what he may have said at a time when the particular acts complained of were not under consideration is not admissible."Waters v. St. Ry. Co., 101 Ill. App. 265.

"The fact that an agent is fully authorized to consummate a transaction does not authorize the admission of his declarations narrating a past transaction with reference thereto."Cleveland, C., C. I. Ry. Co. v. Closser, 126 Ind., 348;26 N.E., 159; 9 L.R.A., 754; 22 Am. St. Rep., 593.

"The declarations of an agent are not admissible against his principal when they merely relate to a past transaction."Acme Co. v. Madden, 4 Kan. App. 598; 46 P., 319.

"Declarations and statements of an agent, not made in the course of his agency, but of and concerning past transactions in the principal's business, are hearsay and incompetent."Jackson v. Insurance Co., 79 Minn, 43;81 N.W., 545.

The evidence does not disclose the fact that the agent who issued the policy on August 2, 1926, had anything whatever to do with the adjustment of loss after the fire which occurred on August 24th. The plaintiff testified that after that event the company sent an adjuster to attend to that matter. That appears also from the nonwaiver agreement, "executed by the parties," and dated September 4th. The only connection that the agent had with the matter after the fire was to respond to inquiries made by the insured as to when he would get his money.

I think, therefore, that it clearly appears that any statement which the agent may have made as to what occurred at the time of the issuance of the policy was but a "narrative of past events," not within the scope of his agency or within the course of his employment, and was inadmissible.

It will doubtless be insisted that, conceding the inadmissibility of the agent's statement, it was received without objection, and is entitled to be considered as evidence in the case.

The admissibility of the evidence in question is none the less a matter of substantive law than that of parol evidence to alter a written instrument. The principle is well settled that, notwithstanding the reception of such evidence without objection, it is not entitled to be considered. See array of authorities cited in the opinion of the writer in the case ofBuckeye Co. v. Cheraw Co., 142 S.C. at page 275, 140 S.E., 781, and following.

For these reasons, I think that his Honor, Judge Townsend, was entirely right in directing a verdict in favor of the defendant.