Court Opinion

ID: 4006565
Source: CourtListenerOpinion
Date Created: 2016-07-06 11:07:26.349359+00
Date Added: 2024-06-11T13:56:58.798796
License: Public Domain

The insured paid nothing for the policy and the insurer received nothing for it. The policy required the premium to be paid in advance, and denied the agent authority to waive the payment. It therefore seems to me that the contract of insurance was never completed.
The defense is based chiefly upon the following policy provisions: "* * * the weekly premium * * * shall at all times be paid in advance. * * * The terms of this policy cannot be changed or its conditions varied, except by a written agreement, signed by the President or Secretary of the Company. Therefore Agents (which term includes Superintendents and Assistant Superintendents) are not authorized and have no power to make, alter or discharge contracts." If a like agency restriction existed in any of the citations submitted in support of the position of the majority of the court, the restriction is not mentioned. Goodbar v. Ins. Co., 89 W. Va. 221,108 S.E. 896, cited by the majority, specifically states that the defendant therein did not contend its agent could not waive the policy provision requiring payment of the premium before delivery. See pp. 225-6 of 89 W. Va. The citation ofConservative Life Ins. Co. v. Condos, 24 Ohio App. 504,157 N.E. 306, by the majority, is particularly inadvertent. There, the insurance company had a special arrangement with its local agent whereby he could deliver a policy and be responsible himself to the company for the first premium whether collected or not. So that was a case of delivery by express authority, untinged by waiver. A fair summation of the holding of all the majority citations is that payment of the first premium being for insurer's benefit may be waived by "one having authority" to do so, and that waiver by such an one may be implied from unconditional delivery of the policy. Not a single citation holds that a valid waiver may be made by one to whom authority is denied by the policy, or that his delivery of the policy binds the insurer. Consequently, I cannot agree that the citations are fairly comparable to the case at bar or that the principles they apply are applicable here. I contend for a recognition *Page 416 
of what we said in Kincaid v. Equitable Life Assurance Society,116 W. Va. 672, 183 S.E. 40, 41, to-wit: "An insurance contract is to be construed according to its own terms. Such contracts vary; and judicial construction thereof must vary accordingly."
I submit deferentially that the reasons given by the majority for brushing aside the policy provisions are not well considered. The broadside that such provisions "in the very nature of things are for the purpose of governing conduct after the policy has come into the possession of the insured" is a random volley, because after the insured herein received the policy, she did not govern herself accordingly, and see that the agent, as her representative, paid the premium for her. The so-called "modern trend" as adopted by this court more than a generation ago, in Medley v. German Alliance Ins. Co., 55 W. Va. 342,47 S.E. 101, 2 Ann. Cas. 99, does not warrant the categorical statement in the majority opinion. Neither is the rule which produced the trend an arbitrary one. The rule was designed to do justice in cases of misplaced confidence on the part of the prospect and an ill-gotten premium on the part of the insurer. In other words, the rule would preclude the insurer from accepting a premium and at the same time, nullifying the policy. The justification of the rule is well stated in Wood v. American Ins. Co., 149 N.Y. 382, 44 N.E. 80,81, 52 Am. St. Rep. 733, listed by Couch as a trend case. "It is so obviously just that a party to a written contract should be precluded from defeating it by asserting conditions and stipulations contained in it which would prevent its inception, and which he knew, at the time he delivered it and accepted the benefits were contravened by the actual facts, that any statement of the reasons upon which the rule rests is no longer necessary. * * * To take the benefit of a contract, with full knowledge of all the facts, and attempt to defeat it, when called upon to perform, by asserting conditions relating to those facts, would be to claim that no contract was made, and thus operate as a fraud upon the party." Where are benefits accepted by the insurer in the case at *Page 417 
bar, I ask? Few, if any, cases in the trend actually go further than our Medley case, which held that restrictive conditions in a policy should not apply to inceptive representations between the agent and the prospect which the latter did not know and had no cause to expect would be inhibited by the policy. The core of that opinion, page 352, shows, however, that the rule applies (only) "when it appears that the agent has delivered it (the policy) and received the premium with full knowledge of the situation." In the case at bar, the agent neither received the premium nor made any inceptive representations inconsistent with the policy provisions. The prospect was not ignorant of the provision requiring a cash payment, as evidenced by her arrangement, prior to delivery, that the agent should personally pay the premium for her. Thus the rule to prevent an insurer from rendering nothing for something received has been misapplied by the majority to force the insurer to render something for nothing received.
