Case Name: Roberts vs. The Continental Insurance Company
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1877-01
Citations: 41 Wis. 321
Docket Number: 
Parties: Roberts vs. The Continental Insurance Company.
Judges: 
Reporter: Wisconsin Reports
Volume: 41
Pages: 321–329

Head Matter:
Roberts vs. The Continental Insurance Company.
Insurance against Eire: Waiver: Bvidence. (1) Waiver, by act of agent, of condition named in policy, as to additional insurance. (2) Evidence as to agent’s knowledge.
1. If the agent of an insurance company, empowered to take risks and issue policies, knows, when he issues a policy, that there is other insurance upon the property, his failure to write the company’s consent thereto in. the instrument will not defeat an action thereon, although the policy itself declares that it shall he void in case the assured “shall have or shall hereafter make any other insurance upon the property without the consent of the company written herein; ” and also declares that “ the use of general terms, or anything less than a distinct, specific agreement clearly expressed and indorsed upon the policy, shall not he construed as a waiver of any printed or written restriction therein.'’
2. The question of fact was, whether defendant’s agents, when they issued the policy in suit for $1,200, knew that there was other insurance upon the property for $600; and there was conflicting evidence upon that question. It being stipulated that the value of the property when the policy was issued, was only $1,800, defendant’s said agents, as witnesses in its behalf, were asked, 1. Whether there was any rule of the company which they followed in insuring property, in reference to the amoiml of insurance; and 2. Whether, assuming the value of the property in question to have been $1,800 and no more, with $600 already upon it, they would have put $1,200 more upon it. Held, that it was errorto reject the evidence.
APPEAL from tbe Circuit Court for Wvnnebago County.
Action upon a policy of insurance issued by tbe defendant) to recover for tbe loss by fire of a building in Oshkosh covered by tbe policy. It appears from tbe pleadings and proofs, that on June 27, 1870, tbe defendant issued a policy for $1,200 on such building, for three years, to one Lines, who then owned tbe building. On the 26th of May, 1872, Lines procured another three-years policy on tbe same building for $600, from tbe Phoenix Insurance Company. The consent of that company to $1,200 additional insurance was indorsed on tbe policy. On tbe 5th of May, 1873, Lines sold the building to tbe plaintiff, assigned to her the Phoenix policy, and went to the office of Gary & Ilarmon, the agents in Oshkosh of the defendant company, for the purpose of assigning to her the other policy, being that issued by the defendant. That policy had so nearly expired that the agents thought best to return tbe unearned premium and issue a new policy on ¡the building. It was so done, and the policy in suit issued to tbe plaintiff. It bears date May 5, 1873, and by its terms! the defendant company insured: the plaintiff against loss of such building or damage thereto by fire, to the amount of $1,200, for three years from that date. Consent of the company to the insurance in tbe Phoenix is not written in tbe policy, but there is an indorsement thereon, placed there when the policy was issued, as follows: “ Present cash value of the property $1,800; no other insurance.” The insured building was totally destroyed by fire, April 28, 1875.
The following are the stipulations in tbe policy in suit, which are material to the determination of the case: j
“ If the assured shall have, or shall hereafter make,! any other insurance upon the property hereby insured, or any part thereof, without the consent of the company written herein, then and in every such case this policy shall be void.” “ The use of general terms, or anything less than a distinct, specific agreement clearly expressed and indorsed upon this policy, shall not be construed as a waiver of any printed or written restriction therein.” “ It is mutually understood and agreed by and between the company and assured, that this policy is made and accepted upon and with reference to the foregoing terms and conditions.”
On the trial, it was stipulated that the value of the building was §1,800. The question of fact litigated on the trial was, whether the agents of the defendants at Oshlcosh by whom the policy in suit was issued, had notice, when they issued the same, of the existence of the Phoenix policy on the same building. On this question the testimony was conflicting. Further reference to it will be found in the opinion. The circuit judge instructed the jury that if the agents knew of the additional insurance in the Phoenix when they issued the policy in suit, the plaintiff was entitled to recover; otherwise not. Several instructions based upon a different view of the law of the case were prayed on behalf of the defendant, and refused.
