Gans v. St. Paul Fire & Marine Insurance

Lyon, J.. It is evident from the foregoing statement of the case, that the learned circuit judge must have held that the knowledge of Latimer & Co., the agents who took the risk and wrote, countersigned and issued the policy in suit, that the insured house, when burned, and before, was unoccupied, was, in contemplation of law, the knowledge of the defendant company — in other words, that notice to the agents was [112] notice to the company, — and hence, that, within the rule of Webster v. Ins. Co., 36 Wis., 67, and N. W. Mutual Life Ins. Co. v. The Germania Ins. Co., 40 id., 446, the requiring of further proofs of loss after the company was chargeable with notice or knowledge that a condition of the policy had been broken (which requirement subjected the plaintiff to expense and delay), is a waiver of the breach, and estops the company to claim a forfeiture of the policy. The conditions of the policy upon which it is claimed that notice to the agents does not estop the company to declare the policy void because the building, when burned, was unoccupied, are the following: “The use of general terms, or anything less than a distinct, specific agreement, clearly expressed and indorsed on this policy, shall not be construed as a waiver of any printed or written condition or restriction therein. * * * It is further understood and made a part of this contract, that the agent of this company has no authority to waive, modify, or strike from this policy any of its printed conditions, nor is his assent to an increase of risk binding upon the company until the same is indorsed in writing on the policy, and the increased premium paid; nor, in case this policy shall become void by reason of the violation of any of the conditions thereof, has the agent power to revive the same; and that a new policy intended to replace any policy so made void shall be of no effect until its actual issue and delivery thereof to the assured, any contract by parol or understanding with the agent to the contrary notwithstanding. * * * And it is a part of this contract that any person other than the assured, who may have procured this insurance to be taken by this company, shall be deemed to be the agent of -the assured named in this policy, and not of this company under any circumstances whatever, or in any transaction relating to this insurance.” Whatever may be the true construction of the stipulation last above quoted, it certainly does not, and in the nature of [113] things cannot, substitute tbe plaintiff as tbe principal of Lat-imer & Oo. in respect to tbe contract of insurance, in tbe place of tbe company. Tbe contract was made, and tbe defendant was undoubtedly bound by it, from tbe iñoment tbe ’ policy was delivered to the plaintiff; and if tbe stipulation substitutes tbe plaintiff for tbe company as tbe principal of Latimer & Oo., then it is competent for a person to make a contract with bis own agent which shall bind a third party who is a stranger to it, and who never agreed to be bound by it. This would be a manifest absurdity. As to tbe clause that a waiver of any condition of tbe policy, to be binding, must be indorsed upon it, it is only necessary to say it is now settled that this requirement may be waived by parol or by acts m pais. See cases above cited. It must be held, therefore, that Latimer & Co. were the general agents of the defendant company ill respect to this policy (Miner v. Ins. Co., 27 Wis., 693), and further, that notice to them that the insured building was vacant was notice to the company, unless there is something in the contract which destroys the effect of such notice to the agent. On the proposition that notice to the agent, where it arises from, or is connected with, the subject matter of bis agency, is constructive notice to the principal, see Story on Agency, §§ 140 and 451, and cases cited. "We find no stipulation in the contract limiting or attempting to limit the legal effect of notice to the agent. The limitations therein contained go only to the acts of the agent. He may not vary, modify, or strike out the printed conditions of the policy, nor assent to an increase of risk, unless the samé-is indorsed on the policy and the increased premium paid. Neither may he revive a policy after forfeiture by violation of any condition thereof, nor make a parol contract in respect thereto which shall be binding on the company, until the forfeited policy is replaced by a new one. But there is no stipulation that notice to the agent of a fact relating to the policy* [114] shall not operate as notice to the company. "What would be the legal effect of such a stipulation, we are not called upon to determine, and do not determine. "When, therefore, the company required the plaintiff to furnish additional proofs of loss, it had constructive notice that the insured building had remained unoccupied in violation of the terms of the policy, and that the policy, theretofore voidable (Webster v. Ins. Co., supra), might then be declared void at its election. Instead of declaring it void, the company took the opposite course, by subjecting the plaintiff to expense and delay. The learned counsel for the defendant argued with much plausibility, that it was not inconsistent with the position that the company elected, to consider the policy void, for it to require the plaintiff to furnish further proofs of loss which should show, under his own hand and oath, that the insured building was vacant when burned: a fact which did not appear by the first proofs. But the company had legal notice of the fact, and we think it was not competent for it to subject the plaintiff to further expense and delay in order to obtain from him cumulative evidence that the building was vacant, without prejudice to its right to declare the policy ■void. It should have made its election in the first instance. It follows that, within the rule of Webster v. The Phœnix Ins. Co. and The N. W. Mut. Life Ins. Co. v. The Germania, Ins Co., supra, the defendant is now estopped to declare the policy void by reason of such breach of one of its conditions. The uncontradicted evidence proved the facts constituting the estoppel, and the defendant admitted on the trial that the loss was in excess of the sum written in the policy. This made a case for the plaintiff, and the jury were properly directed to return a verdict for him for the amount of the risk. A question on the pleadings was argued at the bar, and will now be briefly considered. It is alleged generally in the complaint, that the plaintiff duly performed all of the conditions of the contract of insurance on his part to be performed. The [115] defendant, in its answer, took issue on this allegation, by alleging as a defense to the .action a breach of the stipulation in the contract that the building should be continuously occupied during the term of the policy. The evidence of the agent’s knowledge when the building was burned, and before, that it was vacant, was received under objection. It is claimed that the evidence should have been excluded under the rule of Gill v. Rice, 13 Wis., 549, which is to the effect that, under the code, facts constituting an estoppel must be pleaded before proof of them can properly be received. But in Waddle v. Morrill, 26 Wis., 611, it was held that the rule was not applicable to a case where the party claiming the estoppel has bad no opportunity to plead it. In the present case, the plaintiff could not know until the answer was served, that the defendant would rely upon the breach of the condition that the building should be continuously occupied, to defeat the action, and he could not, under the present practice, interpose a reply setting up the facts constituting the estoppel. Hence, we think the case is identical in principle with that of Waddle v. Morrill, and that the evidence of those facts was properly received. During the trial, several other exceptions were taken on behalf of the defendant to various rulings of the court on objections to the admission of testimony. In the view we have taken of the case, these rulings are of no importance, and require no further notice. By the Court. — The judgment of the circuit court is affirmed.