Kitchen v. Hartford Fire Insurance Company.

uary 12, 1884, at noon. The policy was issued upon a written application signed by the assured, which was made a condition of the insurance, a part of the contract, and a warranty on the part of the assured. The property insured consisted of a store building, valued at $1,200, and insured for $800, and a stock of goods contained in the store building, valued at $5,000, and insured for $1,500, located at Bancroft, Shiawassee county, Michigan. The application for insurance was made to F. M. Douglas, who was an agent of defendant residing at Bancroft, and duly authorized to solicit and forward applications for insurance, deliver policies and renewals to applicants, and collect and forward premiums on same, subject to a book of instructions furnished him and made a part of his authority and also to such rules and instructions as he might receive from time to time from the Chicago office. The book of instruction and the rules and instructions were not given in evidence.

The company employs two kinds of agents, one called a surveyor, to which class Douglas belonged. These agents were not intrusted with blank policies, and had no authority to fill out policies, or make indorsements thereon. The other kind are styled recording agents, who are intrusted with the custody of policies, and have authority to fill out and deliver them, as well as to make indorsements thereon. The application signed by plaintiff was dated January 11. In it nothing is said about the effect upon the policy to be issued thereunder in case other insurance is effected upon the property insured without the consent of the company. The only reference to other insurance are the following questions: "What other insurance on property; in what company, and rate ?" To which there is no answer. What rate has been paid?" Answer. "Two." "Has risk been declined by any company ?" A. "No." Mr. Douglas was postmaster at Bancroft, and taking this application from Mr. Kitchen, forwarding it to the company, delivering the policy, and collecting the premium in this single case, is all the insurance business he ever did.

The policy contains the following clause: "If an application, survey, plan or description of the property herein insured is referred to in this policy, such application, survey, plan, or description shall be considered a part of this policy, and a warranty by the assured; and if the assured, in written or verbal application, makes any erroneous representations, or omits to make known any fact pertaining to the risk; or if there shall be any other insurance, whether valid or otherwise, on the property insured, or any part thereof, at VOL. LVIII 44

Kitchen v. Hartford Fire Insurance Company.

the time this policy is issued, or at any time during its continuance, without the consent of this company written hereon,

this policy shall be void."

When Mr. Kitchen made the application to Mr. Douglas for the insurance, he informed him that he should take out other insurance upon his stock with Mr. Simonson, another insurance agent at Bancroft, who was then absent, as soon as he returned home. Mr. Douglas says he told Mr. Kitchen it would not be necessary to mention it in the application, but when he got his policy from Mr. Simonson he would have to get permission from the Hartford. After he received the Hartford policy, and within two or three days, he took in the policy of the Sun Insurance Company, represented by Mr. Simonson, and Mr. Kitchen testifies that he at once informed Mr. Douglas, and requested him to notify his company of such additional insurance.

The store and contents burned September 3, 1883, and were totally lost. October 8, 1883, proofs of loss were made, and forwarded to the company's agency at Chicago on October 16, and soon after he received the following reply:

"CHICAGO, October 19, 1883.

"ELIJAH D. KITCHEN, Esq., Bancroft, Michigan :

"DEAR SIR-We are in receipt of yours of the 16th inst., inclosing proofs of loss under policy No. 38034, of the Hartford Fire Insurance Company of Hartford, Connecticut, issued at its general agency at Chicago, Illinois, insuring $800 on building, and $1,500 on stock of merchandise therein, property belonging to you, and located at Bancroft, Michigan. Upon examination of such proofs of loss, we learn that there was $2,500 other insurance upon the stock insured in said Hartford policy, which by its terms is void by reason of such other insurance without notice to this company, and its consent written thereon. We refer you to the conditions of your said Hartford policy, and hereby notify you that this company denies any and all liability under said policy number 38034, by reason of the other insurance as aforesaid, without notice and the consent of this com. pany written thereon. Accompanying said proofs are duplicate bills of purchase which we hold subject to your order, in case you desire to use them elsewhere.

"Yours very truly,

"W. H. TAYLOR,

"Second Assistant, G. A.”

Kitchen v. Hartford Fire Insurance Company.

The plaintiff contends that his case comes within and is ruled by Westchester Fire Ins. Co. v. Earle, 33 Mich. 143. On the other hand, the defendant claims that the case is ruled by the principles laid down in N. Y. Cent. Ins. Co. v. Watson, 23 Mich. 486. Both of those cases turned upon the effect to be given to the clause in policy which rendered it void in case any other insurance had been or should be made upon the property, and not consented to in writing by the company; and also whether under the circumstances of each case there had been a waiver of the condition or an estoppel by acts in pais by the company.

