Phenix Insurance v. Bowdre

Woods, C. J., delivered the opinion of the court. The various defenses presented by the defendant corporation in the court below, on the -grounds of over-valuation of the property destroyed, the vacant and unoccupied condition of the house when burned, the occurrence of the fire through the negligence of the plaintiffs, and the institution of plaintiffs’ suit before resort was had to arbitration have been abandoned, as we are led to believe. If mistaken in this, they must now be abandoned, when we declare them to be without merit. The two other defenses are these, viz: 1. The failure of plain — 632 — tiffs, for more than thirty-six days after the loss occurred, to furnish the defendant with complete proof of loss, including a builder’s estimate as to the value of the property. 2. The inability of the plaintiffs’ to show that they were the owners of the property in absolute fee simple. Let us examine these propositions in order and with some minuteness. 1. The plea going to the matter of the failure to furnish proof of loss complete, including the builders’ estimate, is confessed and sought to be avoided by an allegation of waiver as to the requirement of the policy touching the furnishing of the builder’s estimate by one Hill, the agent of the defendant corporation at Senotabia, and the agent who made the contract for insurance with, and issued to the plaintiffs the policy sued upon. There is a sharp and irreconcilable conflict in the testimony on this point. The evidence of one of the plaintiffs satisfactorily establishes a waiver by the agent, Hill, and the evidence of the agent, Hill, with equal distinctness denies any waiver. This question of fact was submitted to the jury, under fair instructions from the court, and the issue found for plaintiffs. There is left for our determination the sufficiency of the proof to establish the contention that Hill was not a mere local agent, with very narrow powers, but that he was a general agent in a limited territory, clothed with powers ample enough to authorize him to do that particular act which it is alleged he performed on this occasion, viz; waive a part of the required proof of loss. It may be remarked at this point, that the contention of appellant’s counsel that there can be no parol waiver by reason of the provision in the policy that such waiver shall be only by writing endorsed on the policy, is not maintainable. In the N. O. Ins. Association v. Mathews, 65 Miss. 301, this court said that such parol waiver might be made, despite such provision in the policy requiring it to be done in writing, and especially that such stipulation applies only to those conditions and provisions which relate to the formation and continuance of the contract of insurance and are essential to its binding force while it is running, and does not — 633 — apply to conditions which are to be performed after loss has occurred. But was Hill the agent of the defendant corporation in such sense as made him capable of waiving the production of the builder’s estimate in this case? It is distinctly shown by the record that on February 24, 1888, Hill was “appointed by the Phenix Insurance Company, of Brooklyn, New York, as its agent for the transaction of the business of insurance in the state of Mississippi, during the year 1888.” Under this appointment was Hill simply a solicitor of insurance, —a mere runner engaged in hunting up persons desiring or needing insurance ? Or was he the agent of the company in that larger sense that made him stand for and represent the corporation in its dealings with those doing.business with it? All that could be done by any officer of the company in the management of its accustomed business at Senatobia was clearly within the scope of Hill’s authority. Having constituted Hill “ its agent for the transaction of the business of insurance in the state of Mississippi, during the year 1888,” the company had done more than create him a mere local agent with limited powers. It had conferred upon him authority which justified a person dealing with him in regarding him ds its general agent, and as authorized to waive a simple condition required to be performed by the insured after loss. But the controversy would appear to have been put an end to in this state by the opinion of this court in the case of Rivara v. Insurance Co., 62 Miss. 728. Judge Arnold in that case said : “The powers of insurance agents to bind their companies are varied by the character of the .functions they are employed to perform. Their powers may be limited by the companies in this respect, but pai’ties dealing with them, as to matters within the real or apparent scope of their agency, are not affected by such limitations unless they had notice of the same. An insurance agent clothed with the authority to make contracts of insurance or to issue policies, stands in the stead of the company to the insured. 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 — 634 — 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.” We are clearly of opinion, therefore, that Hill was a general agent of defendant, and that he might waive the production of the builder’s estimate. The jury having found the facts for plaintiffs, as already stated by us, and there being proof to support that finding, we conclude that, on this branch of the case, the contention of appellant is untenable. 