Tilton v. Farmers' Ins.

Defendant, a town co-operative fire insurance company, engaged in business in the town of Palatine, Montgomery county, in this state, on or about January 21, 1909, delivered to plaintiff a fire insurance policy, dated October 15, 1908, insuring plaintiff’s buildings in said town against loss by fire in the sum of $3,550, for the period of five years from its date. It contained a provision that in case the assured should already have made any other insurance on the property, not notified to the company, or in case the assured, or the assigns of the assured, should thereafter make any other insurance on said property and should not with all reasonable diligence give notice thereof to the company and have the same indorsed on the policy or otherwise acknowledged in writing, the policy should cease and be of no effect. The property was not otherwise insured at this time. On May 31, 1910, plaintiff obtained $3,000 additional insurance thereon, without giving notice thereof and having the same indorsed on the policy or otherwise acknowledged in writing. The property was totally destroyed by fire October 31, 1910, and such notice had not been given and such indorsement or acknowledgment had not been made at that time.

The policy contains a provision which requires a person, who has been insured and has sustained loss or damage by fire, to give notice thereof to the secretary forthwith and within 20 days after loss to deliver a. particular account thereof, or of the damage, signed by his own hand and verified by his oath or affirmation, with other particulars therein specified. Plaintiff’s husband notified defendant’s secretary of the fire two days thereafter and gave him a verified statement or inventory of the loss 19 days thereafter. This did not comply with the policy, but was not returned. On March 10, 1911, he gave him proof of loss, substantially in proper form, and this was not returned.

Section 10 of defendant’s articles of association, written upon the face of the policy, provides that the directors shall, after receiving notice of any loss or damage sustained and after ascertaining the same or after the rendition of any judgment therefor, apportion the same among the members thereof as therein set forth. Plaintiff was a member of the defendant company. Insurance, based upon application in writing, a promissory, note for the assessments, and subscribing the articles of association, were among the requirements for membership. The policy was issued by defendant’s secretary, John Saltsman, who was authorized to take applications, to issue policies, and to consent to additional insurance. So far as appears, written application was not made for the policy in suit, and the note required was not given. Saltsman had issued another policy upon the property, October 15, 1903, upon the same conditions for the same period, and in the same amount. Ap-i plication in writing was made and a note was given at this time, but it does not appear that the articles were actually subscribed. Plaintiff and her husband claim that they asked for a permit for additional insurance when they made application for the first policy, but that Salts-

“He (her husband) says, ‘You are Mr. Saltsman,’ and shook hands and spoke about the permit we did not get. . Mr. Saltsman says: ‘Your insurance has expired. I better make out a new one and send it down, the new one.’ I told Mr. Saltsman I did not want to let it run out and I would let him have the candy for $1.25, which would go for the application. I says, ‘Send down the permit with the policy.’ He said, ‘All right,’ and then he , went out.”

At the close of her cross-examination, however, she testifies that Saltsman said that he would have to present the request to the board. Her husband confirms her testimony as to the reference by himself at this time to the permit in connection with the other policy, and then testifies:

“I said to him, T want that permit.’ He says: T cannot give it now. I will have to bring it before the board of directors.’ I says, ‘Do it.’ Then he said he would send down the policy, he had renewed, he would send it down later.”

He also claims that he told Saltsman about ten days later, as he was passing him at a corner, that he was going to take out other insurance, and thinks that Saltsman said, “All right.” Saltsman denies all of this, except that he was at the factory. Plaintiff also testifies that she asked Saltsman for a vacancy permit about six days before the fire and that he told her it would be unnecessary. He says that she merely asked whether it would make any difference if the house was vacant while under repair, and that he answered that the company preferred to have it occupied, to which she replied that it would be for only a short time. That permit was not indorsed. She says that the policy was inclosed in an envelope and was lying on the seat of her wagon at the time. Saltsman says that he did not see it. She also says that the envelope was opened by her husband after the fire and that she did not see the policy until .then. Her husband says that he saw the policy for the first time after the fire, that the envelope was open at the time, and that he did not open it. One or two assessments were collected early in 1909, but none after the additional insurance was effected.

Plaintiff’s husband notified Saltsman of the loss two days after the fire and at the same time requested him to make the necessary indorsement for additional insurance, stating that he had overlooked the requirement as to other insurance, but Saltsman refused. He had the other policies with him and showed them to Saltsman, who did not

This review, in detail as it is, has been made necessary because of the contradictions in the testimony, and because, under the motions of plaintiff and defendant at the close of the case, all questions are here for determination.

[2] It is well settled that where an insurance company issues a policy, with full knowledge of facts, which would render it void in its inception, if its provisions were insisted upon, it will be presumed that it by mistake omitted to express the fact in the policy, waived the provisions, or held itself estopped from setting them up, as a contrary inference would impute to it a fraudulent intent to deliver and receive pay for an invalid instrument. Gray v. Germania Ins. Co., 155 N. Y. 184 , 49 N. E. 675 ; Wood v. American Fire Ins. Co., 149 N. Y. 382 , 44 N. E. 80 , 52 Am. St. Rep. 733 ; Robbins v. Springfield F. & M. Ins. Co., 149 N. Y. 477 , 484, 44 N. E. 159 .

