Summary
considering whether insurance policy was void under its terms because “the insured ... concealed or misrepresented ... any material fact or circumstance concerning th[e] insurance” where the policy was issued on a “verbal application”
Summary of this case from Fireman's Fund Ins. Co. v. Great Am. Ins. Co. of N.Y.Opinion
No. 34405.
February 24, 1941.
1. INSURANCE. Mines and minerals.
A reservation to grantor of one-half interest in oil, gas and minerals in land was valid and did not result in grantee and his subsequent grantee not having "unconditional and sole ownership" of land conveyed within meaning of that clause in a fire policy.
2. INSURANCE.
The purpose in requiring an insured to have unconditional and sole ownership of property insured against fire is to give protection not only to those upon whom the loss insured against would inevitably fall except for the insurance and to avoid taking risks for those whose lack of interest or whose contingent interest in the property insured might tend to encourage carelessness or wrongdoing in the use or preservation of the property.
3. INSURANCE.
In action on fire policy, whether insurer's agent issuing policy had been informed of existence of other insurance on house was for the jury.
4. INSURANCE.
If insurer's agent was informed of existence of other fire policy on house, stipulation in policy issued by agent that policy would be void if the house covered by it was or would become covered by other insurance was "waived" by the issuance of the policy notwithstanding stipulations to the contrary contained therein (Code 1930, sec. 5196).
5. INSURANCE.
An insurer's local agent who is furnished by insurer with blank policies to be filled up, countersigned and issued by him has all the powers of a "general agent" of insurer when issuing such policies and may waive any of their provisions.
6. INSURANCE.
Insurer could not escape liability on fire policy because insurer's agent issuing policy had not been informed of deed of trust on property, where insured's husband making oral application was not requested to sign any written application for the policy and answered all questions asked him and therefore did not conceal existence of the deed of trust.
APPEAL from the circuit court of Adams county, HON. R.E. BENNETT, Judge.
Brandon Brandon, of Natchez, for appellant.
The policy of insurance was avoided for breach of warranty as to unconditional title and sole ownership and because of concealment of facts and circumstances concerning the insurance or subject thereof as to encumbrances on the property.
Lester v. Miss. Home Ins. Co., 19 So. 99; Planters Ins. Co. v. Myers, 55 Miss. 479, 507.
The policy of insurance was avoided because of the breach of warranty of other or additional insurance in the provision of the policy against additional insurance being permitted thereunder.
Interstate Fire Ins. Co. v. Nelson, 105 Miss. 437, 62 So. 425, 426; Palatine Ins. Co. v. Smith, McKinnon Son, 115 Miss. 324, 75 So. 564; Scottish Union National Ins. Co. v. Warren Gee Lbr. Co., 118 Miss. 740, 80 So. 9; Ins. Co. v. Crawford, 110 Miss. 493, 70 So. 579.
The terms of the policy itself make any disclosure to the agent ineffective as a waiver or estoppel of the provisions of the policy in view of the expressed terms and provisions of the policy which was issued to and received and accepted by the insured and which, therefore, is the contract between them. The terms of the policy cannot be varied, altered, or modified by parol.
Saucier v. Life Cas. Ins. Co. of Tenn., 198 So. 625; St. Paul Mercury Ind. Co. v. Ritchie, 198 So. 781; Mutual Life Ins. Co. v. Hilton-Green, 241 U.S. 613, 36 S.Ct. 676, 680, 60 L.Ed. 1202; Home Ins. Co. of N.Y. v. Scott, 284 U.S. 177, 76 L.Ed. 230.
W.A. Geisenberger, of Natchez, for appellee.
There was no violation of the policy by reason of misrepresentation or concealment.
Concealment under the terms of the insurance contract exists only where the insured has knowledge of facts material to the risk, which honesty, good faith, and fair dealing require that he should communicate to the insurer, but which he designedly and intentionally withholds.
Conn. Fire Ins. Co. v. Colo. Leasing, etc., Co. (Colo.), 116 P. 154, Ann. Cas., 1912C, 597; Queens Ins. Co. of America v. Cummings (Ky.), 267 S.W.2d 144; Great Am. Ins. Co. v. Clayton (Ky.), 52 S.W.2d 467; Daniels v. Hudson R. Fire Ins. Co. (Mass.), 59 Am. Dec. 192; Clark v. M.F. Ins. Co., 40 N.H. 33; 77 Am. Dec. 721; Sebring v. Fidelity-Phenix Fire Ins. Co. (N.Y.), 174 N.E. 761; Sun Ins. Office, Ltd., v. Mallick (Md.), 153 A. 35; Hanover Fire Ins. Co. v. Nash (Tex.), 67 S.W.2d 452; Milison v. Mutual C.G.F. Ins. Co. (S.D.), 123 N.W. 839; Dooly v. Hanover Fire Ins. Co. (Wash.), 47 P. 507; Alkan v. New Hampshire Ins. Co. (Wisc.), 10 N.W. 91.
