Liverpool & London & Globe Insurance v. Sheffy

Woods, J.,

delivered the opinion of the court.

Two questions are presented by this appeal, viz.: (1) Bid the insured forfeit his right to a recovery on the policy sued on, by reason of his procurement of subsequent and additional insurance without having the consent of the appellant indorsed in writing on'its prior policy? (2) Has the insured forfeited his right to a recovery on the policy issued by appellant, by a violation of what is known as the iron safe clause contained in the contract of insurance?

We shall not enter upon any discussion of the disputed facts. The jury has found these issues for the appellee, and we are satisfied with that finding. The fact that the subse. *923 quent insurance in the Orient Company was brought to the attention of the appellant’s agent, with whom alone the insured dealt at all times, and the other fact that request was ma.de of this agent that he indorse the appellant’s consent to this, additional insurance, in writing, on the policy sued on, and the still further fact that the agent told the insured that such indorsement, in writing, was unnecessary, and that, in case of loss, the appellant company would pay without regard to such a technicality, we now assume to be true.

•1. The naked inquiry, then, is, could the agent of the insurer waive the condition of the contract requiring consent for additional insurance to be made, in writing, indorsed on the policy? Or, to put it otherwise, is the insurer estopped from claiming a forfeiture by the acts and conduct of its agent ?

We do not understand that there is any disagreement between counsel as to the character of the agency in this case. Clearly, Roberts, Davis & Co. were general agents. They represented and stood for the company, they received applications, they issued policies, they collected premiums, they received notice of other insurance and gave consent thereto, and, in general, they did for the company whatever it could do in the matter of making and continuing contracts for insurance. The company, being an artificial creature, could only act through human agencies, and what their general agenls did in this case', as indicated above, the company itself may be said to have done.

The power to make the contract of insurance by the general agents, necessarily involves the power, also, to modify or vary the same by subsequent contract. The clause in the contract which requires written consent for additional insurance to be indorsed upon the policy is no more unchangeable, at the pleasure of the parties, than any other provision or condition in the contract. The contract of insurance evidenced by the policy is no more sacred than any other contract, and we have yet to learn that ordinary contracts be *924 tween men may not be altered, varied or wholly.abrogated at the election of the parties to them. The condition of the policy requiring consent, in writing, for additional insurance is inserted for the benefit of the insurer, and we are at a loss to conjecture any reason for holding, that the insurer may not waive it at its pleasure. It is a mere method or manlier of evidencing the insurer’s consent, and it is impossible to conceive why the insurer may not waive this mere manner of assenting, and substitute another. Is it because of some supposed superior dignity of the written consent over parol? The supposition is vain and idle. The parol contract may modify or put an end to the written contract, just as the written may modify or end the parol. Every new contract, whether in writing or parol, supersedes the old, whether in parol or writing, according to the will and purpose of the parties.

From what we have already said touching the power of the general agents of the appellant company, it seems to us to necessarily follow that such agents may waive the condition requiring consent in writing for additional insurance. This case, on its facts as found by the jury, goes far beyond the most of repoi’ted cases in which this question has been passed upon by many courts of last resort in accordance with the views which we entertain. Here the insured actually applied to the company, or its general agents standing for it, to have the proper written consent indorsed, and was refused, on the declared ground that ir, was unusual and unnecessary, and that any loss would be promptly adjusted without regard to that technicality. It would be unconscionable to now allow the company to assert a forfeiture for the doing of, or the omitting to do, that which the insured did or omitted at its own suggestion. To state the defense, thus illumined, shocks conscience and offends judgment.

May, in his work on insurance, states the prevailing tendency of judicial opinion in these words: “In many policies the notice of other insurance is required to be in writing, *925 and indorsed on the policy, and it lias formerly been frequently held to be essential that these particulars should be literally complied with. . . But the courts have become more liberal in favor of the assured in their construction of this sort of stipulation in policies of insurance. While, as we have seen, the old rule required the consent to be in writing- and indorsed on the policy, it is the decided tendency of the modern cases to hold that, if the notice be duly given to the company or its agent, of the additional insurance, and no objection is made, the company will be estopped from insisting- on a forfeiture of the policy because their consent thereto was not indorsed, as literally required by the stipulation.” May on Ins., §§ 369, 370.

