Baile v. St. Joseph Fire & Marine Insurance

Sherwood, C. J. Proceeding in the nature of a bill in equity for specific performance of a verbal contract to insure the goods and merchandise of the plaintiffs. I. The validity of' the contract is the first point demanding attention. The charter of the defendant company is that furnished by the general law. Chap. 67, Gen. St. 1865, p. 353. The concluding words of section 1 of that chapter require that the “conditions of all policies issued by such company, shall be written or printed on the face — 381 — thereof;” and section 8 of the same chapter provides that “ all policies and contracts of insurance and instruments of guaranty, made by said company, shall be subscribed by the president, or president pro tempore, and attested by the secretary.” Similar language to that just quoted was passed upon by this court in Henning v. U. S. Ins. Co., 47 Mo. 425, and it was held that with such a charter and by-laws, the company could make no original and binding oral contract of insurance. In that ease, however, section 6 of chapter 62, General Statutes 1865, was overlooked. That section, which has been on the statute book for over thirty-five years, (Stat. 1845, p. 232, § 8,) provides that: “Parol con-[ tracts maybe binding on aggregate corporations, if made! by an agent, duly authorized by a corporate vote, or under ; the general regulations of the corporation, and contracts > may be implied on the part of such corporations, from | their corporate acts, or those of an agent whose powers are of a general character.” Passing upon the effect of this section it was held in the circuit court of the United States for the eastern district of Missouri, in an action between the forementioned parties, that construed in the light of the general law, the charter of the insurance company did not disable it from making a binding contract of insurance without writing. Henning v. U. S. Ins. Co., 2 Dillon C. C. 26. This view Is certainly the better one, even where there is no such general provision as that above quoted, making oral contracts of aggregate corporations valid. It must now be considered as the well settled doctrine by the nearly universal concurrence of the authorities that oral agreements of insurance are enforceable, although the charter of the company contains similar provisions to those contained in chapter 67, supra. The principle underlying these decisions is this : That the right to make contracts of insurance, like any other right of contracting, exists as at common law, unless prohibited by statute; that the contract of insurance having its origin in mercantile law and — 382 — usage, the distinction which denies the power to enter into such a contract, except in particular modes and forms, is without foundation and repugnant to, and inconsistent with, that general capacity of contracting which the common law concedes to every person ordinarily competent to enter into binding engagements; that the provisions of the charter of a company that they shall have the right to-, make contracts of insurance by the signature of a president, etc., are regarded by the courts as merely enabling and not restrictive of the general power to effect contracts in any other mode not unlawful, dictated by convenience ; and that “the distinction between a contract to insure or to issue a policy of insurance, and the policy itself, is obvious and constantly recognized by the courts.” May on Ins., §§ 14, 22, 23, 128; Kelly v. Commonwealth Ins. Co., 10 Bosw. 82; Sanborn v. Fireman’s Ins. Co., 16 Gray 448; Trustees v. Brooklyn Fire Ins. Co., 19 N. Y. 305; Relief Fire Ins. Co. v. Shaw, 94 U. S. 574; New England, etc., v. Robinson, 25 Ind. 536; 56 Mo. 371; Henning v. Ins. Co., supra. In view, however, of the broad statutory provisions heretofore cited, relating to the power of aggregate corporations to contract orally, all difficulty as to the power to make, in the present circumstances, an oral contract of insurance, vanishes. Besides that, section 8, supra, requiring the signature of the president, etc., uses no prohibitory words; relates not to agreements to insure, but only to policies when completed and ready for official signature. It is unnecessary to the proper determination of this case that the one already cited from our own reports, and greatly relied on by defendant, be overruled; but it is not unworthy of remark, that the utterances in that case were, for the most part, almost, if not altogether, obiter, since therein it is distinctly asserted that the contract in that instance was “ nothing but a naked verbal agreement * * sued upon. This is denied, and there is no proof of it.” So that that case could have been very, briefly disposed of, as having no evidential foundation requiring — 383 — either judicial discussion or determination. Be that as it may, the doctrine announced in that case does not dominate this one, for the reason that that case was a suit at law on an alleged oral and completed