Court Opinion

ID: 6832394
Source: CourtListenerOpinion
Date Created: 2022-07-23 19:56:32.202091+00
Date Added: 2024-06-11T16:04:36.074189
License: Public Domain

GILBERT, Circuit Judge
(dissenting). I am unable to agree to the proposition that Miura, at the time of his final negotiations with the general agent of the defendant, had not authority to represent the insured. It is true that he had then ceased to be the president of the Rosedale Vineyard Company, but he remained a stockholder therein, and as such he had an insurable interest. Seaman v. Enterprise Fire & Marine Ins. Co. (C. C.) 21 F. 778; Warren v. Davenport F. Ins. Co., 31 Iowa, 464, 7 Am. Rep. 160; Riggs v. Commercial Mut. Ins. Co., 25 N. E. 1058, 125 N. Y. 7, 10 L. R. A. 684, 21 Am. St. Rep. 716. He also had in his own right an insurable interest in the household furniture, which was his personal property, and, as specified in the policy, was insured in the sum of $1,000. The Rosedale Vineyard Company, of which he was president, had an insurable interest in all the remainder of the property, by virtue of its possession under a contract for the *964purchase thereof. Milwaukee Mechanics’ Ins. Co. v. B. S. Rhea & Son, 123 F. 9, 60 C. C. A. 103; Phenix Insurance Co. v. Kerr, 129 F. 723, 64 C. C. A. 251, 66 L. R. A. 569; Alliance Ins. Co. v. Enders (C. C. A.) 293 F. 485; Dupuy v. Delaware Ins. Co. (C. C.) 63 F. 680.
Miura also had the possession and custody of the property, and was responsible for it, and for that reason could take insurance in his own name. 26 C. J. 25; Sturm v. Atlantic Mut. Ins. Co., 63 N. Y. 77; Fire Ins. Ass’n of England v. Merchants’ & Miners’ Trans. Co., 7 A. 905, 66 Md. 339, 59 Am.. Rep. 162. “One having the care, custody, or possession of property for another, without liability and without any pecuniary interest therein, may nevertheless obtain insurance upon such property" for the benefit of the owner, and the insurance will so inure upon a subsequent adoption of an insurance, even upon the happening of a loss.” 26 C. J. 26. In brief, Miura, in his dealings with the defendant’s general agent, represented all interests in the insured property.
The breach of a condition that the insured owns in fee simple the ground on which the insured property stands is not always a defense to an action on the policy. The law of California, by which this contract is to be construed, is declared in McCullough v. Home Ins. Co., 102 P. 814, 155 Cal. 659, 18 Ann. Cas. 862: “The clause of the policy providing that it shall he void, if the insured’s interest is other than sole and unconditional ownership, or the subject be a building on ground not owned by the insured in fee simple, is designed to remove from him the temptation to profit by the willful destruction of property not entirely owned by him. Imperial Fire Ins. Co. v. Dunham, 12 A. 668, 117 Pa. 460, 2 Am. St Rep. 686. ‘It therefore follows that the clause is in most' cases held to refer to the character and quality of the title — to the actual and substantial ownership, rather than to the strictly legal title.’ 2 Cooley, Ins., 1369. An equitable title in the insured is a sufficient compliance with th'e condition in question. A vendee in possession of property under a valid contract of purchase, which he is entitled to enforce specifically, is the holder of such equitable title. Id. 1376. And the great weight of authority supports the proposition that such vendee is the ‘sole and unconditional owner,’ within the meaning of the policy, even though a portion of .the purchase price may yet remain unpaid.”
■Nor can I agree that the final negotiations between.Miura and the general agent did not amount to a contract to insure. The fact that no such contract was pleaded is immaterial. The complaint is to be deemed- amended to conform to the proof, in pursuance of the permission of the court given upon the decision of the case. Nor do I see how it can be said that the claim of waiver or estoppel rests upon the fact alone that the defendant and its agent had notice of the true state of the title before the loss. There was more than mere silence and inaction on the part of the defendant. There was failure to cancel the policy, there was retention of the premium, and there was a promise to reform the policy to accord with the facts.
Fantz was a general agent of the defendant, authorized “to receive proposals” for insurance, “to fix rates oi; premiums, to receive moneys, and to countersign, issue, and renew policies of insurance, signed by the president and countersigned by the secretary of said company.” Fantz “agreed with and promised the said D. Miura that changes and indorsements would he made on said policy as so requested by him, so as to show said true condition and status of said insured property as it in fact existed.” A new consideration was not necessary to support the agreement between Miura and the agent. Viele v. Germania Ins. Co., 26 Iowa, 9. In Knarston v. Manhattan Life Ins. Co., 73 P. 740, 140 Cal. 57, the court held that an oral waiver of forfeiture is not required to rest upon a new consideration, or a new agreement, or even upon such acts or conduct as would create a technical estoppel. “An insurance company may waive any condition of a policy inserted therein for its benefit.” Insurance Co. v. Norton, 96 U. S. 234, 24 L. Ed. 689.
In Manchester v. Guardian Assurance Co., 45 N. E. 381, 151 N. Y. 88, 56 Am. St. Rep. 600, it was held that, if a general agent of a fire insurance company, who has authority to indorse, consents to a change of title, and makes an oral agreement to make the required indorsement, but fails, recovery may be had upon the policy. “If, after knowledge of all the facts, the conduct of an insurance company has been such as to reasonably imply a purpose not to insist upon a forfeiture of the policy of insurance, the law, leaning against forfeitures, will apply the peculiar doctrine of waiver, invented probably to prevent them, and will hold the insurer irrevocably hound as by an election to treat the contract as if no cause of forfeiture had occurred.” Washburn v. Union Central Life Ins. Co., 38 So. 1011, 143 Ala. 485.
