Case Name: The Amazon Insurance Company v. William Wall
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1877-12
Citations: 31 Ohio St. 628
Docket Number: 
Parties: The Amazon Insurance Company v. William Wall.
Judges: 
Reporter: Ohio State Reports, New Service
Volume: 31
Pages: 628–634

Head Matter:
The Amazon Insurance Company v. William Wall.
A policy of insurance issued to a mortgagee contained a stipulation that the insurance might be terminated at any time at the request of the assured, the company only retaining customary short rates; also, that if any change took place in the title or possession, the policy should be void. Without the knowledge of the company, the owner sold and con- , veyed the property and satisfied the mortgage. Held, that a subsequent assignment of the policy by the mortgagee to the purchaser, and a verbal agreement between the latter and an agent of the company, having power to make contracts and issue policies, that such assigned policy shall have the force and effect of a new policy to the purchaser, will bind the company.
Motion for leave to file a petition in error to reverse the judgment of the Superior Court of Cincinnati.
Wall brought suit in the Superior Court-of Cincinnati on a fire policy, issued by the Amazon Insurance Company of Cincinnati. The facts are these : James Hamilton was the owner of a-paper mill, with machinery, etc., therein, in Shelby county, Ohio. David 3L Gillespie, as assignee of the Summit Paper Company, had a purchase-money mortgage thereon for $10,866.45, dated April 1, 1875.
William S. Parker was at that time agent of the Amazon Insurance Company, at Piqua, Ohio, with full power to receive proposals for insurance against loss or damage by fire or lightning, and to make insurance by policies of the company, countersigned by himself as such agent, and to renew the same, assent to assignments or transfers, and in all other matters and things to attend to the business and duties of the agency, in manner and form, prescribed by the company. And that agency was in force during all the transactions hereinafter mentioned.
Parker, as such agent, issued, in proper form, a policy of insurance, “ countersigned at Piqna, 0., this 15th day of May, 1875,”- and delivered it to Gillespie, reciting therein that the company, “ in consideration of eighty-three dollars and thirteen cents premium, doth insure D. K. Gillespie, of Piqua, Ohio, against loss or damage by fire or lightning, to the amount of twénty-five hundred dollars, for the term of eleven months, to wit, from the 15th day of May, eighteen hundred and seventy-s¿e, at 12 o’clock, noon, unto the 15th day of April, eighteen hundred and seventy-smw, at 12 o’clock, noon,” “ on his mortgage interest as assignee of the Summit Paper Company,” on the property above mentioned. “ Amount insured, $2,500. Rate, 3J. Premium, $83.11. Term, 11 months. Expiration, April 15, 1876.” The indorsement on the policy, made by the agent, contains the words: “Expires April 15th, 1876;” and the policy was actually delivered by the agent to Gillespie on May 15, 1875.
The policy contained this stipulation : “ This insurance may also be terminated at any time, at the request of the assured, in which event, the company will retain only the customary short rates, for the time the policy has been in force.” And it contained this further clause: If “ any change takes place in the title or possession of the property, whether by sale, lease, legal process, judicial decree, voluntary transfer, conveyance, or otherwise, . ... then, and in every such case, this policy shall be void.”
In September, 1875, Hamilton conveyed the whole property to Wall, and received in exchange from Wall a farm in Champaign county, Ohio. Wall, desiring to have the property unincumbered, made an arrangement with Hamilton and Gillespie, whereby Gillespie agreed to, and did, receive from Hamilton, in lieu of the mortgage on the paper-mill, a mortgage on the Champaign county farm, which mortgage is dated September 25, 1875.
As Wall desired insurance on the property, and Gillespie wanted the benefit of the unearned premium, the whole transaction was fully explained by them to Parker, the agent, immediately after the execution of the mortgage, and the policy was placed in the hands of Parker, who said he would make the transfer, and place Wall in possession of the insurance as Gillespie had it, and Wall agreed to pay Gillespie the sum that might have been due to him for unearned premium. Wall and Gillespie inquired of Parker whether a new policy should be made out, but Parker assured them that this would not be necessary, as a transfer of the policy to Wall would be entirely sufficient.
The policy was then delivered to Wall with the following indorsements thereon: “ The property hereby insured having been purchased by Wm. Wall, the Amazon Insurance Company consents that the interest of D. K. Gillespie in the within policy may be assigned to said purchaser, subject, nevertheless, to all the terms and conditions therein mentioned and referred to. Dated at Piqua, Ohio, this 15th day of October, 1875. Wm. S. Pai’ker, Agent.”
“ Eor value received, I hereby transfer, assign, and set over unto Wm. Wall and his assigns all my right, title, and interest in this policy of insurance, and all benefit and advantage to be derived therefrom. Witness my hand and seal this 15th day of October, 1875. D. K. Gillespie, Assignee.”
Gillespie afterward surrendered to Wall the original mortgage.
Subsequently, on February 23, 1876, the property -was destroyed by fire, while Wall was in possession, its value being in excess of all insurance, and notice was given to the company by Wall, and the loss was proved in due form. But the home office, at Cincinnati, was not informed of the assignment to Wall until after the fire.
The prayer in the petition is that if, in the opinion of the court, it be necessary, the policy may be reformed, so as to operate as an insurance to Wall upon his interest as owner from October 15, 1875, until April 15, Í876, and that he may have judgment, etc.
The answer consisted of the admission of certain alle■gations, and specific denials of other allegations. ■
Judgment was rendered in favor of "Wall, in general term (January, 1878), for $2,668.50, and the company now 'ask leave to file in this court a petition in error to reverse it.
