Court Opinion

ID: 8849001
Source: CourtListenerOpinion
Date Created: 2022-11-26 17:07:33.977052+00
Date Added: 2024-06-11T17:05:25.918747
License: Public Domain

CALDWELL, Circuit Judge
(dissenting). There was abundant evidence to go to the jury, and from which they might rightfully have found, that Eickhoif was an agent of the defendant, and clothed with authority to modify or extend the original contract of insurance, and that such a contract was in fact made. His agency is not denied in the answer, but, by necessary implication, admitted. In its answer the defendant says:
“And defendant states the truth and the fact to be that at some time in the month of February, 1892, the plaintiff did apply to the defendant for insurance upon two additional boilers to the seven boilers mentioned in said policy of insurance, and did request the defendant to add said two boilers to said seven boilers, and did request defendant to agree that said policy of insurance issued to It in the month of Mareh, 1891, should cover said two additional, as well as said original seven, boilers. ⅜ * ⅞”
The testimony shows that all the dealings in reference to this insurance business — those relating to the policy that was issued in 1891, as well as those relating to the supplementary or ancillary *362agreement for the insurance of the two additional boilers — were had between Mr. Green and Mr. Eickhoff. Mr. Green was asked:
“Q. Who did you have your dealings with about this matter of this application? A. Mr. Eickhoff. Q. Did you see anybody but Mr. Eickhoff about it? A. No, sir. Q. Did you ever have any [negotiations] with Mr. Gardner at all? A. None at all. Q. Did you ever see any other representative of this company, either in taking out this policy or putting in this auxiliary battery of boilers, except Eickhoff? A. No, sir. Q. How did you come to ask Eickhoff to come and inspect these boilers for you? A. Well, he was doing my insurance.”
There is not a word of testimony to the contrary of this in the record, but much more to the same effect. Reading the paragraph of the answer I have, quoted in the light of this evidence, it is perfectly clear that the application which the answer admits was made “to the defendant” to insure the two boilers was the application made to its agent Eickhoff, for Mr. Green testifies positively that no such application was ever made to any one else. But what ought to be conclusive on the question of Eicklioff’s agency and authority to make the contract, as well as the fact that he did make it, is the circumstance that, when the plaintiff’s evidence tended .strongly to establish both these facts, the defendant declined to put either Eickhoff or Gardner on the stand to deny them. Whether Mr. Eickhoff was an agent of the company to effect insurance, and whether he did insure these two boilers, were facts peculiarly within the knowledge of himself and Mr. Gardner. It is a well-settled rule of evidence that when the proof tends to fix a liability upon a party who has it in his power to offer evidence of all the facts as they existed, and rebut the inferences which the proof tends to establish, and he declines to offer such proof, the jury are at liberty to presume that the proof, if produced, instead of rebutting, would support, the inferences against him. Railway Co. v. Ellis, 4 C. C. A. 454, 54 Fed. 481. In Starkie on Evidence (volume 1, p. 54), it is said:
“The conduct of the party in omitting to produce that evidence- in elucidation of the subject-matter in dispute which is within his power, 'and which rests peculiarly within his own knowledge, frequently affords occasion- for presumptions against him, since it raises strong suspicion that such evidence, if adduced, would operate to his prejudice.”
This rule is applicable to criminal cases (Com. v. Webster, 5 Cush. 295, 316; People v. McWhorter, 4 Barb. 438), and it is difficult to perceive why it should not be applied to an insurance company.
The bill of exceptions shows that the precise ground upon which the case was taken from the jury by the circuit court was "that there was no evidence to show that Mr. Eickhoff, the defendant’s inspector, had any authority from the defendant to change or modify the policy of insurance sued on.” The case comes here upon an exception to that particular ruling, and that is the only question discussed by counsel for plaintiff in error. It is now well settled that, when a given state of facts is such that reasonable men may fairly differ upon the question, the determination of the matter is for the jury. It is only where it appears that all reasonable men would agree that the evidence was insufficient to warrant a verdict that the court is justified in withdrawing a case from the jury. Rail*363way Co. v. Ives, 144 U. S. 408, 417, 12 Sup. Ct. 679; Railway Co. v. Ellis, 4 C. C. A. 454, 54 Fed. 481. Upon this question of fact, one judge of this court holds that the evidence was sufficient to warrant the jury to find a verdict for the plaintiff, one that it was not, and one is in too much doubt to express an opinion. . When this is the attitude of the appellate court, the cause ought, plainly, to be sent back to be tried by that tribunal appointed by the constitution to try the facts.
