Combs v. Hannibal Savings & Insurance

Currier, Judge, delivered the opinion of the court. This action is based on a fire policy for $1,000, issued by the defendants September 24,1866, insuring to the plaintiffs a frame building and some personal property contained therein. A recovery is resisted on the ground of false representations and warranties, in this: that the plaintiffs, in their application, represented their title to the insured property to be an unencumbered fee simple, whereas it was in fact only an encumbered equitable title. The application, which was read in evidence on the trial, contained the following questions and answers, namely: “ Question 10. What is the title ? Answer. Fee simple. “ Question 11. Is your property encumbered, by what and to what amount? Answer. No.” In reply to this matter set up in the answer, the plaintiffs alleged in substance that, on the occasion of making the application, they fully apprised Rust, the defendants’ soliciting agent, of the true state of the title, and that he thereupon filled up the application in his own language, assuring the plaintiffs that it was all right; and that they, believing it to be so, signed the application without being aware of its peculiar phraseology, or that the words “fee simple” and “no encumbrance” wore in it. On the trial testimony was given, under objections made to its [151] competency by the defendants, tending to prove these averments, and tending to show that Rust, as the defendants’ agent, solicited the insurance; and that plaintiffs, before the application was drawn up, submitted to his inspection their title paper, being a bond for a deed, on which a balance of $100 was then unpaid. Under instructions appropriate to the evidence, the jury returned a verdict for the plaintiffs. Rust was the agent of the defendants in soliciting insurance business, but there was no evidence as to the precise scope of his authority, beyond what already appears. Assuming that he acted as the agent of the defendants in filling up the application, and did not therein exceed his authority, it follows that his acts were the acts of the defendants, and that they are bound by what he did as though done by themselves, and that his knowledge is theirs. Having, then, taken the risk under the circumstances stated, knowing the facts, does it lie with them to come in now, after a loss has occurred, and avoid the policy -by disproving the truth of their own statements as contained in the application ? We think not. In our view, the doctrine of estoppel in pais is applicable to the case, and ought to be applied as in the case of Plumb v. Cattaraugus Mutual Insurance Company, 18 N. Y. 392, where it is held that the ‘ ‘ insurer is estopped from showing a breach of warranty by proof of errors material to the risk in the survey and application,” when the survey and application were made by the agent of the insurer, with a full knowledge of the facts. The doctrine of this case is fully sustained by a subsequent decision of the same court in Rowley v. Empire Insurance Company, 36 N. Y. 550. See also Horwitz v. Equitable Insurance Company, 40 Mo. 557, and Eranklin v. the Atlantic Insurance Company, 42 Mo. 456. It is equally to the purpose, perhaps, to regard the statements in the application respecting the plaintiffs’ title as an expression of the opinion of the parties as to the practical result of the plaintiffs’ title bond, and of a mutual understanding a.nd agreement between them to consider and treat the title as a fee simple or its equivalent for the purpose of the insurance contract. This view was taken in Hough v. City Fire Insurance Company, 29 [152] Conn. 10, where the court held that parol testimony conducing to show such an understanding was properly admitted, the testimony thus admitted being the fact that the assured gave the agent true and full information as to his title, and that the agent drew up the application in his own language. To the same effect is the adjudication in Peck v. New London Mutual Insurance Company, 22 Conn. 575. Regarding the agency of Rust, for whom is he to be considered as acting in writing out the application? And is this a question of fact to be passed upon by the jury, or a question of law to be determined by the court upon the facts appearing in the record? In Hough’s case, 29 Conn., the question as to the scope of the agent’s authority was submitted to the jury upon evidence not materially different from that in the present suit. The Supreme Court of Connecticut approved that course. But in the case of Rowley v. The Empire Insurance Company, 36 New York, the New York Court of Appeals'takes the ground that the soliciting agent’s authority to “ take applications for insurance” carried with it the legal implication of authority to fill up the application and do all those things which may be needful in perfecting it; and the court says that it is neither a “harsh nor unreasonable rule in reference to insurance companies to hold that their agents, authorized to take applications for insurance, are acting within the scope of their author^ in everything which they do which may be necessary to complete such applications.” These views commend themselves to our favor as having a satisfactory legal basis, and as being'sustained by just considerations of public policy. The soliciting agents of insurance companies swarm through the country, plying the inexperienced and unwary, who are ignorant of the principles of insurance law and unlearned in the distinctions that are drawn between legal and equitable estates. When the disclosure respecting the Solicited risk is frank and full, and the insurance company accepts it and appropriates the premiums, and a subsequent loss occurs, the indemnity contracted for, so far as the incidents of the original contract are involved, should be fairly inet and realized to the [153] assured. Courts will not look with favor upon ingenious devices to escape just responsibility. In the case under consideration it was a matter o£ no moment to -the material and honest purposes of the insurance contract whether the plaintiffs’ title was legal or equitable, so that it was such a title that the loss would fall on them in case the property was destroyed. / Let the judgment be affirmed. The other judges concur.