CONTINENTAL INSURANCE COMPANY v. RUCKMAN.

1127 ILLINOIS, 364.]

INSURANCE. IF PROOFS OF LOSS ARE SERVED AND RETAINED BY AN INSURANCE COMPANY WITHOUT OBJECTION, and the company refuses to 'pay the loss upon some other grounds than defects in the proofs, all further performance of the conditions in relation to proofs of loss is waived, and the company is estopped from making any formal objections to the proofs. INSURANCE - GENERAL AGENTS, WHO ARE. One representing an insurance company in a particular locality, and supplied with blank policies properly signed by the company, which he is authorized to fill up, countersign, and deliver to the assured, is a general agent in the matter of soliciting and accepting risks and agreeing upon a settlement of terms of insurance, and carrying such agreement into effect by the issuing of policies.

A GENERAL AGENT OF AN INSURANCE COMPANY WILL BE PRESUMED TO POSSESS competent authority to stipulate for an insertion in an insurance contract of a clause relating to the occupancy of the buildings to be insured.

INSURANCE-LIMITATION OF POWERS OF AGENTS. - A condition in a policy of insurance that "it is further understood and made a part of this contract that the agent of this company has no authority to waive, modify, or strike out of this policy any of its printed conditions," does not have the effect of limiting the power of an agent of a company to make an agreement before the issuing of the policy, that it shall contain a condition permitting the building insured to remain vacant a specified length of time, without constituting a breach of the policy. The condition in question is merely a limitation upon the powers of the agent to waive or modify the terms of a policy after it has been issued. Insurance. — General Agent OF INSURANCE COMPANY MAy Delegate HIS POWER TO A CLERK, ASSISTANT, OR SUBAGENT to the extent of authorizing the latter to agree that a policy to be issued shall contain a condition permitting the buildings insured to remain vacant for a period not exceeding thirty days without notice to the insurer.

INSURANCE. — A STATUTE MAY MAKE FOREIGN INSURANCE COMPANIES RESPONSIBLE FOR THE ACTS of those who assume to aid them in the transaction of their business, and this is the effect of the statute of the state of Illinois declaring that "the term 'general agent' used in this section shall include an acknowledged agent, surveyor, broker, or any other person or persons who shall in any way aid in transacting the insurance business of any insurance company not incorporated by the laws of this state."

INSURANCE REFORMATION OF POLICY.

Where a clerk of a general agent

of an insurance corporation agreed with an illiterate man to issue him a policy which should contain a condition that the buildings insured might remain vacant and unoccupied thirty days without notice to the insurer, and such clerk delivered a policy to the insured which he represented as containing the stipulation agreed upon, but which in fact contained a condition that if the buildings insured became unoccupied without the consent of the company's indorsement thereon, the policy should become void, it was held, after a loss had occurred, that a suit might be main

tained to reform the policy so as to conform it to the agreement made with the assured before its issuance, and that a recovery might be had in the same suit upon the policy as thus reformed.

BILL in chancery for the reformation of a policy of insurance, and for a decree for the amount of loss sustained by the assured. Decree in favor of the complainant.

Baker, McNulty, and Bo1er, for the appellant.

Wise and Davis, for the appellee.

BAILEY, J. This was a bill in chancery, brought by Stephen Ruckman against the Continental Insurance Company of the city of New York, praying for the reformation of a policy of insurance, and for a decree for the amount of the complainant's loss and damage by fire to the property insured. The policy in question bore date March 24, 1884, and insured the complainant, for the term of three years, against loss or damage by fire, in the sum of four hundred dollars on his onestory, frame, shingle-roof dwelling-house, and six hundred dollars on his log barn, situate in St. Charles County, Missouri. The following facts shown by the complainant's evidence are in no way contradicted:

The policy was obtained by the complainant from the defendant through the agency of one Milne, an employee of Whipple and Smiley, the defendant's local agents at Alton, Illinois. On the day next prior to the date of the policy, Milne came to the complainant at his place in St. Charles County, Missouri, and solicited said insurance. The complainant expressed a willingness to take out a policy on said buildings, but told Milne that he expected to have them rented, and that sometimes they might be vacant five, ten, or fifteen days, and asked him if that would make any difference with the insurance. Milne assured him that if they did not remain vacant to exceed thirty days, the insurance would not be affected, and agreed that the policy should so provide; but that if the vacancy should continue for a longer period, it would be necessary for the complainant to notify the company, and get a permit for a further period of thirty days. On these terms, the complainant agreed to take the policy. The next day he went to the office of Whipple and Smiley for the policy, and found Milne there alone, no other person being in the office. Milne thereupon took a blank policy, filled it up, and delivered it to the complainant, and received from him the premium. The complainant is an illiterate man, not

being able to read or write, and that fact was known to Milne at the time he filled up and delivered the policy. On receiving it, the complainant asked Milne whether the clause in relation to the vacancy of the buildings was in it, and was told by him that it was; and the complainant had no knowl edge that the contrary was the fact until after the destruction of the buildings by fire.

