State Insurance Co. of Missouri v. Todd

Mr. Justice Gordon delivered the opinion of the court, February 5th 1877. The defence, in the court below, was rested on two grounds: 1. That the plaintiffs had not complied with that condition in the policy which requires a detailed statement of loss to be delivered at the office of the company, within thirty days after the, happening of such loss. 2. That the policy was avoided by non-compliance with the stipulation, therein contained, inquiring a disclosure, at the time of the acceptance of the risk, of any encumbrances which might exist against the insured premises. Neither of these conditions were complied with, nor was there a waiver of either endorsed upon the policy, as required by that instrument; hence, prima facie, the defence, on both points, was made out. ■ But the court was of the opinion that the evidence exhibited by the plaintiffs of a parol waiver was such as warranted the submission thereof to the jury. In this opinion we concur; for, as to the first condition, the testimony warranted the belief that a detailed statement of loss was not required. Immediately after the fire, the defendant, with other interested companies, appointed appraisers to examine the premises and adjust the loss, who went upon the ground, made the requisite examination, and made report to the committee of the companies. The secretary of the defendant company, not being satisfied with this report, had a re-examination made under his own supervision; and the amount of loss arrived at by this second examination was pro[}Qsed to the plaintiffs as a basis of settlement. This they refused; and then it was that they were informed that the companies would take the matter into their own hands, rebuild the factory and replace' the machinery. More than this, the testimony fully justified the conclusion that the delay in furnising the required statement was brought about by the unwarranted interference, by the secretary of the defendant company, with Wallace, whom the plaintiffs had employed to make the necessary examinations and draw up the papers, in advising him to proceed no further in the matter, as the companies had objected to the adjustment, and that it would be better for him to wait before making out the proofs of loss. One of two conclusions results from this testimony: ejther it was intended to waive proofs of loss within the required time, or, if not this, then the object was to occasion such delay as would necessarily cause the proofs of loss to reach the office of the company after the expiration of the thirty days. As the latter conclu [279] sion presents the presumption of gross fraud, it is better to assume the former as the correct one. This evidence certainly makes out a waiver quite as clearly as that found in the case of the Inland Insurance Company v. Stauffer, 9 Casey 397. But in the opinion in that case, delivered by Strong, J., it is held that it is competent for insurers to waive performance of a formal condition introduced into a policy solely for their own benefit. Also, that such waiver need not be express, but may be inferred from the acts of the insurers, evidencing a recognition of their liability, or even from their denial of obligation exclusively for other reasons, citing Heath v. Ins. Co., 1 Cush. 257; Clark v. Ins. Co., 6 Id. 342; Francis v. Ins. Co., 1 Dutch. (N. J.) 78. This same doctrine may be found in Buckley v. Garrett, 11 Wright 204, and in Ins. Co. v. Taylor, 23 P. F. Smith 343. There is, therefore, no lack of authority in support of the ruling of the learned judge of the court below on this point. Having thus disposed of the first ground of defence, let us turn our attention to the second. In the case of The Peoples’ Insurance Co. v. Spencer, 3 P. F. Smith. 353, the policy contained the usual clause that, “ if the risk shall be increased by any means whatever, within the control of the insured, during the continuance of the insurance, and notice thereof be not given to the company, and such increased risk be allowed and endorsed thereon, the policy shall be of no force,” &c. The property underwritten was barley in the “ malt-house and brewery” of the assured; the fact was that the business of distilling was carried on in the same building, which largely increased the risk; it was held, however, that though ordinarily this, without notice to the company, would be fatal to the plaintiffs’ claim, yet if the insurance was made with knowledge, by the agent who negotiated the contract, that distilling was to be carried on in the premises, the condition, as to notice and endorsement, did not apply, and the company had no ground to allege an increase of risk. So in the case of the Eureka Insurance Co. v. Robinson, 6 P. F. Smith 256, where the policy contained a prohibition of other insurance without notice to the company, and where there was a violation thereof of which the company afterwards had knowledge and yet continued to treat the policy as of force, it was held, that it could not, afterwards, be permitted to set up such breach to defeat the contract. “It was not,” says Strong, J., “that knowledge was equivalent to notice, but that knowledge, followed by acts that amounted to a subsequent recognition of the contract as still in-force, dispensed with the necessity of proving notice.” It is- obvious that the above cases govern the one now in hand; for.- observe how this matter is presented. The property (machinery, utensils, &c., in a mill or factory) was first insured by a policy, dated 16th of February 1872, and expiring February 12th 1873. At the-time of this insurance there was a mortgage on the premises in. favor of Todd & Rafferty, the existence of which does not appear [280] to have been communicated to the company or.its agent. This condition of affairs, without more, would be fatal to the claim of the plaintiffs. But subsequently a policy was issued to the same parties upon the same premises, running one year from the- 18th of October 1872, payable, in case of loss, to Todd & Rafferty,' mortgagees. When, therefore, this company, on the 13th of February 1873, renewed the policy now in suit, there was evidence, if not conclusive, yet sufficient to warrant the jury in finding that the defendant had knowledge of the outstanding mortgage. It is urged, however, that the judge, in his charge, spoke of this evidence as though it conclusively proved knowledge and, hence, did not properly submit it to the jury. We do not think such to be the case, for though the judge speaks in a very positive manner of the effect of this testimony, yet he finishes his charge by saying, “ the facts are entirely for you, and the verdict which is to be rendered will be upon your responsibility, not mine.” It is not probable that the jury, under such language as this, did not understand that they were to pass, not upon some of the facts only, but all that were involved in the case. The exception taken to the evidence because of its alleged variance from the declaration, cannot be sustained. A general allegation, such'as that found in the narr., is sufficient to support proof of waiver however it might occur, whether according to the terms of the policy or otherwise, and if the defendant, without demurrer, chose to go to trial upon a declaration, embracing terms technically objectionable or too broad for accurate pleading, it thereby waived the defect and its complaint cannot now be heard. Judgment affirmed.