The jury found for the plaintiff, and assessed her damages at the amount of the policy. A motion for a new trial was denied, and judgment entered pursuant to the verdict; and the defendant appealed.
For the appellant, briefs were filed by Finch c& Barber as its attorneys, and Finches, Bynde & Miller, of counsel. The brief for the respondent is signed by Fsllcer c& Weisbrod. The cause was argued orally by Charles Ba/rber for the appellant, and C. W. Fellcer for the respondent.
For the appellant it was argued,
among other things, 1. That the court erred in rejecting the evidence offered to show the rule of the defendant company, observed by its agents at Oshkosh, in respect to the amount of risk which they take upon property. Thwrston v. Cornell, 38 N. Y., 281; Seymoivr v. Wilson, 14 id., 567; Sweet v. Tuttle, id., 465; Riclvmondville U. Sem. v. McDonald, 34 id., 379; Kerrains v. The People, 60 id., 228; Baynor v. Paige, 2 Hun, 652; Zewis v. Rogers, 34 N. Y. Sup. Ct., 75; Bank v. Kennedy, IT "Wall., 19. 2. That a contract of insurance is governed by the same principles as other contracts (May on Ins., 3); that, in the absence of any fraud or mistake, the policy e mbodies the contract {Jennings v. Insv/ranee Go., 2 Denio, 75; Chase v. Insurance Go., 20 N. Y., 52; Foot v. Insurance Go., 61 id., 576); and that, in respect to the provision of the policy in question relating to other insurance, the parties ought to be held bound by their own contract in writing, perfectly plain and free from ambiguity, and so easily complied with that a failure to have the assent of the company indorsed upon the policy in the case of any additional insurance to which its consent is desired, is gross negligence on the part of the assured. Such a clause in the policy is a wise and necessary one, and ought to be enforced by the courts. Carpenter v. Insu/rance Go., 16 Peters, 495; S. G., 4 How. (U. S.), 185; Forbes v. Insurance Go., 9 Cush., 471; Barrett v. Insurance Go., 7 id., 175; Lowell v. Insurance Go., 8 id., 129-133; Pen-dow v. Insura^ioe Go., 12 id., 471; Conway Tool Go. v. Ins. Go., id., 144; Hale v. Insurmice Co., 6 Gray, 173; Couch v. Insurance Go., 38 Conn., 184; Owens v. Insurance Go'., 56 N. Y., 565-570; JSolvrback v. Insurance Go., 62 id., 62; Switz-er v. Insu/rance Go., 6 Duer, 7; Foot v. Insurance Go., su/jyt'a; Eureka Ins. Go. v. JSobmson, 56 Pa. St., 256; Elliott v. Insurance Co., 66 id., 22; Stark Cotmty M. Ins. Go. v. Hurd, 19 Ohio, 176; American Ins. Go. v. Gilbert, 27 Mich., 429; Security Ins. Go. v. Fay, 22 id., 467; Van Burén v. Insurance .Co., 28 id., 398; Healey v. Insurance Go., 5 Nev., 268. ■3. That if the provisions of solemn written contracts are to be set aside at all in such cases, the courts ought at least to - permit it only upon clear and satisfactory proof of the fact that the agent of the insurer knew of the other insurance- — -such proof as would justify a court of equity in reforming the instrument as for a mistake therein; and that in this case the verdict was against the clear preponderence of evidence.