agreement; this a proceeding in equity to .compel that to be done which already upon sufficient consideration had been agreed should be done. And the case under discussion expressly recognizes the principle announced in Commercial Ins. Co.v. Union Mutual Ins. Co., 19 How. 319, as well as in numerous other cases cited by plaintiffs, that equity will specifically enforce “ agreements to make insurance.” II. Conceding, then, as we must, from the authorities and statutory provisions above noted, the power of the defendant company to make such an agreement to insure the goods and merchandise of plaintiffs as can be enforced in equity, was a contract possessing such necessary constituent elements as equity will recognize and enforce made in the case at bar ? We have no doubt on this score and for these reasons: The evidence discloses a contract for a policy of insurance negotiated for, between plaintiffs and defendant’s local agent; the reception of and receipt for the required premium; the subject matter insured, the amount of insurance and the duration of the policy. The only element of the contract of insurance left incomplete by the evidence is the risk insured against, but this is supplied by reasonable intendment and necessary implication arising from the nature of the business engaged in by the defendant company, fire insurance on land, and marine insurance elsewhere, and by the circumstances and situation of the property insured. And it is competent to infer the nature of the risk insured against. Thus it has been held that when the hazard is fire alone, and the subject an unfinished vessel never afloat for a voyage, and not a subject for marine insurance, a contract to insure must be regarded — 384 — as a fire insurance. Eureka Ins. Co. v. Robinson, 56 Pa. St. 256. The evidence further discloses the forwarding of the premium thus received to the home office, the notification of the company by its local agent of the occurrence of the fire, the immediate coming to Warrensburg of Rice, the secretary of defendant and its special adjuster of losses, and his taking of the depositions of plaintiffs as to the cause of the fire, the amount of the goods burned and the aggregate sum of insurance, and the retention of the premium. If from these facts a contract to issue a policy cannot be implied on the part of the defendant, or even be regarded as well established by the evidence, it would be hard to conceive of a case furnishing sufficient data, to bind with obligatory force a recalcitrant corporation. And it would be intolerable that such corporation should ratify the acts of its local agent in manner as aforesaid, receive the consideration for issuing a policy, retain that consideration, and yet refuse to do that act for which that consideration was given. III. We have already seen that a valid oral contract to insure having been made, equity will specifically enforce such initial, such preliminary contract. This is done where a loss has occurred, not by actually requiring that a policy of insurance be issued, but by a decree for payment of the loss as if a policy had issued. This method of affording relief, of administering remedial justice, proceeds upon the ground of avoiding circuity of action; (May on Ins., § 565, and cases cited,) and, doubtless, upon the further ground that equity, once possessed of a cause, will, before releasing its grasp on the res, avoid a multiplicity of suits by doing full, adequate and complete justice between the parties, by entering that judgment to which the party will be ultimately entitled. Real Estate Savings Inst. v. Collonious, 63 Mo. 290. — 385 — IV. The first special defense of defendant’s answer cannot prevail. There being no policy of insurance issued, the indorsing of subsequent insurance on a non-issued policy can scarcely be regarded as within the domain of possibility. The law never requires impossibilities. Defendant failing and refusing to issue a policy according to contract, cannot visit upon plaintiffs the prejudicial results arising solely out of its own non-performance. Eureka Ins. Co. v. Robinson, 56 Pa. St. 256. Plaintiffs not being furnished with a policy of insurance containing the conditions of its issuance, it would be most unreasonable to require at their hands a compliance with those unknown conditions. No policy having been issued, nothing more, in justice to defendant, was requisite than that it be notified of subsequent insurance. Eureka Ins. Co. v. Robinson, 56 Pa. St. 256. This was done, as shown by the testimony, the next day after the insurance was effected, by informing the local agent of such subsequent insurance in the Planters. V. The agent, when notified, according to the testimony of one witness, said “ that was all right,” and according to the testimony of another witness, made no objection; so that, even had there been a policy of insurance actually issued, this conduct of the agent would have rendered the notice of subsequent insurance