[3] Plaintiff invokes this principle here. Of course, there would be no question .about its applicability, if the additional insurance had been in force, to defendant’s knowledge, at the time of the delivery by it of its policy. Defendant’s secretary had authority to consent to additional insurance.- It could only be effected, without affecting the validity of the policy, by notice thereof and by indorsement on the policy or other acknowledgment in writing. Notice to the secretary was notice to the company, but the policy also required indorsement thereon or other acknowledgment in writing to make his consent effective.

[4] The conditions of the policy and the limitations to the authority of the secretary appeared on the face of the policy. They were a part of the contract, and plaintiff is presumed to have contracted with reference to them. Quinlan v. P. W. Ins. Co., 133 N. Y. 356 , 31 N. E. 31 , 28 Am. St. Rep. 645 ; Baumgartel v. P. W. Ins. Co., 136 N. Y. 552 , 32 N. E. 990 ; Skinner v. Norman, 18 App. Div. 616 , 46 N. Y. Supp. 65 . The policy was issued without a new application and without a permit for additional insurance. It was delivered to plaintiff and remained in her custody thereafter, without objection and without examination. Upon its delivery and acceptance, the contract of insurance was complete in all its terms and binding upon both parties.

[5] Plaintiff is a successful business woman, fully able to comprehend and protect her interests, and there was nothing to prevent her from reading the policy. She was bound to take notice of, and is not excused because she omitted to acquaint herself with, its pro

[6] Under those circumstances, there is no estoppel, even if it be assumed that plaintiff asked Saltsman, at the time of the meeting in the factory, to send the permit down with the policy, and that he said, “All right,” as plaintiff testified, or if it be assumed that plaintiff’s husband told Saltsman ten days after that meeting, and before the delivery of the policy, of his intention to procure additional insurance and that Saltsman then also -said, “All right.” And, if Saltsman told plaintiff that it would be necessary to present the request to the board, as plaintiff stated at the close of her cross-examination, and as her husband stated in each instance, that was not an agreement to issue the permit. However, the application for the first policy did not refer to additional insurance in any way and there was no written application for the one in suit. Plaintiff and her husband say that permission for additional insurance was asked for on each occasion. Salts-man says not. Neither policy gave permission. Plaintiff admits that she knew that the first one did not and says that she did not read the one in suit, because she supposed that it had been properly indorsed. The life of the first policy was five years, and the one in suit had been in plaintiff’s possession for about seventeen months, when the additional insurance was effected. The fire occurred about five months after this, and plaintiff’s husband then said, in effect, that the requirements as to additional insurance had been overlooked. The evidence shows that such was the fact.

[7] There was a forfeiture, &nd it remains to be determined whether defendant has waived or is estopped from claiming it. The circumstances and acts required to constitute a waiver or an estoppel are well established. In the absence of express waiver, some of the elements of an estoppel must exist. The insured must have been misled by some act of the insurer, or it must, after knowledge of the breach, have done something which could only be done by virtue of the policy, or have required something of the assured, which he was bound to do only under a valid policy or have exercised a right which it had only by virtue of such a policy; but neither an estoppel nor a waiver can be inferred from mere silence or inaction. Gibson Electric Co. v. Liverpool, L. & G. Ins. Co., 159 N. Y. 426 , 54 N. E. 23 .

[8] There was no express waiver here, but it is claimed that defendant’s secretary directed or requested plaintiff to present her proof of loss in time. This claim is based upon the testimony of plaintiff’s

[9] Under the articles of association, the power or authority to adjust was in the board of directors. These articles were written upon the face of the policy, and plaintiff was a member of the company, so that it must be presumed that she had knowledge of the limitations to the power or authority of the secretary. Moreover, there is no evidence that the board gave him the power or authority to adjust in this case. In any event, the direction or request to present proof of loss, if made, was, at the most, only a qualified one and shows on its face that Saltsman did not intend thereby to bind defendant, even if he had the power so to do. Plaintiff could not have been misled by it. Saltsman says that they did not talk about the proofs very much and that he said nothing more than that “the rule was for twenty days after the fire.” That was simply a statement relating to a policy requirement, and no direction or request can be inferred from it. Moreover, Saltsman had just refused the request of plaintiff’s husband to indorse permission for additional insurance on the policy, so that it seems improbable that he followed such refusal with a direction or request to present proof of loss in time. It seems to me that plaintiff’s husband is mistaken in his interpretation of what was said to him by Saltsman.

[10] The retention of the verified statement or inventory, presented 19 days after the fire, and proof of loss thereafter presented, do not operate as an estoppel. Plaintiff was not misled thereby. Her rights were lost before presentation, and her position was not changed because defendant ignored it. Perry v. Caledonian Ins. Co., 103 App. Div. 113 , 93 N. Y. Supp. 50 . The irregularity in the statement or inventory would probably have been waived by such retention, if there had been no forfeiture; but the forfeiture itself was not waived thereby.- The statement of Saltsman to plaintiff’s husband that he would attend, or try to attend, a meeting of the adjusters for the other companies, if it was made, does not affect the matter. He did not attend. And the meeting of the directors, subsequently held, to which plaintiff and her husband were invited, and which the latter attended, was held at the special request of plaintiff herself, and nothing was said or done at that meeting to recognize the validity of the policy or to mislead plaintiff. Her husband left the meeting, threatening suit. The policy was declared void immediately after the fire, and was not recognized by defendant thereafter. Defendant did not request plaintiff to present proof, of loss or to perform any other act under the policy, did

The complaint must therefore be dismissed, with costs. Findings may be prepared accordingly.