In point of fact, the condition agreed upon was not in the policy, but among its conditions was one providing that if the buildings insured became unoccupied without the consent of the company indorsed thereon, the policy should be void. A tenant, who went into possession March 1, 1885, continued to occupy the premises, using the house for a dwelling and the barn for keeping therein his domestic animals, his hay, and other personal property, until October 21, 1886, at which date he moved out of the house, leaving it unoccupied, and moved into another house about a quarter of a mile distant therefrom. On the first day of November, 1886, the house and barn were both destroyed by fire, the house at that time remaining unoccupied, the former tenant, however, still retaining the key to the barn, which he kept locked, and having therein a load of hay, a hay-frame, twelve bushels of potatoes, and some lumber. Proofs of loss were furnished by the complainant to the insurance company, showing that the house was unoccupied at the date of the loss; and the defendant thereupon refused to pay the loss, basing its refusal upon the alleged breach of the condition of the policy relating to the occupancy of the buildings.

The cause was heard on pleadings and proofs, and a decree rendered reforming the policy by inserting therein a provision that the buildings insured might remain vacant and unoccupied thirty days, but no longer, without notice to the defendant, and also decreeing that the defendant pay the complainant, within ten days, the sum of $1,049.50, with legal interest thereon from the date of the decree, together with costs of suit, and that, in default of such payment, execution issue therefor. From this decree the defendant appealed to the appellate court, where said decree was affirmed, and, by a further appeal, the defendant has brought the record to this court.

It is urged as a ground for the reversal of the decree that the complainant failed to perform the condition of the policy in relation to preliminary proofs of loss. It is not disputed

that proofs were served consisting of a statement in relation to the circumstances of the loss, made by the complainant under oath, and a certificate by a justice of the peace residing in the vicinity of the buildings destroyed. It may be that these proofs failed in some particulars to answer all the requirements of the policy; but whether they did or not is wholly immaterial, since the defendant, on receiving the proofs, instead of pointing out the deficiencies therein, and requiring a further statement and certificate, refused to pay the loss, placing its refusal wholly upon the ground that the condition prohibiting a vacancy of the buildings without notice and consent had been broken. Where proofs of loss are served, and retained by the insurance company, without objection, and the company refuses to pay the loss, placing its refusal upon some ground other than defects in the proofs, any further performance of the condition in relation to proofs is waived, and the company is estopped, when sued on its policy for the loss, to make any formal objections to the proofs: Lycoming Fire Ins. Co. v. Dunmore, 75, Ill. 14; Williamsburg City Fire Ins. Co. v. Cary, 83 Id. 453; German Ins. Co. v. Ward, 90 Id. 550; Phænix Ins. Co. v. Tucker, 92 Id. 64; 34 Am. Rep. 106; Grange Mill Co. v. Western Assurance Co., 118 Ill. 396; Scammon v. Commercial Ins. Co., 20 Ill. App. 500.

The ground, however, for a reversal of the decree upon which reliance is chiefly placed by the defendant is, that Milne was not the defendant's agent, and had no authority to stipulate on its behalf for a clause in the policy permitting the buildings insured to become and remain vacant and unoccupied for thirty days without invalidating the insurance. The contention is, that Milne was merely an agent or employee of Whipple and Smiley, and that the maxim, Delegatus non potest delegare, applies. Whipple and Smiley, though representing their principal in a particular locality or within a limited territory, and therefore called local agents, were in fact general agents of the defendant in the matter of issuing policies. They were not only appointed agents, but supplied with blank policies properly signed by the company, which they were authorized to fill up, countersign, and deliver to the assured. The rule is well established that this constituted them the general agents of the insurers in the matter of soliciting and accepting risks, agreeing upon and settling the terms of insurance, and carrying the same into effect by issuing the

policies: Pitney v. Glens Falls Ins. Co., 65 N. Y. 6; Georgia Home Ins. Co. v. Kinnier's Adm'x, 28 Gratt. 88; Viele v. Germania Ins. Co., 26 Iowa, 9; 96 Am. Dec. 83; Carroll v. Charter Oak Ins. Co., 40 Barb. 292; Etna Ins. Co. v. Maguire, 51 Ill. 342; May on Insurance, sec. 126.

Whipple and Smiley, possessing as they did the powers of general agents in the matter of making contracts of insurance and issuing policies, will be presumed to have possessed competent authority to stipulate for the insertion, in the insurance contract with the complainant, of the clause in question, relating to the occupancy of the buildings to be insured. Such stipulation was clearly within the apparent purview of their agency, and unless there were limitations upon their authority of which the complainant had notice at the time the contract was made, the defendant cannot now set up want of authority in them.

But it is said that the complainant was notified by the terms of the policy which he received that no agent of the insurance company had authority to enter into a contract of insurance upon any other terms or conditions than those embodied in the blank policies furnished by the defendant to Whipple and Smiley. Those blanks, it is true, contained the following condition: "It is further understood and made a part of this contract that the agent of this company has no authority to waive, modify, or strike from this policy any of its printed conditions." That this clause cannot have the effect here contended for, is apparent from either of two considerations. At the time the contract of insurance was agreed upon, which was the day next prior to the delivery of the policy, the complainant, so far as the evidence shows, had no notice that any such clause was contained in the company's blanks. And it is doubtful whether even the delivery of the policy to him was notice of its contents, when that fact is taken in connection with his inability to read it, and Milne's assurance that it was draughted in accordance with the contract. The other reason is, that the clause above quoted, when the printed conditions of the policy are subjected to the strict rule of interpretation which properly applies to them, neither is nor purports to be a limitation upon the power of the company's agents in agreeing upon and settling the terms of the contract of insurance. It is a limitation upon powers of agents to waive, modify, or strike from the policy any of its printed conditions. A waiver is the voluntary yielding up by a party of some exist