Indiana Lumbermen's Mutual Insurance v. Meyers Stave & Manufacturing Co.

Hart, J., (after stating the facts). The main reliance of the insurance companies for a reversal of the judgment is that the verdict is without legal evidence to support it, and in this contention we think counsel for the insurance companies are correct. It is sought to uphold the judgment upon the authority of Michigan Shingle Co. v. State Investment Ins. Co., 94 Mich. 389, 22 L. R. A. 319. In that ease it was held that the knowledge of an insurance agent that a warranty by the insured that ‘ ‘ a continuous clear space of 150 feet shall hereafter be maintained” between the property ■ insured and any woodworking or manufacturing establishment, did not represent the existing state of facts and .that there was no intent to change the.situation and that the insured could not control a clear space for that distance, prevents a. forfeiture of the policy for breach of the warranty, where the agent accepts the premium and issues the policy without taking any steps subsequently ,to rescind it, though knowing of the breach of the warranty, and it appears that, on account of the situation of the property, the manner of its use, and its proximity to water, he considered that the existing space was equivalent to that required. In the first place we do not think that this case is applicable to the facts presented by the record in the case at bar. If the fire had destroyed the staves on the yards of the plaintiff and suit had been-brought under the policies to recover for their loss, the case would be in. point. . In.the Michigan case the record shows that, although the clear space referred, to .was not 150 feet, as provided ..in the policy, yet that, on account of the situation of the .property, the manner of its use and its. proximity, to waterj.it was considered equivalent to that distance.by . insurance men, and the testimony .clearly, showed, that it •. was so-considered by the insurance .company’s agent who '.‘wrote the policy and placed the distance at 150 feet. Under that authority, as applied to the facts in the present case, the insurance companies would be estopped from claiming that the staves stacked in the yards were not covered hy the policies, although there was- not a continuous clear space of 200 feet between the staves stacked in the yards and the working or manufacturing establishment. In the second place, it may be said that the Michigan case could not in any event control the present case. Under the former opinion it was held that the insurance policies did not cover the staves stacked in the dry-kiln, and that opinion is the law of the case. -The case was remanded for a new trial solely on the question of whether there was a waiver by estoppel on the part of the insurance companies, but we fail to see any grounds upon which to base an estoppel upon the part of the insurance companies. Silence is a species of conduct and constitutes an implied representation of the existence of the state of facts in question, and an estoppel based upon it is a species of estoppel by misrepresentation. To constitute an estoppel either by silence or by express representations, there must not only be a duty to speak, but the party relying upon the estoppel must have acted upon the representations or silence of the opposing party and have been misled to his prejudice. “To constitute it (silence) an estoppel, there must be both the-opportunity and the duty to speak; and the action of the person asserting the estoppel, which was induced by it, must be the natural and obvious result of the silence, and the party maintaining silence must be in a situation to know that some one else is relying thereon, and acting, or about to act, as he would not had he spoken and asserted his right.” Rector v. Bd. Imp., 50 Ark. 116; L. R. Cooperage Co. v. Lanier, 83 Ark 548; Baker-McGrew Co. v. Union Seed & Fertilizer Co., 125 Ark. 146, and Wiser v. Lawler, 189 U. S. 260. Putting the case on this point as strongly as the evidence would warrant us, it does not amount to an estoppel under the rule just announced. The agent of the insurance companies visited the plant of the plaintiff after it had insured the staves on its yard and policies of insurance had been issued on the same blank forms as the ones used in the policies sued on. Some of the policies sued on were in force at that time, and others are renewals of those which were in force at that time. The agent of the insurance companies made a sketch or plat of the plant and fixtures with a view to insuring them. While examining the premises, he saw the staves stacked in the dry-kiln, but his attention was not called to the fact that the plaintiff claimed that these staves were covered by the policies sued on. His attention was not even called to the fact that the staves were simply stacked there. For aught that the record discloses, he may have thought that they were stacked there for the purpose of being dried and shipped out in the usual way. He was not called1 upon to speak in the matter at all, and the plaintiff was not in any way misled by his silence in the premises. It is not claimed that he made any representations whatever about it. The agent of the plaintiff in charge of the plant did not ask him anything about the matter at all, and it does not appear that anything occurred which would make it incumbent upon him to speak. It does not appear that the plaintiff could have been misled in any way by his conduct or actions. The result of our views is that the staves burned are not covered by the policies of insurance sued on, and the verdict of the jury is without evidence to support it. It follows that the judgment must be reversed, and the cause of action of the plaintiff will be dismissed.