Carlock v. Phenix Insurance

Wall, J. This was an action of assumpsit upon a policy of fire insurance. There was a verdict for the defendant, upon which judgment was entered against the plaintiff for costs. The only question affecting liability was whether there was a waiver by the company of the condition forfeiting the policy for the failure to pay the premium note. The policy was dated September 16, 1884, for $2,000. The fire occurred June 13, 1888, causing a loss of $975. The proof of loss was duly furnished. The policy contained this condition: “ In case the assured fails to pay the premium note or order at the time specified, then this policy shall cease to be in force, and remain null and void during the time said note or order remains unpaid after maturity, and no legal action on the part of this company to enforce payment shall be construed as reviving the policy. The payment of the premium note, however, revives the policy and makes it good for the balance of its term. FTo agent or employe of this company, or any other person or persons, have power or authority to waive or alter any of the terms or conditions of this policy, except only the general agent at Chicago, Illinois, and any waiver or alteration by him must be in writing.” The premium was not paid in cash, the following note being given therefor: “$62.50. “ On the first day of October, 1885, for value received, I promise to pay to the Phoenix Insurance Company, of Brooklyn, Flew York (at the First FTational Bank, in Bloomington, Illinois), or order, sixty-two dollars and fifty cents, in payment of premium on policy Wo. 0,156,750 of said company. “If this note is not paid at maturity, said policy shall then cease and determine, and be null and void, and so remain until the same shall be fully paid and received by the company. In case of loss under said policy this note shall immediately become due and payable, and shall be deducted from the amount of said loss. It is understood and agreed that this note is not ¡negotiable. “A. H. Oarlock.” Appellant was notified when the note would mature, and on the 2d of October, li>85, wrote to T. K. Burch, the general agent of the company at Chicago, asking for an extension of three months. To this request Mr. Burch replied that he would extend the time until December 10th, and intimating that if paid by January 1st it would be satisfactory. On the 13th of May, 1886, nothing having been paid, the note was placed in the hands of attorneys at Bloomington for collection, and on that day they sent notice of the fact to the assured, to which he replied by asking for two or three weeks further time, and on the 18tli of May the attorneys wrote him, granting an extension of two weeks. On the 15th of July he paid the attorneys $50, and requested a further extension on the balance, which they granted for two weeks longer. On the 19th of August, after the last extension had expired, they wrote him urging payment of balance, to which he made no reply, and on the 15tli of December they again wrote him and received no reply. On the 26th of December, 1886, assured wrote to Burch, the general agent at Chicago, saying he would settle by January 1st, or soon thereafter. To this Burch made no response. The balance was never paid, and there was no further communication in regard thereto. From the date of the last letter by assured to Burch until the fire there was a lapse of nearly eighteen months. This case was before us at a former term on the appeal of the company from a judgment in favor of the assured. That judgment was reversed because of an instruction which in terms advised the jury that the extensions above stated constituted of themselves a waiver of the condition of forfeiture expressed in the policy and in the note. We then held that the extensions of the time of payment could not be deemed as a matter of law to waive the condition, but were merely circumstances for the consideration of the jury in determining whether a waiver was intended, and that if, from all the circumstances and the course of dealing between the parties, the assured was reasonably justified in believing that the company did not intend to insist upon the condition, and acted upon the belief so induced, then the condition might be considered as waived. It is now urged by the present appellant) the assured, that upon the second trial the court erred in instructing the jury at the instance of the company, and that the tenor and effect of the instructions so given was to advise the jury that the evidence did not show a waiver. The objection thus made applies most strongly to the fourth of the series given for defendant. The instruction is quite lengthy and is not so clear and direct as it might be. Taking one clause alone the inference would be quite plain that the case made by the proof would not, as a matter of law, make a cause of action; and that to recover, the plaintiff must prove in addition that the company had acted in such a way as to induce belief in the mind of assured that the.condition was waived, as though such an inference could not be drawn from the facts in proof. However, when the whole instruction is read together and in connection with the others, we think the jury would understand that the court meant to say merely that the matters in proof did not necessarily involve one conclusion or the other, and that it was for them to say from all the testimony whether the company’s conduct had been such as to justify a reasonable belief in the mind of assured that a waiver was intended. The plaintiff should have asked an instruction making this point more apparent, if he deemed it necessary, or if he found the jury were likely to misapprehend the instructions asked by defendant. We think the instructions presented substantially the rule of law as announced in our former opinion in this particular. •It is objected that the instructions were faulty in stating .the extent of the authority of the attorneys who held the note for collection, and in omitting any reference to the power of the general agent to ratify the action of the attorneys, and in omitting to define the term “ authorized