Gnat v. Westchester Fire Insurance Co. of New York

OweN, J. John Gnat, son of Vincent Gnat, who was a locomotive fireman, bearing bis father and mother discussing tbe matter of procuring fire insurance on their dwelling, outbuildings, and contents, concluded to make them a Christmas present of a fire insurance policy on such property. On tbe 17th day of December, 1915, be applied to an insurance agent, Mr. Teal, of Rhinelander, for insurance on tbe property of bis father above mentioned, and a policy was accordingly issued in tbe name of Vincent Gnat which went into effect December 29, 1915. This policy was delivered to John Gnat about January 10th. He carried it in bis pocket until about February 22d, when be presented it to bis father. John Gnat’s testimony as to what occurred when be presented tbe policy to bis father is as follows: “He said to me, 'Why, I have got a policy already,’ and I says, ‘You have!’ He said, ‘Yes,’ and I says, ‘When did you [276] get it?’ He said, ‘About 2d of February.’ I said, ‘Who did you get it from ?’ He said, ‘From Barnes & Weesner.’ Well, I says, ‘Too bad. I Have got this for you for a Christmas present.’ He didn’t know what to do then; so it was getting kind of late and I had been working about fifteen or sixteen hours, was tired and sleepy, and so went to bed. I don’t know what my father did with it then.” The father testified: “I didn’t return that policy that my son gave me because I didn’t know that it would hurt my policy.” It is undisputed that he kept both policies in a private box in his dwelling. On January 21, 1916, the house with its contents covered by the insurance was completely destroyed. The Globe & Rutgers Eire Insurance Company adjusted and paid the loss under its policy. The Westchester Fire Insurance Company of New York refused to make adjustment or settlement under its policy, and this action was brought to recover on the policy issued by it to Vincent Gnat on the 2d day of February, 1916. The policy was a standard form, and, as provided by sec. 1941 — 46, Stats., contained this provision: “This entire policy, unless otherwise provided by agreement indorsed 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 property covered in whole or in part by this policy.” The defense is that this provision of the policy was violated by the procurement of the issuance of the policy by the Globe & Rutgers Fire Insurance Company of New York. Appellant contends he did not procure the issuance of the Globe & Rutgers policy, but that said policy was procured by his son without his consent or authority, and that he did not procure the issuance of subsequent insurance in violation of the provision of the policy above quoted. This might have been the situation up to the time he acquired knowledge of the existence of the Globe & Rutgers policy; but, having accepted the Globe & Rutgers policy, placed it in his private [277] box along with his other policy, and having made adjustment with the Globe & Rutgers Company for its part of the loss, he is not now in a position to deny that the subsequent policy was procured by him. A person cannot retain the avails of an unauthorized contract, made for his benefit by another assuming to act as his agent, and repudiate the responsibilities of such contract, and any attempt so to do, with full knowledge of the facts, constitutes a ratification of the unauthorized act and creates a liability on the part of such person to the same extent as if such contract were originally authorized. McDermott v. Jackson, 97 Wis. 64, 72 N. W. 375; Fraser v. Ætna L. Ins. Co. 114 Wis. 510, 90 N. W. 476; Twentieth Century Co. v. Quilling, 136 Wis. 481, 487, 117 N. W. 1007. It is further contended that the procurement of the insurance by the son was not an agency transaction; that the son procured it on his own responsibility and presented it to his father as a gift. We shall not spend much time in analyzing this transaction with, a view of determining whether it was an agency transaction, a contract made by one for the benefit of another, or a gift. The acceptance and retention of the policy by the father was wholly inconsistent with the contention that it was not regarded by him as a binding contract and valid policy of insurance for his benefit. This is especially true in view of his statement that he did not know that “it would hurt his policy,” and the fact of his making' settlement with the Globe & Rutgers Company adds still greater certainty in the matter of his intentions and purposes in accepting and retaining the Globe & Rutgers policy. But whatever his intentions, it clearly was his duty to repudiate the action of his son in procuring this insurance and to refuse to accept the policy. This he did not do. If the transaction was with an unauthorized agent, he ratified the act; if it was that of a contract made by one for the benefit of another, he adopted it; and if it was a gift made by son to [278] father,-be accepted the gift. So that in any view we take of the nature of the transaction the result is the same. It must be held that plaintiff’s conduct at the time his son presented him with the Globe & Butgers policy amounted to the procuring of further insurance on the property in violation of a condition in the policy sued upon, and that by reason of such breach he cannot recover here. This was the ruling, under similar circumstances, in McKelvy v. German-American Ins. Co. 161 Pa. St. 279, 28 Atl. 1115, and German Ins. Co. v. Emporia M. L. & S. Asso. 9 Kan. App. 803, 59 Pac. 1092, and cases cited in the opinion. We fully appreciate the loss to which plaintiff has unwittingly subjected himself, and regret the consequences to him. The provision of the statute, however, here under consideration is intended to prevent the securing of over-insurance and the consequent incentive to incendiarism. It is founded on sound public policy, and it is better that the plaintiff be compelled to take his loss than that we point the way to the circumvention of this very wholesome statutory provision. By the Court. — Judgment affirmed.