O'Leary & Brother v. Merchants' & Bankers' Mutual Insurance

Rothrook, 0. J. The policy of insurance upon which the action was brought, was issued by the defendant to O’Leary & Plant, on the twenty-fourth day of May, 1888. Afterward Plant assigned his interest in the policy to O’Leary & Bro. This assignment was assented to by the defendant, by the proper indorsement in writing as required by the policy. The property insured consisted of a stoct of farm implements, wagons, buggies and other merchandise. The property was destroyed by fire in December, 1891. After the fire, O’Leary & Bro. assigned their claim against the defendant to the Staver & Abbott Manufacturing Company, one of the creditors of the insured. These transfers have no particular significance, more than that, the action appears to be .maintained for the benefit of the last-named company. The policy provided that the contract of insurance should become void if the assured contracted other insurance on the property, without consent in writing indorsed on the policy by the company. And it further provides that no agent of the company has any authority to waive, modify, or erase any of the printed conditions of the contract. It appears that O’Leary & Bro. afterward insured the property in other companies, to the extent of one thousand five hundred dollars, without complying with the foregoing provision of the contract. The policy was not sent to the general office' of the company 175 for its indorsement consenting to the additional insurance, and no reason is shown in this whole record why the consent of the company was not obtained in the manner provided for in the contract. It is not claimed that the clause in the contract in reference to additional insurance was in any manner concealed, or that the plaintiffs did not know that they contracted that they would not procure additional insurance without obtaining the required indorsement. On the contrary, it would seem, from the fact that the plaintiffs sent in the policy, and procured the consent to the change of ownership by an indorsement in writing, that they were fully advised of the terms of the contract. The plaintiffs claim that they procured the consent by writing a letter to the company, and that they received a letter in reply, from the secretary, consenting to the additional insurance. Neither of these alleged letters, and no copies thereof, were produced on the trial. O’Leary and his brother both testified, as witnesses, to the contents of the alleged letters. The secretary of the company testified that he neither received nor answered such a letter. It is contended in behalf of appellant that, although there maybe a conflict in the evidence as to whether a letter was written and answered, the evidence did not show a compliance with the contract on the part of the plaintiffs. This is the main question in the case, and we think the court should have sustained objections to the evidence, and should have instructed the jury that, under the undisputed facts in the case, the plaintiffs were not entitled to a verdict, because they did not comply with their contract. There is no principle of law which sanctions any such failure to abide by a contract of insurance. It will be observed that this question does not involve a waiver of proofs of loss, or of holding the company liable for the acts of its 176 agents in effecting insurance. And there ought to be no question that an insurance company has the right to so contract as that its liability consequent upon a change in the contract, shall be in writing. These views are supported by the following cases: Zimmerman v. Insurance Co., 77 Iowa, 685 (42 N. W. Rep. 462); Kirkman v. Insurance Co., 90 Iowa, 457 (57 N. W. Rep. 952); Hankins v. Insurance Co. (Wis.) (35 N. W. Rep. 34); Cleaver v. Insurance Co. (Mich.) (32 N. W. Rep. 660); Insurance Co. v. Watson, 23 Mich. 486; Smith v. Insurance Co. (Vt.) (15 Atl. Rep. 353); Gladding v. Insurance Co. (Cal.) (4 Pac. Rep. 764). It is true that the secretary of an insurance company is an agent clothed with greater authority than adjusting or soliciting agents, but it is not an unreasonable requirement that the policy holder should comply with his contract, in a matter of such importance as procuring additional insurance; and the reason of such a rule is exemplified in this case by the fact that when the fire occurred, the. insurance on the property was about equal to its value. As this disposition of the case leads to a reversal, other alleged errors need not be considered. —Reversed. Thursday, December 10, 1896.