In Neimeyer v. Claiborne, 112 S. W. 387, *96587 Ark. 72, the court expressed the rule in similar words and observed that the law of waiver cannot be abolished by contract. “The insurer is precluded from asserting a forfeiture where, after acquiring knowledge of the facts constituting a breach of the condition, it has retained the unearned portion of the premium, or has failed to return or tender' it back with a reasonable promptness.” 26 C. J. 325; Commercial Union Assur. Co. v. Schumaker, 119 N. E. 532, 71 Ind. App. 526; Harland v. Insurance Co., 180 S. W. 998, 192 Mo. App. 198; Reimold v. Farmers’ Mut. Fire Ins. Co., 127 N. W. 17, 162 Mich. 69; Ignazio v. Fire Ass’n of Philadelphia, 98 N. J. Law, 602, 121 A. 456; Terminal Ice Co. v. Security Ins. Co. (Mo. App.) 198 S. W. 1124; Commercial Life Ins. Co. v. Schroyer., 95 N. E. 1004, 176 Ind. 654, Ann. Cas. 1914A, 968; Haight v. Continental Ins. Co., 92 N. Y. 51; Staats v. Pioneer Ins. Ass’n, 104 P. 185, 55 Wash. 51; N. J. Rubber Co. v. Com. Union Assur. Co., 46 A. 777, 64 N. J. Law, 580.
Said Mr. Justice Bean in Schmurr v. State Insurance Co., 46 P. 363, 365, 30 Or. 29, 36, “The company itself, after being advised of the breach, retained the premium, and took no steps whatever toward the cancellation of the policy, and therefore waived the forfeiture.” In New York Life Ins. Co. v. Dumler (C. C. A.) 282 F. 969, the court said: “When the company was notified of the apparent invalidity of the policy, it had the right to avail itself of the defense, or to waive the defect and continue the insurance. Any recognition of the policy thereafter as valid would waive the right to invalidate it. Its continued holding of the first premium was a sufficient consideration.”
In Hanover Fire Ins. Co. v. Dallavo (C. C. A.) 274 F. 258, it was provided in the policy that it should be void if a building insured was on ground not owned in fee simple by the insured, or if he was not the unconditional and sole owner of the property insured. It was held that the provision was waived where the company, long prior to the loss, acquired actual knowledge that the insured property was on leased land, but retained the premiums and left the policies outstanding. In Mackintosh v. Agricultural Ins. Co., 89 P. 102, 150 Cal. 440, 448, 119 Am. St. Rep. 234, the court approved the rule expressed in 3 Cooley, Briefs on Insurance, p. 2658, that it will operate as a waiver of forfeiture, if an insurance company, with knowledge of facts vitiating a policy by its acts, declarations, or dealings, “leads the insured to believe himself as protected by the policy.”
Miura paid for insurance. The defendant kept the money after full notice of the error in the original policy, and promised to correct the same. Surely its conduct and promises, under the circumstances, were sufficient to assure Miura that in the meantime the property was protected against loss, and sufficient to show a waiver by the defendant of any breach in the conditions of the policy. “Forfeitures are not favored in the law, and s’ " courts are always prompt to seize hold of any circumstances that indicate an election to waive a forfeiture.” Hartford Life Ins. Co. v. Unsell, 12 S. Ct. 671, 674, 144 U. S. 439, 449 (36 L. Ed. 496).
In the majority opinion certain decisions of this and other courts are cited to the effect that, where a policy is delivered and accepted, all parol negotiations are merged therein, and the contract cannot be modified by parol, and that mere knowledge on the part of the insurer of a breach of a condition of the policy is inadmissible to show a waiver, citing, among other cases, Assurance Co. v. Building Association, 22 S. Ct. 133, 183 U. S. 308, 46 L. Ed. 213, and Lumber Underwriters v. Rife, 35 S. Ct. 717, 237 U. S. 605, 59 L. Ed. 1140. I cannot see that the cases so cited are in point. It is to be admitted that waiver may not be predicated upon the insurer’s mere knowledge that the insured has committed a breach of warranty. Nor is the present case one in which it is sought to vary the terms of the policy by proof of parol negotiations contemporaneous with or prior to the written contract. On the contrary, the ease comes within the rule of American Fire Ins. Co. v. King Lumber Co., 39 S. Ct. 431, 250 U. S. 2, 13, 63 L. Ed. 810, where the court explained the purport of Lumber Underwriters v. Rife.
But, irrespective of the question of waiver, I submit that the negotiations between Miura and the agent constituted a valid oral contract, later to be -expressed in. writing. All the terms and conditions of the contract were agreed upon, and the defendant had received its premium in consideration thereof. There was nothing to indicate that the neg-otiations resulted only in a preliminary oral contract, to take effect in the future. In Eames v. Home Ins. Co., 94 U. S. 621, 24 L. Ed. 298, Mr. Justice Bradley said: “It is sufficient if one party proposes to be insured, and the other party agrees to insure, and the subject, the period, the amount, and the rate of insurance is ascertained or understood, and the premium paid, if demanded. *966It will be presumed that they contemplate suck form of policy, containing such conditions and limitations as are usual in such eases, or have been used before between tbe parties.” A ease in point is Western Assurance Co. v. McAlpin, 55 N. E. 119, 23 Ind. App. 220, 77 Am. St. Rep. 423, where, after the expiration of a policy, there was an oral contract to reinsure in the name of a new owner. The agent credited the insured with payment of the premium, and promised that he would attend to the matter. It was held that the insurance contract took effect from the date of that agreement, and not from the date of the issuance of the new policy.