Wood on Fire Insurance, vol. 2, p. 802, has this language: “It has formerly been held that, not only notice of the other insurance, prior or subsequent, must be given, but also that it must be indorsed upon the policy when so provided therein. But the tendency of the courts latterly is towards a more liberal construction in favor of the assured, and there is now no question but that oral notice and an oral assent, or acts amounting to an assent, 'without an indorsement upon the policy, is sufficient.”

Flanders on Fire Insurance states the rule thus : “ Where, however, the underwriter has notice of the additional insurance, and, although not formally giving his assent thereto, yet by his acts, such as collecting assessments, treats the policy as iu full force, it will be a waiver of the right to resist a recovery upon that ground.” See pages 47, 51, 56, 57.

In the very recent and excellent work of Biddle on Insurance, the writer’s conclusion from an exhaustive examination of adjudged cases is thus stated : “ Probably any condition inserted in the policy for the benefit of the insurer may be waived by him.” Biddle on Ins., 2, p. 1086.

To the same effect are the following authorities selected from the many examined: Cobb v. Insurance Co., 11 Kan., 93 ; Pitney v. Insurance Co., 65 N. Y., 6 ; Young v. Insurance Co., 45 Iowa, 377 ; Insurance Co. v. Earle, 33 Mich., 143 ; *926 Insurance Co. v. Lyons, 38 Texas, 253 ; Hadley v. Insurance Co., 55 N. H., 110.

The rule now announced was foreshadowed and bound up in the cases of Rivara v. Insurance Co., 62 Miss., 720 ; Insurance Association v. Matthews, 65 Ib., 301; Insurance Co. v. Bowdre, 67 Ib., 620.

2. Has there been any violation of that provision of the policy designated the “ iron safe clause? ” That clause is as follows: “The assured under this policy hereby covenants and agrees to keep a set of books showing a record of business transacted, including all purchases and sales, both for cash and credit, together with the last inventory of said' business; and further covenants and agrees to keep such books and inventory securely locked in a fire-proof safe at night, and at all times when the store mentioned in the w.itliin policy is not actually open for business; . . . and, in case of loss, the assured agrees and covenants to produce such books and inventory, and, in the event of a failure to produce the same, the policy shall be deemed null and void, and no suit or action at law shall be maintained thereon for any such loss.” Now, the evidence shows very clearly that the application of the insured for the policy in suit was completed and signed and the policy delivered not earlier than the seventeenth day of December, 1892. We may properly assume, so far as the rights of the insurer are affected by the date of the contract, that it was actually made on the day named. On that very day the insured took a new inventory of his stock of goods, and this last inventory, as well as the two preceding ones, dated respectively September 17, 1892, and December 17, 1891, were kept in the iron safe, and wei'e produced after the loss. On the seventeenth day of December, 1892, the insured opened a new set of books, transferring to them all footings or balances from his old books, and thereafter, from said seventeenth day of December, entered fully in the new set of books itemized statements of every transaction occurring in the conduct of the business. The *927 forfeiture under the iron safe clause is, by the appellant, contended for because of the failure of the appellee to keep in the iron safe the old books, showing the itemized statements of the transactions antedating the policy sued on, and to produce them after the loss occurred. Why these old books of account were not kept in the safe, but were left outside and consumed in the fire which occasioned the loss, is made clear •by the evidence.

It is perfectly apparent that the insured did exactly what this iron safe clause required him to do. This clause made it obligatory upon him to keep the last inventory of his business, and to keep a set of books showing a record of business transacted, including all purchases and sales, both for cash and credit, and to keep the inventory and books securely locked in a fire-proof safe, and this condition the insured fully complied with. Ilis duty was to keep a set of books showing a record of business thereafter transacted, including future purchases and sales. He did not consent to preserve indefinitely liis old books, showing all the past transactions. So far as this contention may be concerned, it was immaterial whether he had any books of account antedating the policy. He had his inventory showing the amount of stock he had on hand when the policy was issued, and he was to keep a record of his future business transactions, with a view to disclosing, when necessary, when and where and how the stock went. We repeat, the duty laid upon him was prospective, and he fully met it. Of course, the last inventory may have been fraudulent or fictitious, and the making this appear would defeat the right to recovery by the insured; but that is not the point involved in the present discussion. The point in this contention is whether the keepiug the last inventory and a set of books showing the future transactions of the insured in his mercantile business, was compliance with the iron safe clause on the part of appellee. That it was, we entertain no doubt.

Affirmed.