2. Let us now consider the remaining ground of defense. The fourth condition in the policy of insurance stipulates that “ if the interest of the assured in the property be other than, an absolute fee-simple title ... it must be so represented to the company and so expressed in the written part of this policy.” It appears that no written application for insurance was ever made by the assured, and one of the plaintiffs testified that he thought he represented orally to Hill that plaintiffs were the owners of the property. Leaving out of consideration, however, any effect this proof was legitimately entitled to, is the company’s contention maintainable as an independent proposition in the case ? In support of their position, appellant’s counsel refer us to the outstanding legal title in the surviving executor of Merriweather, and to the supposed imperfection in the execution of the deed from Ward, the attorney-in-fact, to the plaintiffs, and insist that it is thereby shown that there is not an absolute fee-simple title in the appellees. By the insertion of those words in the conditions of its policies, can it be successfully maintained that the insurance company meant that every loss, occurring under its policies, in which the assured should be unable to show a title indefeasible and good against the world — a title free from every defect, real or seeming, and on which not the smallest cloud rested — should be borne by the assured ? To tolerate such an opinion would be equivalent to holding that the company had deliberately set a trap to ensnare the simple-minded and unwary. The contract of indemnity in' multitudes of cases, all over the land, would prove only a delusion and a snare to the victims of premeditated cunning. We cannot believe — 635 — that any honestly-directed and fair-dealing company will deliberately undertake the management of its business on such basis. What is meant, then, by the words absolute fee-simple title in this connection? It can only mean that the assured did not have a limited interest in the property, but that' he claimed and held under a deed of conveyance, or other evidence of title, purporting to invest them with an estate in fee-simple. It can only mean that the assured held under a paper title conferring upon them this sort of estate as contradistinguished from any limited and inferior one. The reason for this distinction is obvious. The insurer will not deal with or take the great risk of indemnifying against loss and damage a mere tenant, leaseholder or other person claiming and having only some qualified interest in the property; but this contract for indemnity will be made only with the person having the title — the beneficial owner — the person having the absolute — i. e., the vested, as opposed to the contingent or conditional — title. It was well said by the court in McGuire v. Ins. Co., 52 Miss. 231, “ Parties applying for insurance are not called on to settle questions of title with very great precision.” We repeat and emphasize the remark here. Applying these principles to the case at bar, we will see that plaintiffs are the sole, undisputed, beneficial owners of the property in question, holding under a conveyance purporting to invest them with an estate in fee-simple. The truth is, so far as this record discloses, plaintiffs are the only persons on earth having any sort of interest in or claim of beneficial ownership to the premises. There is, at the utmost, a mere naked legal title outstanding in one of the three surviving executors of Merriweather, and this executor is the mere trustee of the title for these very plaintiffs and their brothers and sisters — all of said brothers and sisters having conveyed their undivided interests to these plaintiffs. Will any one deny that plaintiffs might not, if thought necessary to protect their title, go into a court of chancery and immediately have the naked legal title divested out of the trustee and invested in themselves? The appellees are the real owners of the premises; they are the — 636 — sole owners asserting title; and they must bear the total loss involved in the destruction of the building, unless we shall hold the company liable. Substantial right and indubitable justice are in the views we have enunciated, and they must be upheld and enforced by an affirmance of the action of the court below. Affirmed. W. JR. Harper, for appellant, Filed a suggestion of error containing an elaborate and carefully prepared review of the argument as to the power of the agent Hill, in which a number of authorities were cited. In this suggestion the following points were made:— 1. The opinion is far-reaching in its effect, and virtually places the business of the appellant at the mercy of local agents scattered throughout the country, whose interests, in the settlement of losses, are always adverse to the Company and with their patrons, the home people. 2. It gives to local agents, whose powers are specified in their commissions, full authority to do everything, even to adjust losses and draw drafts to pay them, and that, too, against express instructions. 3. If the conferring of enumerated powers gives the other and greater power of settling losses, insurance companies will be compelled to do something to protect themselves against such agents, and the result will be great inconvenience to both the companies and the public. 4. Experience has shown the necessity of delegating all matters pertaining to the settlement of losses to adjusters. This is a universal custom recognized by the courts. 5. Hill had no real authority to make the waiver relied upon, for none was expressed in his commission; and no apparent authority was shown by the extrinsic evidence. The rules and regulations referred to in the commission expressly forbade his having anything to do with a loss except report it to the company. 6. An examination of the entire original record in Rivara v. Ins. Co., 62 Miss. 728, shows that the decision in that case is no — 637 — authority for the position that an agent such as Hill could waive proofs. It was an adjuster who made the waiver after the loss. The action of the local agent related only to matters occurring prior to the loss. 7. Conferring authority to fix premiums and countersign and issue policies does not carry with it the power to waive proofs of loss. 121 Mass. 439; 36 Minn. 433; 60 Vt. 682; 63 N. Y. 531; 52 Ib. 270. The text of May on Ins., p. 126, and that of Wood’s Fire Ins., § 419, are supported only by decisions of inferior courts in New York, and these are distinctly overruled by Bush v. Ins. Co., 63 N. Y. 531. Indeed, Wood himself corrects the error carelessly made by him in § 419. See § 420 and cases there cited. In consequence of this suggestion, the court made some changes in the language of the opinion as originally written, the foregoing being the opinion as modified. The decision affirming the judgment of the court below was not disturbed.