Code 33-7-13, is not alchemic. I recognize that the state may regulate or forbid any contract which contravenes public policy. Atlantic Coast Line Rr. Co. v. Riverside Mills,219 U.S. 186, 202, 31 S. Ct. 164, 55 L. Ed. 167, 31 L.R.A. (N.S.) 7. But the authorities have not perverted that power to bind an insurer by acts beyond the scope of its agent's authority. Statutes similar to ours are said not to change the common law.Wood v. Fire Ins. Co., 126 Mass. 316, 319; Davis Lumber Co. v.Hartford Ins. Co., 95 Wis. 226, 70 N.W. 84, 86, 37 L.R.A. 131. Both of those decisions concur that "The statute relating to agents of insurance companies does not change the rule of the common law regulating the power of agents to bind their principals. * * * The statute cannot be construed so as to prevent the person who is agent for the insurer for some purposes, by virtue of the statute, from being the agent for the insured for other purposes. He may well be agent for each in matters which do not conflict." The instant policy, while forbidding waiver of its provisions by an agent, does not inhibit him from paying the premium himself and personally *Page 418 
crediting the insured. Consequently, there was no conflict between the agent's duty under the policy to the insurer and his duty under his alleged promise to the insured, and the statute does not apply.
If conditional delivery of a policy "tends to open the way to great uncertainty," that tendency must be slight, for the habit of delivering policies on approval, particularly fire insurance policies, is constant and lawful. Hartford Fire Ins. Co. v.Wilson, 187 U.S. 467, 474, 23 S. Ct. 189, 47 L. Ed. 261. Besides, there is no evidence that delivery of the instant policy produced any uncertainty in the mind of the insured. While she had no means available for the premium, she understood clearly that the delivery called for a cash payment which she undertook to have the agent personally make for her. Occasional credit to others, extended by the agent, not shown to have been reported to the defendant, should not bind it in this instance. An occasional act no more makes a custom, binding at law, than an occasional swallow makes a spring.
Irrespective of the facts, in Morgan v. American Cent. Ins.Co., 80 W. Va. 1, 92 S.E. 84, L.R.A. 1917D, 1049, here is what the court said: "The provision in the policy, prescribing the form of waiver of any of its conditions, is a reasonable one, and relates to a matter about which the parties had a right to contract. We cannot say the condition is immaterial, for it was no doubt inserted to avoid the uncertainty of parol evidence. To hold that the agent could violate such an express provision of the policy would be to enlarge his powers beyond those conferred by his principal in writing. * * * Before defendant will be estopped to rely upon the non-waiver provision of the contract it must have been guilty of some fraud, or done something whereby plaintiff was misled to her prejudice. Nothing of the kind appears in the record. Plaintiffwas bound to know the restriction in the policy upon the powerof the agent". Accord: Shamblen v. Modern Woodmen, 105 W. Va. 252,258, 142 S.E. 447; Northern Assurance Co. v.Building Ass'n., 183 U.S. 309, 361, 22 S. Ct. 133, 46 L. Ed. 213. *Page 419 
I have taken it to be unassailable law that an insurance company could, with "entire propriety", write into a policy such provisions as it deemed proper to safeguard itself, and in the absence of conduct misleading the insured, the courts would enforce the policy as written. Morgan v. American Cent. Ins.Co., supra; Russell v. Prudential Ins. Co., 176 N.Y. 178,68 N.E. 252; Smith v. Niagara Fire Ins. Co., 60 Vt. 682, 694,15 A. 353, 1 L.R.A. 216, 6 Am. St. Rep. 144; Iannerelli v.Kansas City Ins. Co., 114 W. Va. 88, 171 S.E. 748. In Russell
v. Prudential, supra, a restriction similar to the instant one was upheld, and delivery of the policy on credit even by a general agent of the insurer was declared "ineffective". Accord: Couch, Cyc. of Ins., sec. 522 (a); Lasch v. New YorkLife Ins. Co., 92 Misc. 190, 155 N.Y.S. 255; Penn. Ins. Co. v.Blount, 33 Ga. App. 642, 127 S.E. 892; Etenburn v. MetropolitanLife Ins. Co., 118 Okla. 55, 246 P. 383; Pottsville Ins. Co. v.Minnequa Springs Impr. Co., 100 Pa. 137; Wilkins v. State Ins.Co., 43 Minn. 177, 45 N.W. 1. The prospect's written application herein forewarned her of policy provisions. They are plain and she is charged with having read and understood them. As was said in Lasch v. Ins. Co., supra, 256, the legal effect of those provisions was that to bind the insurer, the insured must covenant with its president or secretary and not with its local agent. The insurer did all that should be expected to protect both itself and the insured from a personal promise of its agent. It was not informed of his alleged promise to the insured; and it did nothing and permitted nothing done upon which, in my opinion, ratification or estoppel can be based. Anomalous indeed seems a holding, which in the absence of fraud, awards a recovery to one upon an instrument whose plain terms deny him recovery. Catoir v.American Life Ins.  Trust Co., 33 N.J.L. 487.
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