The remaining question is, did the agent Eickhoff make the ancillary contract to insure the two boilers? It is well settled that, unless prohibited by. statute or other positive regulation, a valid contract of insurance can be made by parol (Insurance Co. v. Shaw, 94 U. S. 574), and that an ancillary agreement, such as was made in this case, is binding, without any written memorial of it, and that such an agreement is not within the statute of frauds (Insurance Co. v. Colt, 20 Wall. 560). Whether the majority of the court mean to be understood as asserting that no such contract was made, or that, though made, it was void by reason of a mutual mistake of the parties, is not very clear, from the opinion. The supposed mistake, as stated by a majority of the court, consisted in Mr. Green and Mr. Eickhoff agreeing “that, if nine boilers were so used that only seven were exposed to the steam pressure for two weeks, and then the two idle ones and four of those in use before were exposed to the same pressure for two weeks, and so on alternately, the risk of explosion would be no greater from the nine thus used than it would be from seven boilers constantly in use.” As I understand the proposition of the majority, it is that the risk of explosion of two boilers of equal size and strength, when one is used one week and the oilier the next week, and so on, alternating, through the year, is just as great as if both boilers were used at the same time continuously through the year. This proposition is original, in this case, with the majority of the court. It is not found in the pleadings, was not raised in the court below, and is not alluded to in the briefs of counsel. It is not sound. It ignores the wear and tear and gradual deterioration and weakening that result from constant use. It takes no account of a change in the atmospheric conditions, and of the fact that boilers frequently explode from causes which are unknown, and cannot be ascertained. It is undoubtedly true that the view of the majority of the court on this question never suggested itself to the minds of Mr. Green and Mr. Eickhoff, although the latter is a skilled boiler inspector. But, if the proposition be true, it was a mistake of fact, or rather a "want of that scientific knowledge possessed by the majority of the court, relating to a matter about which both parties had equal opportunities of knowing what the fact was; and, there being, confessedly, no fraud on the part of either, the validity of the contract is not affected by the mistake. The consideration for the ancillary contract was ample. Mr. Green set up the boilers, and- incurred a large expense which he would not have done but for the agreement and assurance of the agent Eickhoff that they were insured, and that he might rest easy on that subject. The contract for the an-*364ciliary insurance was completed after the written policy was issued. The written policy bears date March 8, 1891, and the supplementary agreement was made in February, 1892. The answer admits that “some time in the month of February, 1892, the plaintiff did apply to the defendant for insurance upon two additional boilers;” and there was abundant evidence to go to the jury that such insurance was effected. When Mr. Green called on Mr. Gardner' after the loss, the latter did not then pretend that Eickhoff did not have authority to make the contract, or that the contract was not in fact made, but his claim was that “he didn’t think he was liable for anything that happened there, because it wasn’t bgcked on the back pf the policy;” evidently laboring under the impression that the company was not bound by the contract, because it had not been reduced to -writing. The testimony in this case shows that Mr. Green is a very prudent and careful business man, and that he had no thought of putting up these boilers without first having them inspected and insured. He did everything that a prudent man could do to effect that object. He would not purchase the boilers until he knew the defendant would insure them, and for that reason he applied to Mr. Eickhoff, the defendant’s agent and inspector, to inspect them before he purchased thein. And it was only upon being assured by the defendant’s agent that the boilers were sound, and that if he purchased them the defendant would insure them, that he concluded the bargain for them. When they were set up, and before casing them with brick, he had them inspected by the defendant’s agent and inspector, with a view to insuring them; and after the inspection he was assured by the defendant’s agent, Mr. Eickhoff, over and over again, that they were insured, and he laid out money upon the faith of that assurance. When a loss occurred, payment was refused, not because Eickhoff was not an agent,- or that no contract had been made, but because the contract “wasn’t backed on the back of the policy;” and, when the company is sued, it sets up various other defenses, which are obviously afterthoughts. The contract .of insurance should be characterized by the utmost honesty and good faith on the part of the insurer and the insured. It is no uncommon thing for business men to place reliance in, and act upon, the verbal agreements and assurances of insurance agents. It sometimes occurs that it is inconvenient or impracticable to do ¡the business, at the time, in any other mode. The law does not require the evidence of the agent’s authority to be made a matter of record, and no man ever requires an insurance agent to show his power of attorney to act as such, before insuring with him. It has always been' supposed, and so all the courts' have held, that when a man assumed to act as an agent for an insurance company, received applications, delivered the policies, and received the premiums (and Eickhoff did all this), that was sufficient prima facie evidence of his agency. And certainly it ought to be, when neither he- nor any. other agent of the company dare take the stand and deny his agency. There is in this country to-day millions of dollars’ worth of property insured, and effectually insured, upon verbal contracts, such as was proved in this case. The doctrine of the ma*365jority of the court does not accord with the understanding and practice of the business community, and puts it in the power of insurance companies to adopt a standard of business integrity much below that which ought to characterize the dealings of reputable business men. The question as to whether such a contract was made is one for the jury to decide upon the evidence, and there was abundant evidence to entitle the plaintiff to go to the jury upon it. It has never been submitted to a jury. It was not passed upon by the circuit court, and has not been argued by counsel. For these reasons the judgment of the circuit court ought to be reversed, and a new trial directed. Not to do so is to deprive the plaintiff, wrongfully, of its constitutional right to have the facts of its case tried by a jury.