equivalent, in the circumstances, to an indorsement on tne policy of the fact contained in such notice. The decided tendency of modern adjudication is in this direction, and the company is held estopped from insisting on a forfeiture of the policy, because the stipulation referred to has not been literally complied with. May on Ins., § 370; Hayward v. Ins. Co., 52 Mo. 181; Pelkington v. Ins. Co., 55 Mo. 172. VI. The second special defense is as unmaintainable as the — 386 — first. The testimony shows very clearly that though technically incorrect, the answer given that there was no mortgage on the insured property .was actually true; and the evidence, when carefully examined, shows no conflict on this point. That evidence discloses that the deed of trust was given for a special purpose, and only for that purpose, i. e., to remain as a security for the note given by Ridenour to Oongdon, for the latter’s interest in the goods, until communication was had with Ohio, the indorsement of Glandner on the note obtained, and Oongdon should be satisfied with the solvency of the indorser. This communication with Ohio took place; Crittenden & Cockrell, the attorneys for Oongdon, employed by him for that purpose, opened a correspondence with persons in that state, ascertained, as required, that Glandner was solvent and responsible; had the note indorsed by Glandner, returned it to their client about the 1st day of September, 1873, who retained it in his possession without objection, though he did not enter satisfaction of the deed of trust. In these circumstances, tbe deed must be held as satisfied, and as no longer a subsisting incumbrance at the time plaintiffs applied for insurance. Congdon’s conduct on this occasion after what had passed, must be held tantamount to an admission that he was satisfied with Glandner as indorser, and that tbe deed of trust had served its purpose. 1 Gif. Ev., § 197. VII. If the note of Ridenour had been paid prior to the last named period, no one would doubt the competency of parol evidence to show that fact. If competent in that case, then competent also in this. It is always competent to show by verbal evidence that a written agreement is “totally discharged.” 1 Greenlf. Ev., § 302; May on Ins., § 290; Hawkes v. Ins. Co., 11 Wis. 188. Again, the consideration of the deed of trust, as expressed on its face, is to secure the note, but the law is well settled in this State, — 387 — that you may, hy verbal testimony, explain or contradict the consideration clause in a deed; such clause only possessing the force and character of a receipt. Fontaine v. Boatman’s Sav. Inst., 57 Mo. 561; Hollocher v. Hollocher, 62 Mo. 267. No importance is to be attached to the date of the deed of trust being subsequent to the note. This is fully explained by the evidence as well as the fact that the deed of trust, through mistake of the scrivener, was drawn to extend over a longer period of time than that intended by the parties. VIII. The failure of plaintiffs to furnish formal proofs of loss cannot avail defendant, and for these reasons: It would be most unreasonable that plaintiffs be held bound 'to comply with the condition off a policy to notify the company forthwith of any loss, when that company, by its own failure to comply with its contract, and issue the promised policy, prevented the plaintiffs from knowing that condition. If the company would insist upon lack of complete performance in this particular, this can only be done when they make complete performance possible, or at least interpose no obstacle in the way of such performance. 56 Pa. St., supra. The company cannot be allowed to say to plaintiffs: “ If we had issued you a policy it would have contained a certain condition, and as you have not complied with that condition which the policy we would have issued would have contained, therefore, you cannot recover.” This is certainly a most remarkable defense to interpose. IX. Besides, the defendant must be held as having waived the proof's being furnished by refusing to issue a policy, and denying all responsibility. Tayloe v. Ins. Co., 9 How. 309, and cases cited; McComas v. Ins. Co., 56 Mo. 573; May on Ins., §§ 468, 469; Franklin F. Ins. Co. v. Coates, 14 Md. — 388 — 285. It must be conceded that - the formal proofs of loss offered in evidence by plaintiffs were only evidence of the fact that they were furnished to defendant and no more. Newmark v. Ins. Co., 30 Mo. 160. But there was other evidence in the cause showing the extent of plaintiff's’ loss. X. A caudal point, not presented in oral-argument, nor in defendant’s printed brief, is found appended thereto, to the effect that this "appeal should he dismissed because the record is not properly certified. It is too late after both parties have treated the transcript as a record, after errors have been assigned and joined thereon, to raise this point now. We reverse the judgment and remand the cause, Norton and Ray, JJ., concur ; Hough and Henry, JJ., dissent.