agent,” which was several times employed. We consider it a sufficient answer to this objection that so far as appears by the evidence, the attorneys assumed to do nothing more than pertained to the collection of the note, and that in granting extensions they merely exercised the powers usually possessed by such agents; and that the only other agent of the company whose action was in proof was Burch, who was admitted to he the general agent at Chicago, possessing full authority to waive the condition in question. So far as the attorneys were concerned they certainly had no power to waive the condition, but being the agents' of the company to collect the note their extension would be valid and binding, and then the question would be as to the effect and consequence thereof, and whether such an extension might or should imply a waiver during the time included thereby. In other words, was the action of the company in this respect such as to raise the reasonable belief that a waiver was intended ? There was no technical fault as to this point; and again it may be said that it would have been proper for the plaintiff to ask such an instruction as might have prevented any ¡possible misconception, but it was not done. It is urged that the court erred in refusing to permit certain questions on cross-examination of the witness Clark, as to what was his object in going to the plaintiff’s premises. Clark was the adjuster of the company and testified as to his connection with the plaintiff, the effect of his testimony being mainly to show knowledge in the plaintiff, of the conditions contained in the policy and note with reference to forfeiture, and the questions which were excluded were apparently designed to show that the witness had gone out to see the plaintiff for the purpose of effecting a compromise, and that after the conversation he went back to the office of plaintiff’s brother and offered to compromise. It is now urged that the object of these questions was not to show an effort to compromise, but that Clark treated the policy as still in force. We do not see that Clark’s opinion about it was important. So far as the action of the company in sending him there would throw any light upon the previous intention or purpose or understanding of the company as to the matter of waiver, the plaintiff had the benefit of all that was thereby implied. The company had the right to make an effort to compromise without impairing any of its legal defense, and it was not competent to inquire into whatever it did in that direction. It is urged as error, that the court sustained an objection to the question put to plaintiff by his counsel, whether he received the policy at the same time he gave the note, and it is argued, or rather suggested, that if the question had been allowed the answer would have been that he did not receive the policy until a later date, and that he then “laid it away without his attention being called to any particular fine point provisions in the policy.” In so far as the proof of such fact could benefit him, he had it very fully, as will appear from his cross-examination where he distinctly stated that he never read the fine point of the policy; that he did not understand anon-payment of premium rendered it void; that he never read over the policy but laid it away; that he did read the note; that he thought the policy was in force, etc. We are not able to see that the plaintiff’s case was unduly affected by the rulings of the court in those matters. Upon the main question as to the merits we are disposed to hold that the verdict is right. Had the loss occurred while the payment was suspended by the extensions granted through either the general agent at Chicago or the attorneys who held the note for collection, another and a very different case would be presented. It was not so, however. For nearly a year and six months the matter had remained without a word or act from either side, the last having the definite written promise of the assured (he then being four or five months in default after,the latest extension) to make payment at a time within a week of that date. This after a delay of more than a year from the maturity of the note, during which period repeated efforts to obtain payment had resulted in the collection of only $50, leaving due and unpaid the substantial portion of one-fifth of the principal with a considerable sum for interest. In view of all the facts it would not be a fair construction of the contract and the conduct of the parties to say that a waiver of the forfeiture is a reasonable implication. Whatever the assured might have believed, or been justified in believing, while he was asking and obtaining extensions, it is not to be inferred that his belief continued, nor is it sound to say that it would have been justified when extensions were no longer granted, and no response was made to his last request therefor, coupled with a positive promise of payment by a designated day near at hand. His failure to meet this last engagement might well be construed by the company as a probable abandonment of the matter, and after all that had occurred it was not necessary to say or do anything more to avoid the appearance of a waiver or to repel a possible inference that a waiver was then within its purpose. It would be inequitable to place it in such an attitude. To do so would annul a plain and valid provision of the contract, and enable the assured to secure all the benefit of insurance without a corresponding obligation to pay for it. The case of C. L. Ins. Co. v. Warner, 80 Ill. 410, and other cases relied upon by appellant, so far as we have been able to examine them, can not be regarded as decisive or controlling here, because depending upon wholly different facts. It is impossible within the space properly allowable to undertake the discussion or analysis of those cases or the citations on the other side. Such a task more fitly belongs to the text-writer. We shall be content to apply what we conceive the true principle to the facts of the case at bar, and being satisfied that justice has been done will affirm the judgment. Judgment affirmed.