Union Nat. Bank v. German Ins.

JENKINS, Circuit Judge, after statement of the facts, delivered the opinion of the court. The total amount of insurance upon the property covered by the policy in suit, omitting the item of $100 upon the chicken coop, was §10,500, being an amount of $0,400 of insurance above the amount of the policy in suit. The amount of the insurance covering the farm products in granary was $5,000. The contract between the parties only permitted $5,000 other concurrent insurance on the property insured. It is clear, therefore, that, if the parties are bound by this contract, there was insurance beyond the amount permitted. We put no faith in the contention that the wheat in the granary does not come within the definition of “farm products,” as that term is employed in the policy. We think it idle to assert that wheat is not a farm product. The proposition, in our judgment, does not merit argument to rehut it. Tt: cannot he doubted that: an insurance company may limit the amount of insurance which may he effected upon any property which it insures. It is essential to safety that it should be permitted so to contract; otherwise, the moral risk of over-insurance would be great, and tlie hazard assumed by the company increased beyond that which it had assumed. The limitation of the amount of concurrent insurance was therefore material to (he risk; and, since the amount of concurrent insurance was in excess of the limitation, there can be no recovery if that provision has not been waived. Carpenter v. Insurance Co., 16 Pet. 495; Bard v. Insurance Co., 153 Pa. St. 257, 25 Atl. 1124; Allen v. Insurance Co., 123 N. Y. 6, 25 N. E. 309; Baumgartel v. Insurance Co., 136 N. Y. 547, 32 N. E. 990. Such a contract is also infringed by other insurance on a part only of the property insured. Pitney v. Insurance Co., 65 N. Y. 6; Billington v. Insurance Co., 39 U. C. Q. B. 433; Shannon v. Insurance Co., 2 Ont. App. 396. [476] It is insisted that this provision of the contract has been waivedi because of the fact that O’Rourke, the agent, knew, when this policy was issued, of the other insurance upon the property in excess of the stipulated amount. It is not urged that the defendant company knew of the fact, but that the knowledge of the agent is to be imputed to the defendant. It is said that, in the autumn prior to the issuance of this policy, the agent stated to Mr. Morrison that the taking of the policy in the Phoenix of $2,500 upon the wheat in the granary would not conflict with his carrying $2,500 other insurance on the farm products contained in the granary. There are several reasons why this contention cannot avail: 1. This conversation was prior to the issuance of this policy. We need not now consider whether the issuance of the policy in question was a part of and a mere continuation of the original transaction in November, 1888, or was an independent and a different transaction. In either case the conclusion must be the same. We think it established and elementary law that parol negotiations leading up to a written contract are merged in the contract, and are not to be controlled or affected by parol evidence of the understanding of the parties. Specht v. Howard, 16 Wall. 564; Forsythe v. Kimball, 91 U. S. 291; Brown v. Spofford, 95 U. S. 474; Mowry v. Insurance Co., 96 U. S. 544; Bast v. Bank, 101 U. S. 93; Martin v. Cole, 104 U. S. 30; Thompson v. Insurance Co., Id. 252; Richardson v. Hardwick, 106 U. S. 252, 1 Sup. Ct. 213; Burnes v. Scott, 117 U. S. 582, 585, 6 Sup. Ct. 865; Falk v. Moebs, 127 U. S. 607, 8 Sup. Ct. 1319; De Witt v. Berry, 134 U. S. 306, 10 Sup. Ct. 536; Seitz v. Machine Co., 141 U. S. 518, 12 Sup. Ct. 46; Union Stock-Yards & Transit Co. v. Western Land & Cattle Co., 18 U. S. App. 438, 453, 7 C. C. A. 660, and 59 Fed. 49; Gorrell v. Insurance Co., 24 U. S. App.—, 11 C. C. A. 240, 246, and 63 Fed. 371. 2. The alleged representation of O’Rourke was not the representation of a fact, but of a conclusion of law, and therefore not binding upon the insurer. Clodfelter v. Hulett, 72 Ind. 137; Association v. Kryder, 5 Ind. App. 430, 31 N. E. 851. 3. The agent O’Rourke had acquired the knowledge of the outstanding over-insurance, by virtue of his relation as attorney for Morrison, and in a transaction with which the company was not connected. His knowledge therefore, was not the knowledge of the company, nor is it estopped thereby, nor can a waiver be predicated thereon. Trentor v. Pothen, 46 Minn. 298, 49 N. W. 129; Insurance Co. v. Parsons, 47 Minn. 352, 50 N. W. 240. We are of opinion that the judgment of the court below was correct, and should be affirmed.