For the respondent it was. argued,
1. That an agent of an insurance company authorized to take risks and issue policies may waive a condition in a policy issued by him. May on Ins., §§ 143-4, and cases cited in the notes; 13 'Wall., 222, 233; Hotchkiss v. Insurance Cos., 5 Hun, 91; Planters’ Hut. Ins. Co. v. Lyons, 38 Tex., 253; Wünans v. Insurance Co., 38 "Wis., 342, and cases cited by the court; Heckler v. Insurconce Co., id., 665; Sherman v. Insurance Co., 39 id., 104. 2. That such waiver may be by express agreement in writing or parol, or it may be by the acts and conduct of the agent, and need not be founded on a new consideration. See the cases above cited, and also Viele v. Insurconce Co., 26 Iowa, 53-56; Viall v. Insurconce Co., 19 Barb., 446; Beal v. Insurance Co., 16 "Wis., 241; North Berwick Cotmty v. Insurance Co., 52 Me., 336; Batlibone <o. Insurance Co., 31 Conn., 193; Bevin v. Insurance Co., 23 id., 244; New York Central Ins. Co. V- Insurmce Co., 20 Barb., 468; Coit v. Insurconce Co., 25 id., 189; Buclibee v. Insurance ds Trust Co., 18 id., 541; Biddle v. Insurance Co., 29 N. Y., 184; Ames v. Insurance Co., 14 id., 253; Boehen v. Insurance Co., 35 id., 131; Frost v. Instorance Co., 5 Denio, 154; Insurance Co. v. Slockbovjer, 26 Pa. St., 199; Wing v. Kcorvey, 27 Eng. L. & E., 140. 3. That knowledge of the agent of a fact existing at the time insurance is effected, is knowledge of the insurers. May on Ins., § 371; People's Ins. Co. v. Spencer, 53 Pa. St., 353; Sherman v. Insurcmce Co., 39 Wis., 104. 4. That facts material to the risk made known to the agent before the policy issued, are constructively known to the company, and cannot be set up to defeat a recovery on the policy. May on Ins., § 132, and cases cited in note 5; Beal v. Insurconce Co., 16 Wis., 241; Kelley v. Insurance Co., 3 id., 254; Ames v. In-surconce Co., 14 N. Y., 253. 5. That in accordance with these principles, the company cannot defeat the policy by setting up the existence of other insurance upon the property, if the agent by whom the policy was issued knew of such other insurance and neglected to indorse upon the policy the consent of bis company thereto. May on Ins., §§ 370, 372, and cases cited in note 1 on p. 450; Iiowley v. Insurance Go., 36 N. Y., 550; Wash. Ins. Go. v. Davison, 30 McL, 91; Peoria Ins. Go. v. Dali, Beal v. Insurance Go., Mechler v. Insurance Go., and Planters’ Mut. Ins. Go. v. lyons, supra.

Opinion:
LyoN, J.
I. The first question which claims consideration is, whether the fact (as found by the jury) that the agents of the defendant by whom the policy in suit was issued,-had notice, when they issued, the same, of the previous insurance of $600 in the Phoenix Company, is a waiver of the condition that the policy shall be void unless the consent of the defendant to such previous insurance be written in it.
This question was elaborately argued, and a long array of authorities cited by counsel on either side to support their respective views. Rut it is unnecessary to comment on the cases; for the principle which must control the determination of the question is settled in this state by repeated adjudications of this court, by which we are bound. Gary & Harmon were the general agents at Oshkosh of the defendant company, and as such issued to the plaintiff the policy in suit. In Miner v. The Phœnix Ins. Co., 27 Wis., 693, the doctrine was asserted and applied to that case, that such agents " may waive any of the written or printed conditions of the policy, and bind the company by such waiver; and that their representations or statements made, or promise, assurance or verbal consent given, to the assured at the time of issuing the policy, or when acting within the scope of their agency and with knowledge of the facts constituting the breach, will, if confided in and relied upon by the assured, who is himself innocent and makes no misrepresentation or intentionally conceals nothing, amount to such waiver and estop the company from taking advantage of the condition waived." Many of the cases which sustain that doctrine are cited and commented upon by UixoN, C. J"., in this opinion. Miner v. The Phœnix Ins. Co. bas been followed, and the rule established hy it applied, in the following cases: Killips v. Putnam Ins. Co., 28 Wis., 472; McBride v. Republic Ins. Co., 30 id., 562; Devine v. Home Ins. Co., 32 id., 471; Parker v. Amazon Ins. Co., 34 id., 363; Webster v. Phœnix Ins. Co., 36 id., 67; Wright v. Hartford Ins. Co., id., 522; Winans v. Allemania Ins. Co., 38 id., 342; Mechler v. Phœnix Ins. Co., id., 665; Sherman v. Madison Mut. Ins. Co., 39 id., 104.
