Rivara v. Queen's Insurance

Arnold, J., delivered the opinion of the court. There is no just ground to complain of the action of the court in •overruling the objections made to the policies read in evidence in regard to other insurance. But refusing the instructions asked by the appellant, and giving those asked by the appellee, was virtually instructing the jury to find for the latter. On the facts exhibited by the record, the law is not so conclusive on the issues involved as to dispense with the consideration and judgment of a jury upon them. It should have been left to the jury to determine, with other facts, whether the agent who issued the policy sued on had authority to take risks and issue policies without forwarding applications . to his company, and whether he knew that appellant was unable to , read, and in the matter of other insurance, or other respect, he took advantage of appellant’s ignorance or inability to read, and whether [728] the agent on the day after the fire obtained appellant’s policies and told-him that he would make up a statement of his loss and kept the policies twenty days or more, and whether the adjuster of the company had authority to adjust and pay losses, and after investigating the circumstances connected with the fire, told appellant that on account of reports of his being privy to the burning he would not pay the loss or advise its payment, and whether the appellant was misled on these accounts in regard to making proofs of loss, and whether the ageut of the company who issued the policy knew at the time, and before and after it was issued, that coal oil was used for lights and kept for sale on the premises. It is stated in the bill of exceptions that appellant’s testimony tended to show these facts, and the court should have instructed the jury as to the legal effect of such facts if proven. It was error for the court to refuse instructions asked by appellant on these points. There is nothing in the law or nature of insurance which exempts parties connected with it from the obligations of mutual good faith and fair dealing required in other pursuits, and the rights of parties to a contract of insurance are affected by fraud and undue advantage as in other transactions of life. The powers of insurance agents to bind their companies are varied by the character of the functions they are employed to perform. Their powers in this respect may be limited by the companies, but parties dealing with them as to matters within the real or apparent scope of their agency are not affected by such limita-tions unless they had notice of the same. An insurance agent clothed with authority to make contracts of insurance or to issue policies stands in the stead of the company to the assured. His acts and declarations in reference to such business are the acts and declarations of the company. The company is bound, not only by notice to such agent, but by anything said or done by him in relation to the contract or risk, either before or after the contract is made. Wood on Fire Ins. 641, 648, 650, 651 • 1 Phillips on Ins., § 562. If he takes advantage of the ignorance or inability of the assured to read, or misleads him as to the amount of other insurance [729] allowed, or in regard to making proofs of loss, or as to the terms of the policy, or otherwise, the company is not permitted, either in a court of law or equity, to take advantage of such wrong. And in such case the contract being in writing is not an insuperable obstacle in the way of truth and justice. The written contract cannot be contradicted or varied by oral testimony, but, when necessary, such testimony is admissible to show the circumstances under which the policy was issued and to effect an estoppel as to any of its provisions. Ins. Co. v. Wilkinson, 13 Wall. 222; Ins. Co. v. Mahone, 21 Wall. 152; Rowley v. Ins. Co., 36 N. Y. 550. A condition in an insurance policy prohibiting the use or deposit of certain articles may be waived, and is waived, if the agent taking the insurance knew at the time it was taken that the prohibited articles were used or kept, or were to be used or kept, on the premises. Flanders on Fire Ins. 324. In such case thp insurance company cannot claim that it has been wronged or deceived, and to permit it to issue a policy and take the benefits of the contract, knowing at the time that it is not bound thereby, and afterward to avoid liability thereon, upon the ground that something existed or did not exist of which the company or its agent was fully aware at the time the contract was made, would be repugnant to that sense of justice and morality which is and should be inculcated by law. Wood on Fire Ins. 279, 601, 843. If the assured has been guilty of no fraud, the insurer is estopped from setting up the breach of any condition of the policy, when it knew at the time the policy was issued that the condition was inconsistent with the facts, or the breach of any condition after the policy was issued, if it has induced the assured to believe that such breach was waived and has thereby misled him. Flanders on Fire Ins. 42, 43 ; May on Ins., §§ 468, 469 ; Wood on Fire Ins. 672, 673, 832, 833, 837 ; Knickerbocker Ins. Co. v. Pendleton, 112 U. S. 696 ; Ins. Co. v. Spankneble, 52 Ill. 53 ; Reaper Ins. Co. v. Jones, 62 Ill. 458 ; Rowley v. Ins. Co., 36 N. Y. 550 ; Planters’ Ins. Co. v. Lyons et al., 38 Tex. 253 ; Ins. Co. v. Barringer, 73 Ill. 230. Reversed.