If an insurance company elects to issue its policy of insurance against a loss by fire without a written application, and without any representation or inquiry in regard to title or encumbrances, it cannot complain, after a loss has occurred, that an existing encumbrance was not disclosed. The issuance of a policy without a written application and upon the assumed, although mistaken, knowledge of the agent is a waiver of the anti-mortgage clauses of the policy. And this likewise is true as to additional insurance.
26 C.J. 318, Secs. 391, 392; Scottish Union and National Ins. Co. v. Wiley, 110 Miss. 681, 70 So. 835.
The purpose of the "sole and unconditional ownership" clause is to prevent a person who has an undivided or contingent interest in the property from appropriating to his own use the entire proceeds of the insurance taken out upon the valuation of the entire and unconditional title, and to remove from him the temptation to perpetrate fraud and crime.
Loventhal v. Home Ins. Co., 112 Ala. 108, 20 So. 419, 33 L.R.A. 258, 57 Am. St. Rep. 17; Imperial Fire Ins. Co. v. Dunham, 117 Pa. St. 460, 12 A. 668; Gunn v. Palatine Ins. Co., 217 Ala. 89, 114 So. 690; Phoenix Ins. Co. v. Hilliard, 59 Fla. 590, 52 So. 799, 138 Am. St. Rep. 171; Lee v. U.S. Fire Ins. Co., 55 Cal.App. 391, 203 P. 774; Mushiloff v. Am. C. Ins. Co., 102 Conn. 370, 128 A. 33.
It is not aimed at such conditions as exist here, for the appellee has the sole beneficial ownership of the property insofar as it in any wise affects the property insured, and the reservation of the one-half interest in the oil and minerals under the ground does not affect the fee simple title of the plaintiff to what is generally known and embraced within the word "ground." There is no increase in the hazard by reason of this reservation, and the reserver has no title or interest that would affect the insurable interest of this plaintiff and has himself no insurable interest whatsoever, and no title whatsoever to the subject of this insurance nor the ground on which it stands. This fully met the requirements of "sole and unconditional ownership."
Phoenix Ins. Co. v. Bowdre, 67 Miss. 620; Ins. Co. of N.A. v. Pitts, 88 Miss. 587, 41 So. 5.
There was no violation of the policy contract by reason of the additional insurance.
The provision in an insurance policy limiting the amount of insurance and providing against additional insurance unless agreed to by the insurer is a valid provision and will be enforced, but this provision may be waived and if the insurer had knowledge of the outstanding insurance at the time the policy was written, or had notice of the existence of such insurance, then it would be held to have waived the provision of the policy and would be estopped to raise the question after a loss had occurred under the policy. And this is true even though the policy of insurance contained the so-called non-waiver clause providing against the waiver of any of the provisions in the contract unless written or endorsed thereon by a qualified officer or agent of the company.
Rivara v. Queens Ins. Co., 62 Miss. 720; Western Assurance Co. v. Phelps, 77 Miss. 625; Liverpool London Globe Co. v. Sheffy, 71 Miss. 919; Aetna Ins. Co. v. Smith, McKinnon Son, 117 Miss. 327, 78 So. 289; Am. Ins. Co. v. First Nat. Bank, 73 Miss. 469, 18 So. 931; Union Nat. Ins. Co. v. Wiley, 110 Miss. 681, 70 So. 835; Equitable Fire Ins. Co. v. Alexander, 12 So. 25; Stewart v. Coleman Co., 120 Miss. 28, 81 So. 653; N.O. Ins. Co. v. Matthews, 65 Miss. 301; Home Ins. Co. v. Gibson, 72 Miss. 58, 17 So. 13; Phoenix Ins. Co. v. Randall, 81 Miss. 720, 33 So. 500; London Guarantee Acc. Co. v. Miss. Cent. R.R. Co., 97 Miss. 165, 52 So. 787; Hartford Fire Ins. Co. v. Clark, 154 Miss. 418, 122 So. 551; Home Ins. Co. v. Thornhill, 165 Miss. 787, 144 So. 861.
The distinction between the cases of Saucier v. Life Cas. Ins. Co. of Tenn., 198 So. 625, and St. Paul Mercury Ind. Co. v. Ritchie, 198 So. 781, and the case at bar is obvious. In the Saucier case the agent was a soliciting agent; in the instant case, Stewart is a general agent. In the Saucier case as well as in the Ritchie case, the court was dealing with the limitations in a policy of insurance on the authority of special agents, and held that Section 5196, Mississippi Code 1930, did not add to the authority of an agent nor increase the limited powers of a special agent to the broad powers of a general agent.