Unquestionably, the result of these decisions is, that if, when they issued the policy to the plaintiff, Gary & Harmon knew that there was another policy in the Phcenix Company on the same building, their failure to write the consent of the defendant thereto in the policy in suit will not defeat this action. By accepting the premium and issuing the policy with knowledge of the prior insurance, the defendant company is estopped to declare the policy void because its consent to such prior insurance is not written in the policy. See Webster v. Phœnix Ins. Co., supra.
It follows that the learned circuit judge gave the law of the case to the jury correctly.
II. The only other alleged errors which we find it necessary to consider relate to the rulings of the circuit judge on objections to the admission of certain testimony.
The question of fact as to whether Gary & Harmon knew of the insurance in the Phcenix Company when they issued the policy in suit, was the only one of importance litigated before the jury. The testimony upon it is conflicting. That of Mr. Lines, the grantor of the plaintiff, and of Mr. Boberts, her husband and agent, is to the effect that they informed Mr. Gary of the fact and showed him the Phosnix policy at the time or immediately before the policy was issued to the plaintiff. Mr. Gary, who issued the latter policy, denies knowledge of the existence of the Phcenix policy; and his clerk, who was present at the interview between Lines, Bob-erts and Gary, and who wrote the plaintiff's policy, testified that he heard nothing said at that time about the Phoenix policy. Mr. Harmon also denies knowledge of its existence before the plaintiffs policy was issued. The report of Gary & Iiarmon of the transaction, called a daily report, written by the clerk and signed by Gary in the name of the firm, was read in evidence. This report was made and forwarded to the defendant on the day the policy was issued. It is therein stated that there is no additional insurance on the property insured.
The following questions were put to Mr. Gary on behalf of the defendant, and objections thereto were sustained by the court: " Q. Is there any rule as to the Continental that you follow, when you insure a piece of property, with reference to the amount of insurance? Q. Assuming the value of the property to have been to your knowledge $1,800, and no more, with $600 insurance already upon it, would you have put $1,200 more upon it? "
If the answers to the questions might have tended " in any reasonable degree to establish the probability or improbability of the fact in controversy,'5 they should have been received. Per Davis, J., in Ins. Co. v. Weide, 11 Wall., 438. The rule which the agents followed in insuring property in the defendant company, in respect to the relative proportion between the value of the property and the risk, and what would have been their action in the present case on the hypotheses that the value of the insured building was $1,800, and that there was $600 insurance upon it, are, in a certain sense, parts of the res gestee. The rule and the extent to which it controlled the actions of the agents were existing facts, intimately related to the main fact in controversy. Had the witness answered that in all such cases they limited the risk to two-thirds the value of the property, less any other insurance upon it, and that had they known of the Phoenix policy they would not have taken a risk for more than $600 upon the plaintiff's.building, it seems to us that the testimony would tend to prove that the agents liad no knowledge of the Phoenix insurance when they took a risk of $1,200 on a building which they at the same time valued at $1,800. Ye think that such testimony would tend in a reasonable degree to establish the improbability of the disputed proposition of fact, to wit: that the agents had notice of the existence of the Phoenix policy. The testimony on that proposition was so nearly balanced that, had the rejected testimony been admitted, it might have changed the result. We think, therefore, that the offered testimony was material and relevant and should have been received. This view is sustained by some of the cases cited by the learned counsel for the defendant. See also 1 Greenl. on Ev., § 108.
JBecause of this error, the judgment of the circuit court must be reversed, and the cause remanded for a new trial.
By the Court. — So ordered.