In the Watson case additional insurance had been taken out, and the company had never consented in writing. The trial judge left it to the jury to determine whether or not there had been any waiver of this condition or of the forfeiture under it. This court held that there was nothing to authorize this question to be submitted to the jury; that under the decisions of Western Ins. Co. v. Riker, 10 Mich. 279, and Security Ins. Co. v. Fay, 22 Mich. 467, the policy became absolutely void at once upon obtaining the last insurance without consent; that nothing could revive them short of a new contract on valid consideration, or such conduct as, by misleading the insured to their prejudice, would operate as an estoppel. And speaking of the case before it, the chief justice who delivered the opinion said: "There is no item of testimony tending, in the remotest degree, to show that any such contract was made, or that the insured did any thing by the encouragement of the plaintiff in error, or their lawful agents, to their own prejudice, or any thing which they would not have done under other circumstances. There is no evidence that the insurers knew any thing about it. But mere knowledge of it, without some other act knowingly done to the prejudice of the insured, would not amount to any thing more than knowledge that the latter had seen fit to terminate the policies."

This case was followed by Allemania Fire Ins. Co. v. Hurd, 37 Mich. 11, where a similar clause was under consideration, and there it was not claimed that the company ever consented to the additional insurance, or had any notice thereof, except as appeared from a letter written by the agents of the company to the insured in reply to one received by them, as follows:

"GENTLEMEN Your favor of the 30th inst. at hand and noted. We will of course allow other concurrent insurance with the Allemania policy, and will also place you more insurance at same rate

Kitchen v. Hartford Fire Insurance Company.

that we charged you before, and do it in A 1' company or companies. Our Mr. Bussey is at present in the western part of the State on special work. Trusting to hear from you at your earliest

convenience, we remain," etc.

It was held that this letter did not amount to a consent to any specific additional insurance, although it expressed a willingness to permit additional insurance, and offered to place it upon the same property at the rates before charged. Mr. Justice MARSTON said: "The correspondence between the parties would not take the place of the consent required by the terms of the policy, and the policy of insurance issued by the plaintiff in error became absolutely void at once, upon the obtaining of the additional insurance without consent."

The policy in the case of Westchester Fire Ins. Co. v. Earle, 33 Mich. 143, contained a like clause, and one question prominently discussed in that case was whether there could be a waiver by parol, or by acts and conduct of the written condition; and it was held that there could be. The charge of the court under which a recovery was had, and which was sustained in this court, was as follows: "That in order to escape the condition the insured must show that the agent had done some act, or made some representation or remained silent when he ought to have spoken, and thereby misled the insured, and induced them to rely on the policy, to their injury, and by causing them to believe the policy remained in force, prevented them seeking other insurance, and that such conduct would preclude the company from setting up the condition, and that notice to the agent was notice to the company." The testimony in the case showed that the first application for further insurance was to the agent, who said he would try to get it placed in some other company, and after waiting a time without his doing so they placed the risk elsewhere. In a conversation the agent said it would make no difference to the company, but did not say in so many words that it need not be consented to in writing, though that inference was drawn from all that took place. Immediately after the new insurance was obtained they informed the agent of the amount by a letter left in his office, and shortly after met the agent, who referred to the new insurance, and asked why it had not been placed with him. No objection was made, and no suggestion offered, that any breach of condition had been created or would be relied on. Upon this testimony this court held that the jury had the right to

Kitchen v. Hartford Fire Insurance Company.

believe, and that the insured had reason to rely on the validity of their insurance, and that nothing had been done to invalidate it; and Mr. Justice CAMPBELL said: "If Atwater," the agent, "himself had been the insurer, it would be difficult to find a plainer case of estoppel. It would have been a direct fraud to repudiate the obligation after such conduct as could not have failed to induce the insured to rest satisfied with their policies."

It is now proper to return to the record in this case. The judge certifies that the bill of exceptions contains substantially the testimony given on the trial. With reference to obtaining additional insurance the plaintiff testified that when he applied to Mr. Douglas the following conversation occurred: "I told him that I wanted to take $1,500 in his company on the stock, and $800 on the building, and that I was going to take $2,500 in the other company with Mr. Simonson as soon as he returned home. Mr. Douglas said that was all right. When he wrote the application out, I says to him, 'Now, notify your company that I am going to put this additional insurance on when you send in this application.' He says to me, 'It is unnecessary; ours is the first policy, and we don't care about that.' Then I told him to send it any way, and tell them I was going to put additional insurance on. He says, 'It is only a supposition you are going to put additional insurance on, and we cannot notify the company on supposition."" He further testified as follows: "Mr. Simonson came back and gave me the application, and when this second policy came back that I got from Mr. Simonson, I was going to either my dinner or my supper- I will not be sure which -and had this policy with me. Mr. Simonson brought it in, and I took it. I called for my mail when Mr. Douglas was there. I says to him, if you have not informed your company that I have put this additional insurance on when you sent in the application, do it now, for here is the policy.' I had the policy in my hand, at the time, that I got from Mr. Simonson, the same day I got it. I never had any other talk with Mr. Douglas until after the fire. He made no answer."

Mr. Douglas' attention was called to this testimony, and he gave his version of the matter as follows: "That Mr. Kitchen said he expected to take some additional insurance with Mr. Simonson, but did not tell him the company or the amount; that he replied: When you get your insurance, you can get permission, or we will have to get permission from the company (the Hartford company);"