Western Assurance Co. v. Phelps

Whitfield, C. J., delivered the opinion of the court. The contentions that the appellant, if the only insurer, would be liable for only three-quarters of the loss, Under the three-quarter clause in the policy ; and in case of valid concurrent insurance consented to, for the same amount appellant insured for, then, for only one-half of three-quarters of the loss, cannot be upheld, since this policy was issued after the adoption of our “valued policy statute” (Laws of 1896, chapter 56), which statute is therefore integrated into, and made part of, the policy, and hence necessaifily writes out of the policy all stipulations therein in conflict with the statute. As said by Judge Dillon in White v. Insurance Co., 4 Dillon, 177, approved in Havens v. Germania Fire Insurance Co., 123 Mo., 403, s.c. 26 L. R. A., 107, s.c. 27 S. W. Rep., 718, “the gen [658] eral rule is that laws in. existence are necessarily referred to in all contracts made under sucb laws, and that no contract can change a law. The provisions of said act of 1896 are substantially identical with similar statutes in Missouri, Tennessee, and elsewhere, and we find an unbroken line of decisions construing these statutes. Since, however, counsel for appellant do not seriously controvert here the propositions of counsel for appellee on the construction of this statute, and especially in view of the accurate and discriminating marshaling of the authorities by the counsel for appellee in their very able brief in this cause, we shall state the conclusions at which we have arrived on this head, with some of the authorities, referring the bar to that brief, which we direct the reporter to print in full, for a full list of the authorities, and the discussion of them. We think it clear, under the act of 1896, supra: 1. That the three-quarter clause is nugatory. An insurance company must determine the valuation of the property. It can then insure such part of that valuation as the parties may agree on, but whatever amount it does insure, receiving premiums on that amount, is the final measure of its liability in case of a total loss, and it cannot reduce this amount by inserting in the policy provisions seeking to impose upon the insured the burden of co-insurer. The amount named in the policy, and on which amount the insured pays premiums, is practically liquidated damages in case of a total loss. There is nothing harsh about this law. It was manifestly enacted to meet and remedy a thoroughly well-known evil, and it is as perfectly a part of the contract, being written into it, as any other stipulation therein. The. statute supervenes all policies issued under it, and writes out of them all stipulations inconsistent with itself. 2. It is also settled that “where several concurrent policies on a building have been written with the consent of the respective companies, each company is liable for the full amount [659] of its policy,” under statutes like tbis. Havens v. Germania Ins. Co., supra. Tbe court well say: “We think there can be no valid reason why the mere fact that several companies assured, each a part of the whole risk, should affect- the operation of the statute. If in order to induce good faith on the part of the insured, and thus give greater security to the insurer, the companies desire to make the owner bear a portion of the risk, this protection can readily be secured by limiting the amount of concurrent insurance. The insurance is written [as here] by the consent of all the companies, and it must be presumed, when each consented to the additional insurance by the others, that in its opinion and estimation the total-insurance was not excessive or disproportionate to the value of the property. The amount written in each policy is expressly assented to by all the other insurers, and they must be held to agree that the aggregate of their several policies is the value of the property. To hold otherwise is to repeal the statute in every case where there is more than one policy on the same property, whereas it was intended to apply to all. When we consider the well-known custom of the different agencies, representing often a number of companies, and distributing the insurance they write equitably among their several members, we can readily see how easily, under their contention, they can render the statute nugatory in the most important risk. We think the statute is obligatory in the concurrent as in the single policy;” citing Oshkosh Gaslight Co. v. Germania Fire Ins. Co., 71 Wis., 454, and Queen Ins. Co. v. Jefferson Ice Co., 64 Texas, 578. The editor of the Am. B. B. & Corp. Rep., vol. 2, p. 578, commenting upon this decision of the supreme court of Missouri, says: “Under such statutes, if several policies are issued upon the same property, the full amount of each may be recovered.” Besides the principle case the following sustain this proposition: Reilly v. Franklin Ins. Co., 43 Wis., 449; Cayan v. Dwelling House Ins. Co., 68 Wis., 515; Oshkosh Gaslight Co. v. Germania Fire Ins. Co., 71 Wis., 454; Barnard v. In [660] surance Go.. 38 Mo. App., 106; Queen Ins. Co. v. Jefferson Ice Co., 64 Texas, 578.” Of course it must be borne in mind that the concurrent insurance in this case was consented to. 3. It is also settled that the statute is not waived by accepting a policy prescribing a different rule for fixing the amount of the loss to be paid, not does it exclude the operation of the statute. Queen Ins. Co. v. Leslie, 47 Ohio St., 409; Dugger v. Merchants’ & Traders’ Ins. Co., 95 Tenn., 245, s.c. 28 L. R. A., 796 (1895); and Thompson v. Citizens’ Ins. Co., 45 Wis., 388. Public policy, declared by the statute, cannot thus be contracted away. The only points-pressed seriously here are that tlie contract was incomplete, and that the agent, Klein, conspired and colluded with Phelps to defraud his company, betraying the company in the interest of appellee. But the proof wholly fails on both propositions. The appellant had full knowledge through Klein, and its general agent, Dexter, at Atlanta, of the additional insurance, and this knowledge bound and estopped it if the consent had never been indorsed on the policy, especially so in view of the fact that the company received a premium with such knowledge and retained it, while defending. Mitchell v. Ins. Co., 72 Miss., 53; Home Ins. Co. v. Gibson, 72 Miss., 58; Ins. Co. v. First National Bank, 73 Miss., 469. Affirmed.