The appellee recovered a judgment in the court below on a fire insurance policy issued by the appellant. The policy stipulates: "no officer, agent or other representative of this Company shall have the power to waive any provision or condition of this Policy except such as by the terms of this Policy may be the subject of agreement endorsed hereon or added hereto; and as to such provisions and conditions no officer, agent, or representative shall have such power or be deemed or held to have waived such provisions or conditions unless such waiver, if any, shall be written upon or attached hereto, . . . This entire policy shall be void if the insured has concealed or misrepresented, in writing or otherwise, any material fact or circumstance concerning this insurance or the subject thereof; or if the interest of the insured in the property be not truly stated herein; . . . This entire policy, unless otherwise provided by agreement endorsed 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; . . . or if the interest of the insured be other than unconditional and sole ownership; or if the subject of insurance be a building on ground not owned by the insured in fee simple . . ." The appellant says that these provisions of the policy were violated by the appellee, and consequently the court below should have granted its request for a directed verdict in its favor.
The policy was issued by R.P. Stewart, a local agent of the appellant, to whom it supplied blank policies to be filled up, countersigned and issued by him, without referring applications therefor to the appellant. This policy was issued on a verbal application therefor by L.W. Delaney, the appellee's husband, who testified that he told Stewart of an insurance policy then covering the house to be insured, and answered such questions as Stewart propounded to him. Stewart also testified and admitted the verbal application for the policy but said that he did not remember that Delaney told him of the policy then on the house, and would say that he did not so tell him for the reason that a written memorandum made by him when the policy was applied for on which to issue it does not disclose this other policy on the house. The policy was not delivered to Delaney when he applied for it, but was thereafter mailed to the appellee, who received it in due course, but neither she nor her husband read it until after the house covered by it was destroyed by fire. The house and the land on which it was situated was formerly owned by L.W. Delaney, who conveyed it to Rodriguez, who executed several purchase-money notes therefor secured by a deed of trust to Delaney. Delaney's deed to Rodriguez stipulates that "the grantor herein reserves unto himself, his executor, administrators, vendees and assigns an undivided one-half (1/2) interest in all oil, gas and minerals located on said land, together with the right to enter upon said land and explore for same in usual and customary methods." Delaney pledged these purchase-money notes to a bank, and, while they were so pledged, agreed with Rodriguez that he might pay off and discharge the notes by conveying the land to Mrs. Delaney, the appellee here, which he did. The bank had additional security for Delaney's indebtedness to it, would have surrendered the notes to him at any time if requested so to do, and did surrender them to him sometime after this insurance policy was issued.
The reservation to Delaney in his deed to Rodriguez of the one-half interest in the oil, gas and minerals in this land is valid; Moss v. Jourdan, 129 Miss. 598, 92 So. 689; and does not result in the grantee and his subsequent grantees not having "unconditional and sole ownership" of the land conveyed within the meaning of that clause in this insurance policy. "The purpose in requiring the insured to have the unconditional and sole ownership of the property insured is to give protection only to those upon whom the loss insured against would inevitably fall except for the insurance, and to avoid taking risks for those whose lack of interest or whose contingent interest in the property insured might tend to encourage carelessness or wrongdoing in the use or preservation of the property." 29 Am. Jur., Insurance, Sec. 599. L.W. Delaney's ownership of the minerals in this land gave him no sort of interest in the buildings thereon, and the loss occasioned by their destruction by fire would fall wholly on the owner of the surface of the land.
If Delaney advised Stewart of the existence of this other insurance policy on the house here insured, which was for the determination of the jury, the stipulation in the policy that it would be void if the house covered by it was or would become covered by another insurance policy was waived, by his issuing the policy notwithstanding stipulations to the contrary therein. This Court has many times held in accord with the weight of authority elsewhere, — that a local agent of an insurance company who is furnished by it with blank policies to be filled up, countersigned and issued by him has all the powers of a general agent of a company when issuing such policies and may waive any of their provisions. Saucier v. Life Casualty Ins. Co., 189 Miss. 693, 198 So. 625, relied on by counsel for the appellant, deals, in this connection, only with the effect of Section 5196, Code of 1930, on the authority of special agents of an insurance company, and has no application here.
Delaney does not claim to have told Stewart of the deed of trust on the property given him by Rodriguez, which he says he thought had been satisfied, but, be that as it may, he did not conceal its existence from Stewart for the reason that he was not requested to sign any written application for the policy and answered all questions asked him.
It follows from the foregoing views that the court below committed no error (1) in refusing to direct a verdict for the appellant; and (2) in making the other rulings of which the appellant complains.
Affirmed.