Court Opinion

ID: 9868136
Source: CourtListenerOpinion
Date Created: 2023-09-26 17:45:25.256158+00
Date Added: 2024-06-11T07:45:36.420005
License: Public Domain

CoNNOR, J.,
after stating the facts: The principal question presented is whether parol evidence is admissible to show a waiver of the condition avoiding the policy by reason of taking the additional insurance 4 January, 1906. The condition expressed in the policy, that other insurance taken upon the property without the assent of the insurer would render the policy void, is valid and, unless waived, will be enforced. Sugg v. Insurance Co., 98 N. C., 143. The language of the contract is explicit and incapable of misunderstanding, leaving no room for construction. Assuming, for the purpose of the argument, that the agent who issued the policy comes *172within the definition of a general agent, with power to bind the company in respect to the policy issued by him, as held in Grubbs v. Insurance Co., 108 N. C., 472, the plaintiff is confronted with the express provision in the face of the policy, the form of which is prescribed by the statute, that no officer, agent or representative of the company shall have power to waive any provision or condition except such as by the terms of the agreement is “endorsed hereon or added hereto,” and as to these no officer, agent, etc., shall have such power or be deemed or held to have waived such condition unless the waiver, if. any, shall be "written upon or attached hereto,” nor shall any privilege or permission exist or be claimed by the insured unless so written or attached. There can be no controversy regarding the meaning of these words. They are inserted in the policy, not by the company or by the plaintiff, but by the statute. To fail to give them force and effect is to nullify the statute. They are not intended to restrict the powers, express or implied, of general or local agents, but to prescribe an invariable rule of evidence by which their conduct must be proven to bind the company. Prior to the enactment of the statute much controversy arose as to the reasonableness of conditions or provisions inserted in policies. In many cases, by reason of the obscure language, manner and place of insertion and unfairness to the insured, the courts held them unreasonable and invalid. The conduct and language of agents, together with the extent of their power, rendered the rights and duties of the company and the insured uncertain and insecure. The courts, for the prevention of fraud and injustice, construed such provisions most strongly against the insurer, and, to'prevent forfeitures, were industrious to find waivers in the conduct and language of agents. This is apparent from the decided cases in our own and the reports of other courts. To avoid these controversies, frequently resulting in long and, to the insured, ruinous litigation, the Legislatures of this and other States enacted the *173“standard policy” and forbade the use of any other. Tire Legislature of this State in 1899 enacted a statute codifying’ the insurance law and adopting the “standard policy,” prescribing the size of type in which it shall be printed, etc. Eor issuing any other form of policy the company and its agents are made indictable. Sections 4762-4833, Revisa! The courts of other States in which this form of policy is prescribed have uniformly held that its terms and provisions are binding "upon the company and the insured. The question presented upon this appeal was decided in Quinlan v. Insurance Co., 133 N. Y., 356, Andrews, J., saying: “No principle is better settled in the law, nor is there any founded on more obvious justice, than that if a person dealing Avith an agent knoAvs that he is acting under a prescribed and limited authority and his act is outside of and transcends the authority conferred, the principal is not bound, and it is immaterial whether the agent is a general or special one, because a principal may limit the authority of one as well as the other.” Referring to the facts in that ease, he says: “The limitations upon the authority of IL were written on the face of the policy,” copying the language found in the “standard policy.” Again he says: “When a policy permits an agent to exercise a specified authority, but prescribes that the company shall not be bound unless the execution of the power shall be evidenced by a Avritten endorsement on the policy, the condition is of the essence of the authority, and the consent or act oí the agent not so endorsed is void.” This is a manifestly correct statement of the law. The learned Justice proceeds to point out the evils which the enactment of the standard policy Avas intended to avoid, saying: “The act providing for a uniform policy, knoAvn as the ‘standard policy,’ and Avliich makes its use compulsory upon insurance companies, marks a most important and useful advance in legislation relating to contracts of insurance.” Moore v. H. F. Insurance Co., 141 N. Y., 219. In Bourgeois v. National Insurance Co., 86 *174Wis., 606, Winslow, J., referring to the enactment requiring the use of the standard policy, says: “The act is broad and sweeping in its terms and scope. It brings order out of chaos. Prior to its passage there were as many contracts as there were companies. The variations and differences between the conditions of the policies issued by the various insurance companies were almost infinite in number; new clauses and conditions were being constantly inserted, generally ingeniously worded and obscurely inserted. To meet this condition the act under consideration was passed. That it is a long step in the right direction cannot be doubted. * * * The condition here broken was one of the conditions of the standard policy. It is claimed that it was waived, not in printing or writing, but by mere word of mouth. Can this be successfully maintained ? If so, then this part of the law is at once emasculated.” In Parker v. Rochester German Insurance Co., 162 Mass., 479, discussing an alleged waiver of a condition in a standard policy adopted by the General Assembly, it is said: “There is nothing to show that the agents had any authority to vary the standard form; but if they had it would seem probable that they could only do so by inserting provisions or attaching slips in the manner prescribed by the statute.” 'In Anderson v. Insurance Co., 28 L. R. A. (Minn.), 609, while the case was disposed of upon other grounds, the Chief Justice states clearly the principle which should govern the courts in dealing with the statutory standard policy: “Put in respect to the power of the parties to insert the provisions and conditions that are contained in the standard policy, and the binding effect of them, the act is conclusive, for it would be absurd to say that, while the same statute compels the use of a particular condition, the parties cannot or shall not bind themselves by it, but it may be nugatory.” “The conditions of the standard policy cannot be waived, except as provided therein and written or printed on the face of the policy.” 13 Am. and Eng. Enc., 223, citing *175a large number of cases. Tbe decisions appear to be uniform upon tbe point. In Assurance Co. v. Building Association, 183 U. S., 308, an exhaustive description, with a review of the authorities, is made by Mr. Justice Shiras. If the enforcement of this provision works injustice, the Legislature may change the law. As it is written, it is our province to enforce it. We have avoided any discussion of the extent and character of the authority of the agents of defendant, or what conduct will or will not operate as a waiver. We confine our decision to the language of the statutory policy, holding, with his Honor, that there was a breach of the condition in regard to subsequent insurance, and that the waiver can-be shown only in the manner contracted between the parties, as prescribed by the statute. The Legislature has, as a matter of public policy, restricted the freedom of contract and compelled the parties to contract in the exact language prescribed. While a contract of insurance may be made in parol, the statute will enter into and prescribe its forms — that is, the parol contract will be construed to be for a standard policy. If, listening to the suggestion of ‘‘hard cases,” said to be the “quicksands of the law,” we nullify the statute, we not only make a new and different contract for the parties, but make the law of none effect. The notice that the plaintiff intended to get other insurance in the future is not notice of existing insurance at the time the policy issued. The distinction is marked and radical. We do not think that it can be said that the agent of the company was acting as the agent of the plaintiff. This would make confusion worse confounded. Upon a careful review of the entire record we find no error. The judgment must be
Affirmed.