Rockford Insurance v. Winfield

Martin, C. J. 1. Policy not binding, when. I. When the policy was written J. O. Johnston was the agent of the Insurance Company, the Cashier of the Bank of Chanute and the President of the First National Bank of Erie. The assured was indebted to these Banks in a sum exceeding the value of all the grain and seeds in store, and these were substantially covered by the warehouse receipts held by the Banks. This condition of affairs was not disclosed to the Insurance Company by its agent. So far as it related to the grain and seeds, the policy was issued for the use and benefit of these Banks. It is an elementary doctrine, subject to certain exceptions not applicable here, that an agent cannot in the same transaction represent two [582] principals whose interests are conflicting or antagonistic. The law has too much regard for the infirmities of human nature to sanction such a double relation. When an insurance company employs an agent to solicit business for it in a particular locality it has a right to expect that he will act only in its interest in that business. He would not be authorized to write a policy upon his own property, for as to this he would not be the agent of the company, and it would not be bound thereby unless, being fully informed of the facts, the principal officers of the company should accept the risk. Story, Agency, §§ 10, 210; May, Ins. § 125. In New York Central Ins. Co. v. National Protection Ins. Co., 14 N. Y. 85, 91, it is said : “It is not necessary for a party seeking to avoid a contract on this ground to show that an improper advantage has been gained over him. It is at his option to repudiate or to affirm the contract irrespective of any proof of actual fraud.” The purpose of the doctrine is to remove the temptation to fraud and imposition on the part of those occupying fiduciary relations by divesting them of the legal power to make such fraud or imposition effective. In this case the Insurance Company declined the risk, but the assured was not advised of the declination until after the’ loss, and this may have been the result of the negligence of the Company in misdirecting the letter. Fiad Johnston been the agent of the Company in fact and in law as to this transaction, the result of the delay in notification should have been visited upon the Company; but, as to this insurance, Johnston did not sustain that relation, and the Company, not accepting but declining the risk, was not bound by the terms of the policy. See, further, Bentley v. Columbia Ins. Co., 19 Barb. 595; Spare v. Home Mut. Ins. Co., 19 Fed. Rep. 14; Zim [583] mermann v. Divelling House Ins. Co., ( Mich.) 68 N. W. Rep. 215. 2. No waiver of proof II. It was the duty of the assured under the policy to make proofs of her loss substantially as prescribed therein, and this she failed to do, although she had ample time after the receipt of the letter of date February 6, and before the expiration of the 30 days from the loss. Indeed, she brought suit within less time, although the policy provided that the loss should be payable 60 days after the proofs should be received at the office of the Company. The letter distinctly informed the assured that the statement presented was not sufficient and could not be accepted, and that the special agent waived none of the conditions of the policy but would expect a strict compliance with the printed conditions thereof ; yet the assured did nothing further toward a compliance with the terms of the policy and the demands of the Insurance Company. The reasons assigned by the assured for noncompliance are deemed insufficient by a majority of this Court, although the evidence tends to show, and for the purpose of sustaining the judgment should be held to prove, that the special agent declined to consider the loss unless the claim for the Prange implements and machinery should be detached or eliminated, and a compliance with the requirements specially pressed in the letter was impracticable if not entirely impossible. The writer is of opinion that the claim of the assured ought not to be defeated upon this ground. The special agents called to investigate and adjust the loss within little more than a week after the fire, and before they had any right to expect formal proofs' of loss. They then required an itemized statement which was made during the investiga [584] tion. It was not verified and there was no certificate of a local magistrate. If the assured had been able to give the information requested in the letter as to purchases and shipments for 1891 and up to the time of the fire, yet this would have been of no value without knowing the quantities and the kinds of grain and seeds in the warehouse at the beginning of 1891. The ultimate fact was the amount of each kind of grain and seeds in store at the time of the fire, and not when or how it was placed there; and partial information as to the facts requested would tend to obscure rather than to disclose the truth. In respect to the verification and the certification the statement of loss was informal; but as the special agents had investigated the matter on the ground during the greater part of a week, and in writing the letter made no special objection for these reasons, but, on the contrary, required information which the assured could not give, and as they refused to consider the loss unless the claim for the greater part of it was abandoned, the writer is of opinion that formal proofs should be held to be waived and that the rights of the assured ought not to be sacrificed upon a technical insistence devoid of substantial merit. The judgment must be reversed, and the cause remanded for a new trial. Johnston, J., and Allen, J., concurring.