Palatine Insurance v. Smith McKinnon & Son

Cook, P. J., delivered the opinion of the court. This is a suit instituted in the circuit court of Choctaw county by Smith, McKinnon & Son against the Palatine Insurance Company on an insurance policy issued on the 21st day of October, 1914, and running for one year, to the 21st day of October, 1915, for the sum of fifteen hundred dollars. This policy was issued by M. C. McWhorter & Co., agents of the Palatine Insurance Company at Ackerman, Miss. It contained permission in the face of the policy for the assured to have additional insurance of one thousand dollars. The policy being for fifteen hundred dollars, it permitted the assured to carry insurance ,-up to twenty-five hundred dollars. The policy contained the iron-safe clause and the warranty to take inventories and keep books and produce them after the fire. The defendant insurance company filed a plea of the general issue and notice thereunder, in which it set up the defense [330] that the plaintiffs in the court below (appellees here) had violated the iron-safe clause attached to the policy, and that they had also violated the provisions of the policy contained in lines 11 to 13, inclusive, which provided that: “This entire policy, unless otherwise provided by agreement endorsed hereon or added hereto, shall be void if the insured now has or shall hereafter make or procure, any other contract of insurance, whether valid or not, on the property covered in whole or in part by this-policy.” And defendant further gave notice that the policy sued on for fifteen hundred dollars, covering on appellee’s; stock of goods, was dated the 21st day of October, 1914, and ran for one year, to the 21st day of October, 1915, and that the plaintiff, in violation of the express provisions, set forth in the policy sued on, on the 23d day of January,. 1915, and during .the life of the policy sued on, obtained from the Home Insurance Company of New York its policy No. 46 for the sum of twenty-five hundred dollars, covering on the same stock of goods insured by this appellant, which insurance of twenty-five hundred dollars the appellant’s policy expressly prohibited, whereby the terms of the policy sued on became void. In reply to this notice, the appellees (plaintiffs below) filed a counter notice in which it was alleged that the policy for twenty-five hundred dollars, taken out in the Home Insurance Company of New York as additional insurance was done with the consent of the appellant, and that thereby the appellant had waived the right to object to the same. We will discuss but one point in this case, as a decision upon that point will dispose of this appeal. The contract between the parties provides that: “This entire policy, unless otherwise provided by agreement endorsed hereon or added hereto, shall be void if the insured now has or shall hereafter make or procure any other contract of insurance, whether valid or not, on the property covered in whole or in part by this policy.” [331] It is admitted that the insured procured another contract of insurance upon the property covered by this policy, and that no agreement for such additional insurance was indorsed on the policy. The additional insurance procured amounted to twenty-five hundred dollars, while the policy sued on permitted only one thousand dollars additional insurance. The policy sued on was written by Mr. McWhorter, the agent of the company at Ackerman, and the additional insurance was written by Mr. Gladney, the agent at Weir of the Home Insurance Company of New York. The plaintiff in the trial court seems to have proceeded upon the theory that Mr. Gladney, who wrote the additional insurance, was also the agent of the Palatine Company, defendant below. As a matter of fact, however, Mr. Gladney was not the agent of the defendant company. It appears that Mr. McWhorter, the agent of the defendant, had issued additional policies upon the same stock of goods and mailed same to the insured; that the additional insurance so written by Mr. McWhorter were .contracts of insurance by other companies represented .by Mc-Whorter, and not the defendant company. The .policy so tendered by McWhorter was for three thousand dollars, while the policy in this suit permitted only one thousand dollars additional insurance. . . The insured returned the policy for additional insurance to McWhorter, declining to accept same. ■ The insured testified that when he returned the policy he told Mr. McWhorter that Mr. Gladney lived at Weir, his home town, and he had promised to give him some of his business. The record does not disclose that Mr. McWhorter knew the amount of the' policy written by Mr. Gladney; but it does show, we think, that Mr. McWhorter was advised that the insured intended to secure additional insurance from Gladney, and that McWhorter did not raise any.objection to it — he was silent so far as the record shows. [332] As we understand the contention of appellee, it is about this: That McWhorter, the-agent of the company, had, as the agent of other insurance companies, tendered to appellee an insurance policy for twenty-five hundred dollars, additional insurance; that he was then informed that the -insured was going to give Mr. Gladney some of his business, and said then that he did not blame the insured. From this, appellee insists that appellant, through its agent, waived the additional insurance in excess of the amount stipulated in the policy; that the action of its agent, acting for other underwriters, had offered the excess additional insurance; and that he thereby estopped the appellant from claiming the forfeiture. . It is not claimed that McWhorter knew anything about the policy written by Gladney. It is claimed that he was notified that the insured was going to give Gladney some of his business; and, inasmuch as McWhorter had offered to write the additional insurance, appellant is estopped to claim the forfeiture. Suppose we say .that.McWhorter was informed, after the event, that the policy in question had been written by .Gladney, and that he did not notify the insured that he had forfeited his policy, would his silence work an estoppel against appellant? It seems very doubtful. To sustain the plea of waiver or estoppel in this case, we will have to go much further. McWhorter was not acting for appellant when he tendered the additional insurance but we can see some reason for saying that, had the insured accepted the contract tendered, appellant would be estopped to plead a forfeiture; but it does not appear that McWhorter was advised of the excess additional insurance, but quite the contrary. It seems evident that the insured has forfeited his contract, through ignorance, no doubt; but it would be going far to destroy the obligations of plainly written contracts upon a slender thread of imputation of knowledge and a supposititious [333] duty on the part of one party to a contract to carefully supervise the action of the other party to the contract. Did Mr. McWhorter waive the additional insurance clause by offering the insured a policy of another company for a greater amount than permitted by contract? We think not. Did the policy tendered by McWhorter and refused by the insured create an implied waiver of the limited additional insurance clause? We think not. The evidence does not show that appellant or its agent knew that any insurance had been taken out by appellee, other than the policy sued on, until ater the fire. Lastly, appellee was evidently fully aware that he was bound by his contract, and he asked Mr. Gladney to notify Mr. McWhorter of the policy written by Gladney. Gladney failed to notify McWhorter. Reversed and dismissed.