Long, Kramer $ Kramer, for the motion:
The policy insured the assurable interest of Gillespie'as mortgagee and nothing else. When his mortgage was paid off, the contract of insurance was- at an end.
The assignment by Gillespie to Wall, and the consent of Parker thereto, does not make a new policy, nor' change •the-original memorandum of the insurance. It consents .that Gillespie’s interest in the insurance of his mortgage debt may be assigned. If there is no such interest in Gillespie, the assignment .carries nothing, and the consent of Parker can not revive it or give it any force or effect. Bates v. Equitable Insurance Co., 10 Wallace, 33; Easton ,v. Carroll County Insurance Co., 45 Maine, 307; Smith v. Loutage Insurance Co., 3 Ilill, 510; Fogg v. Middlesex Insurance Go., 10 Cushing, 137.
The plaintiff- prayed that the policy might be so reformed as to operate as an insurance to the plaintiff- upon his interest as owner, in the amount and upon the property stated therein, for the unexpired term thereof, to accord with the facts, intentions, and agreements aforesaid.
We claim upon the evidence, as made out, there is no authority for the exercise of this equitable jurisdiction on the part of the court, to make for the parties such a contract as is claimed in the petition. Suydam v. Insurance Co., 18 Ohio, 462; Elstner v. Insurance Co., 1 Disney, 412, and cases there cited; Bliss on Life Insurance, sec. 161; May on Insurance, sec. 566.
Lipman Levy, contra,
as to the enforcement of parol contracts and understandings for insurance, cited Pames v. Insurance Go., 4 Otto, 621; Insurance Co. v. Shaw, 4 Otto, 574. As to the effect to be given to the acts of agents, see Mentz v. Insurance Co., 5- Ins. L. J. .447. As to assignments of policies, see West v. Insurance Co., 27 Ohio St. 1. And as to the effect of the acts of the agent, Parker, see Pratt v. Insurance Co., 55 N. Y. 505; Lightbody v. Insurance Co., 23 Wend. 18; Picol v. Insurance Co., 3 Wood. & M. 529; Gloucester v. Insurance Co., 5 Gray, 497; Beebe v. Insurance Co., 25- Conn. 51; Woodbury v. Insurance Co., 31 Conn. 517; Insurance Co. v. Woodworth, 33 Penn. St. 233; Post v. Insurance Co., 43 Barb. 351; 27 Mo. 693; 13 Wallace, 222; 17 N. Y. 124.

Opinion:
Okey, J.
There is some conflict in the testimony, but it can serve no useful purpose to discuss the evidence in the report of a case. The facts established by the clear weight of testimony are as set forth in the foregoing statement.
Counsel for plaintiff in error have insisted, from some expressions in the testimony of the agent, Parker, that at the time he consented to the assignment of the policy to Wall, he was not informed that Gillespie had already taken a mortgage on the Champaign county land in lieu of his mortgage on the mill; and it is urged that the company was in this way improperly deprived of its right of subrogation, and hence there should be no recovery in this action. But we are of opinion that the agent consented to the assignment with full knowledge of all the facts, and therefore we are relieved from any consideration of the doctrine of subrogation.
The strongest objection to a recovery, no doubt, is, that the property was sold and conveyed to Wall; that Gillespie accepted a mortgage from Hamilton, on a farm in Champaign county, in lieu of his mortgage on the mill; that this was done without the knowledge or assent of the insurance company or its agent; that by the terms of the policy it became void when there was a change in the title or possession of the property; and that where a policy is terminated in this way without notice to the insurer, and without his fault, such insurer may retain the unearned premium; so that there would be no consideration for the agreement with Wall. We need not decide how tenable, under other circumstances, this position might be; for, as we have seen, Wall desired insurance on the property, and it was quite immaterial to him whether he obtained it through a new policy or by an assignment of the policy issued to Gillespie. The exact condition of the property —the conveyance to Wall and the new mortgage to Gillespie—was fully explained to Parker, the agent, and with such knowledge he agreed that Gillespie's policy, when assigned to Wall, should have the force and effect of a new policy. Wall, believing Parker's statement that this was the proper course, relied and acted on it. Under such circumstances, however the transaction may be viewed, it is very clear that the company is estopped to deny such act of its agent. Wood on Insurance, sec. 407; Pratt v. New York Central Ins. Co., 55 N. Y. 505; Ætna Ins. Co. v. Olmstead, 21 Mich. 246. This, of course, is opposed to Cockerill v. Cincinnati Mut. Ins. Co., 16 Ohio, 148. But that case, holding that verbal agreements with respect to insurance are invalid, is virtually overruled in the Dayton Ins. Co. v. Kelly, 24 Ohio St. 345. And see Belief Fire Ins. Co. v. Shaw, 94 U. S. 574; Wood on Ins. 10; May on Ins. 41; Flanders on Ins. 118.
There was no necessity for a reformation of the policy. As to the mistake on the face of the instrument, that the risk commenced in 1876 and terminated in 1877, the error is apparent from other parts of the instrument and the time of'its delivery. Manifestly, 1875 and 1876 were intended; and, indeed, this is admitted. By the application of the plainest principles, such mistakes will be disregarded. Wood on Ins., sec. 207. Nor is it necessary to reform the instrument so as to apply to the interest of Wall as owner. There was no mistake. It was agreed .that the policy should stand for the interest of Wall as owner, and the facts, showing how the liability arose, are fully stated in the petition.
Motion overruled.