Mercer v. Germania Ins.

McCAMANT, J. 1-3. Error is assigned on the reception of evidence that the property destroyed belonged to plaintiff and that her husband, A. G. Mercer, acted as her agent in procuring the insurance. This parol evidence tended to modify the terms of the written contract and the court erred in receiving it unless defendant is estopped from availing itself of the portions of the contract so undertaken to be modified. A policy of insurance is a personal contract: Joyce on Insurance (1 ed.), §23; Drennen v. London Assur. Corp., 20 Fed. 657-659. A wife cannot recover on a policy of insurance written in favor of her husband: Trott v. Woolwich Mut. Fire Ins. Co., 83 Me. 362 (22 Atl. 245); Pelican Ins. Co. v. Smith, 107 Ala. 313, 18 South. 105. The form of a fire insurance policy is statutory in this state: Section 4666, L. O. L. It is held that the conditions of this statutory policy can be waived by the insurer only in the manner therein specified: Oatman v. Bankers’ Fire Relief [413] Assn., 66 Or. 388, 396-398 (133 Pac. 1183, 134 Pac. 1033); Boardman v. Insurance Company of Pennsylvania, 84 Or. 60, 70 (164 Pac. 558). 4. The distinction between waiver and estoppel as applied to an action on a contract of insurance is clearly pointed out by Mr. Chief Justice Moore in Kimball v. Horticultural Fire Relief, 79 Or. 133, 140, 141 (154 Pac. 578). It was not the intention of the legislature when it enacted the statute defining the form of an insurance policy to relieve insurance companies from those estoppels in pais which are essential to fair dealing in the business world. Notwithstanding this legislation an insurer may still estop itself from relying on one or more of the defenses' reserved to it in the standard policy: 1 Clement on Fire Insurance, 409, 410; Welch v. Fire Assn., 120 Wis. 456 (98 N. W. 227); Kimball v. Horticultural Fire Relief, 79 Or. 133, 140, 141 (154 Pac. 578). It is admitted that plaintiff was sole owner of the insured property at the date of the policy and at all times thereafter and it is clearly proved that A. Gr. Mercer acted as her agent in negotiating the insurance. The money used to pay the premium belonged to plaintiff. . 5-7. It appears from the testimony that five or six weeks prior to the fire plaintiff learned for the first time that the policy was taken in the name of A. Gr. Mercer, whom in the meantime she had divorced; she thereupon sent an agent to Mr. W. E. Liston, defendant’s agent who had written the policy; there is no substantial dispute as to the conversation which ensued; Liston advised Mrs. Mercer to secure an assignment of the policy, but told her that the policy then in her possession was all right. There was sufficient testimony to take to the jury the question of whether plaintiff relied on this statement and failed for this reason to secure other [414] insurance. Liston was still agent for the defendant when the above conversation took place. We find here all of the elements of an estoppel within the rule announced in Page v. Smith, 13 Or. 410, 414 (10 Pac. 833), and Oregon v. Portland General Electric Co., 52 Or. 502, 528 (95 Pac. 722, 98 Pac. 160). The policy written in April, 1915, was void; plaintiff was informed it was all right. This statement was made to a woman ignorant of the truth; it was made by an underwriter of large experience who knew the facts. He must have intended that plaintiff should act upon it and there is evidence that she did rely upon it to her injury. Defendant should riot be permitted to escape liability on this policy on the ground that it named A. G. Mercer as the insured. An undisclosed principal may ordinarily sue on a contract made by his agent for his benefit: Kingsley v. Siebrecht, 92 Me. 23 (42 Atl. 249, 69 Am. St. Rep. 486); Powell v. Wade, 109 Ala. 95 (19 South. 500, 55 Am. St. Rep. 915); Warder v. White, 14 Ill. App. 50; Prichard v. Budd, 76 Fed. 710 (22 C. C. A. 504); Morris v. Chesapeake & O. S. S. Co., 125 Fed. 62. An action on an open insurance policy is within this rule: New Orleans Ins. Co. v. Spruance, 18 Ill. App. 576. The evidence was sufficient to justify the jury in holding defendant estopped to insist on those provisions of the policy which take this contract out of the operation of the foregoing principles of law. 8. The facts constituting the estoppel are alleged only in the reply and defendant contends that they are for that reason unavailable to plaintiff. “It has often been held by this court that the plaintiff must prevail, if at all, upon the matters alleged in his complaint, and that he cannot set up one cause of action or suit in the complaint, and recover upon another and different ground of relief in a reply”: Union [415] Street Ry. Co. v. First National Bank, 42 Or. 606, 611 (72 Pac. 586, 73 Pac. 341). In applying the foregoing principle it has been held that in an action on a contract plaintiff must prove a right to prevail under the contract unless he alleges in his complaint a waiver on the part of the defendant of some of the provisions of the contract or an estoppel to assert them as a defense: Hannan v. Greenfield, 36 Or. 97, 102 (58 Pac. 888); Young v. Stickney, 46 Or. 101, 104, 105 (79 Pac. 345). This doctrine has been repeatedly applied in actions on insurance policies: Bruce v. Phoenix Company, 24 Or. 486, 491 (34 Pac. 16); Long Creek Bldg. Assn. v. State Ins. Co., 29 Or. 569, 573 (46 Pac. 366); Cranston v. West Coast Life Ins. Co., 63 Or. 427, 442 (128 Pac. 427); Waller v. City of New York Co., 84 Or. 284, 293 (164 Pac. 959). This question was not called to the attention of the court in Lindstrom v. National Life Ins. Co., 84 Or. 588 (165 Pac. 675), and this case must not be considered as overruling the earlier decisions. The question is concluded in this jurisdiction by the precedents above cited. The contract on which plaintiff sues is an insurance policy in favor of A. Gr. Mercer. It provides that the policy shall be void if the interest of the insured be other than sole and unconditional ownership of the property covered. A. Gr. Mercer did not own this property. It is manifest, therefore, that plaintiff cannot recover on the contract as drawn and the complaint fails to allege an estoppel of the defendant to insist on its rights under the policy. It follows that the court erred in receiving oral evidence which tended to modify the written contract sued on and the judgment must be reversed. If this testimony had been excluded because of the condition of the pleadings it is probable that plaintiff could have [416] amended so as to obviate the objections. We think, therefore, that we should not direct judgment of non-suit, but should remand the cause for further proceedings, and it is so ordered. Reversed and Remanded. Motion to Retax Costs Denied. Mr. Chief Justice McBride, Mr. Justice Moore and Mr. Justice Bean concur.