Court Opinion

ID: 9868137
Source: CourtListenerOpinion
Date Created: 2023-09-26 17:45:25.259954+00
Date Added: 2024-06-11T07:45:36.422025
License: Public Domain

IÍOKE, J.,
dissenting: While the conclusion reached by the Court on the specific question decided may not be in itself undesirable, I believe that the opinion proceeds upon a wrong *176principle and involves an erroneous construction of tbe stát-ute — a construction that may in many instances lead to un-looked-for and harmful results.
In the decision, as I understand it, the Court holds, and intends to hold, that there can be no waiver of any provision or requirement of the policy by any agent, general or special, unless the same is made in writing and attached to the policy or written thereon, because the Legislature by statute provided a standard form for fire insurance (Revisal, secs. 4759, 4760), and it appears therein as one of the stipulations that “no officer, agent or other representative of the company shall have power to waive,any provision or condition of the policy, except such as by the terms of the policy may be the subject of agreement endorsed thereon or added thereto; and as to such provisions and conditions no officer, agent or other representative of the company shall have such power or be deemed to have waived such provisions or conditions, unless, such waiver, if any, shall be written upon or attached thereto, nor shall any privilege or permission affecting the insurance under this polioy exist or be claimed by the insured unless so written or attached.”
The position maintained by the Court, it seems to me, would have more force if the statute establishing this form was exclusive in its terms, providing that no other than the form set out should be valid and binding, but this is not at all true. It is well known that, before the enactment of the statute by which this form was established, some insurance companies were accustomed to issue policies containing manifold stipulations and conditions, elaborate in statement and intricate in meaning, printed, too, usually in very fine type and being often obscure and at times contradictory. They were difficult to read and still more difficult to understand. As a matter of fact, we know they were usually not read in full, and, moreover, in case of loss these stipulations were not infrequently made the basis of unconscionable defenses, involving both *177delay and cost, and terminating at times in an entire loss — a result that was unjust and could ill be borne. While this form was enacted no doubt with the desire and intent to be just to both parties to these contracts, it was well understood to be the primary purpose of this statute to protect the insured from the untoward effects of these numerous and intricate stipulations to which I have referred.
The sections in question bear in terms upon the companies. “No fire insurance company shall issue fire insurance policies on property in this State other than those of the standard form.” And as a further indication that it was the companies, and not the insured, that were broug'ht within the effects and restrictions of the statute, it further enacts in express terms (section 4762) : “Any insurance company which shall cause to be issued, and any agent who shall make, issue or deliver a policy of fire insurance other than the standard form of fire insurance policy, in willful violation of this chapter, shall be punished as by law provided, but such policy shall nevertheless be binding upon the company issuing the same” This being the controlling purpose of the statute, and being only affirmative in terms, so far as the insured is concerned, it was never intended to impair or in any way affect the doctrine of waiver, as -established by numerous and well-considered decisions of this and other courts of recognized authority, notably, with us, Grabbs v. Insurance Co., 125 N. C., 389; Grubbs v. Insurance Co., 108 N. C., 472.
This whole doctrine of waiver proceeds on the idea that it contravenes the stipulations contained in the policy. Formerly the conditions and stipulations were much more extended, and provided frequently that no stipulation of the policy could be waived by an agent at all. This was a valid provision, as a rule, and yet the courts held that it could be waived by the company, acting through its general agents. As shown in the cases cited, supra, these general agents, when acting within the scop'e of their powers, are as the company *178itself, and, as they could make the contract, the statute not being, prohibitory, they could alter or waive any or all of its provisions.
It is said in the opinion that the statute does not, and does not intend to, destroy this doctrine of waiver or the principles upon which it rests, but only provides a method by which alone such waiver may be established; and in the argument the case was likened to the statute which requires certain contracts concerning land to be in writing. The fallacy of the argument consists in the assumption that the statute establishes the only way by which waiver can be established, and the reference to the statute on contracts will illustrate the distinction I am endeavoring to state. In the statute as to land the provision is exclusive in its terms — contracts concerning land of a certain kind are void tmless in writing. The statute on insurance says, in effect, to the companies: “If you place any stipulations in your contracts except those specified, you shall not take advantage of them, but any other contract of insurance you may make shall be binding on you.” Accordingly, it is very generally held that companies may bind themselves in an insurance contract by parol, and, as they may do this, so they may alter or waive any or all stipulations by conduct. These same courts, whose decisions are cited and relied on to the effect that, when a standard form of policy has been established no waiver of its terms can be had except by writing made thereon or attached thereto, also hold that, if at the time of taking out a policy the agent or company knows of the existence of other insurance, the company shall be estopped from avoiding the policy or evading its obligations under it. And yet this same standard form provides “that this entire policy, unless otherwise provided by agreement, endorsed thereon or added thereto, shall be void if the insured' now has or shall hereafter make or “procure any other contract of insurance on the property covered by this insurance.” Here is an express stipulation that the policy shall be void if there is *179any other insurance existing on the property at the time and. an agreement concerning it is not written on the policy itself.
If the standard policy is peremptory and exclusive, why does not it affect the one provision as well as the other ? It-is to be feared that these courts have inadvertently permitted themselves to indulge to a certain extent in judicial legislation, and have determined to uphold the provision in the one case because it seems reasonable and reject it in the other because it would result in a wrong. In Vance on Insurance will be found a very full reference to these standard policies and their effect upon the rights of the parties, and on the present question the author says: “In fact, while the purpose of the standard form is to insure the making of a contract that shall be fair for both parties, it is primarily intended for the benefit of the insured, and he will not be deprived by the operation of such laws of any rights which he might otherwise have taken under a contract. Therefore, it has been held that the doctrine of waiver and estoppel applies against the insurer and in favor of the insured in the case of contracts in the standard form as well as when the form of the contract is left wholly to the discretion of the parties.”
I am of opinion that the Legislature, in providing for a standard form of policy, only intended to forbid the companies from inserting any other stipulations in the contract than those contained in the former, and the statute was not intended to impair or in any way affect the principles and doctrine of waiver .and estoppel as recognized and established by the law, as it has heretofore been understood and acted on.