GRUBBS v. INSURANCE CO

MERRIMON, C. J., dissented.

"5. Was the insurance in the Pelican Insurance Company, Liverpool, London and Globe Insurance Company, Virginia Fire and Marine Insurance Company, and in the Mt. Vernon Insurance Company made known to the defendant?"

The issues submitted, with the responses to each, were as follows:

1. "Did the defendant make the contract of insurance set out in the complaint? Answer: `Yes, by consent.'"

2. "What was the value of the goods destroyed by the fire? Answer: `$7,400.'"

3. "Did the plaintiff furnish to the defendant the proof of loss, in compliance with the conditions of the policy? Answer: `Yes.'"

4. "Did the plaintiff procure the additional subsequent insurance upon the insured property alleged in the answer? Answer: `Yes.'"

5. "Was the defendant's consent to such additional insurance, if any, endorsed on said policy? Answer: `No.'"

6. "Did defendant waive such written consent, if none was endorsed? Answer: `Yes.'"

7. "Did the plaintiff comply with the other conditions of the policy on their part? Answer: `Yes.'"

8. "Was said policy, after the fire, assigned to the plaintiff Hardy as alleged in the complaint? Answer: `Yes.'"

Judgment was rendered for plaintiffs. Defendants appealed.

(474) The other facts are sufficiently set out in the opinion.

AVERY, J., after stating the facts:

The defendant asked the court to instruct the jury that, upon consideration of all the evidence, there was no waiver of the condition of the policy, requiring the written consent of the defendant to be endorsed upon it provided the plaintiff should take out additional insurance in other companies. This request was equivalent to a demurrer to the whole of the evidence, it being admitted that additional insurance was taken out in other companies after the policy sued on was issued, without first securing the written endorsement of the defendant's consent upon it in accordance with the express requirement of one of its conditions.

If Dr. Ramsey, the agent with whom the plaintiff treated, was authorized to take fire-risks and issue policies, he was empowered to waive by parol a condition in a policy issued by him. Winans v. Ins. Co., 38 Wis. 342; Miner v. Ins. Co., 27 Wis. 693; Gore v. Ins. Co., 53 Wis. 108; Phoenix Ins. Co. v. Spiers, 87 Ky. 285; Kitchin v. Ins. Co., 57 Mich. 135; Ins. Co. v. Earle, 33 Mich. 143; Viele v. Ins. Co., 26 Iowa 63; Wood Fire Insurance, sec. 391; Sherman v. Ins. Co., 46 N.Y. 526; Fishbeck v. Ins. Co., 54 Cal. 422.

Where a general agent permits a subagent acting under his direction to receive premiums from, and to fill up and deliver policies to be insured, the acts of the subagent are regarded as the acts of the general agent. Ins. Co. v. Ruckman, 127 Ill. 365. The powers of an agent are prima facie coextensive with the apparent authority given him, and persons dealing with him may judge of their extent from the (475) nature of the business entrusted to his care. Wood on Insurance, sec. 500; Hornthal v. Ins. Co., 88 N.C. 71; Beall v. Ins. Co., 16 Wis. 241; Davenport v. Ins. Co., 17 Iowa 276.

Though the authorities are conflicting upon many questions that have arisen as to the powers of insurance agents generally to bind the companies for which they act, there is a growing tendency to abrogate rules laid down by some of the courts when the insured sought the principal officers of these corporations in the larger towns and asked the agents to forward applications for insurance, instead of waiting at their homes for agents sent to solicit their patronage and stimulated to active and persistent effort by their employers. We concur with the judge below in the opinion that if Dr. Ramsey was entrusted by the defendant (as he testified that he was) with the blank applications, and with its policies duly signed by its officers, and was authorized to take risks without consulting the company, to issue policies by simply signing his name as agent, to collect premiums and cancel policies, then he was empowered, as agent, to waive the condition that no additional insurance should be taken. In Ins. Co. v. Earle, supra, an agent, when asked about the taking of additional insurance, said, in substance, that it would make no difference, but, without saying it in so many words, left the inference that consent in writing was not necessary, and the court held that the agent had waived a condition in the policy similar to that in plaintiff's policy, and that the insurers could not avoid liability under the contract because additional insurance was subsequently taken in another company without asking for or securing the endorsement of its written consent on the original policy. See also Gore v. Ins. Co., supra. After testifying that he was permitted by the defendant to exercise all of the powers enumerated by the court in the foregoing instructions, Dr. Ramsey stated also that Grubbs did say to him that he would want further insurance, (476) and that he (Ramsey) replied that he thought Grubbs could get it if he wished; that he did not remember any more of the conversation on that subject. The witness Gay testified that Ramsey said to Grubbs, when asked about further insurance, that it was all right, so that he did not insure for more than three-fourths the value of the stock. Grubbs testified that he told Ramsey the exact amount of insurance that he proposed to place, and did take, in each of the other companies, which did not in the aggregate exceed three-fourths of the value of the property insured. So that the facts in our case would more naturally warrant the inference that the agent did not require his assent to be endorsed in writing on the policy than the evidence in the Michigan authority cited above, because Ramsey not only conveyed the idea that it would be all right to get additional insurance, but added the condition that the whole insurance should not in the aggregate exceed three-fourths of the value of the property insured, thereby excluding the inference that he would insist upon any other condition. But, even upon his own testimony, Ramsey was empowered to waive the endorsement, and if, after Grubbs notified him of the amount which he proposed to take, and did afterwards take, in each of the other companies, Ramsey, by his language, left Grubbs to infer that no objection would be made unless the aggregate amount of insurance in all of the companies should exceed three-fourths of the value of the insured property, and Grubbs did not exceed that limit; then, if Grubbs was induced to believe that the forfeiture would not be insisted on unless the limit in the amount of insurance should be transcended, and acted under that impression in effecting additional insurance, that condition of the policy would be considered as waived by the company. We think, therefore, that there was no error in the rulings of the judge below upon which the sixth, fourteenth, fifteenth, sixteenth and seventeenth exceptions are founded. It seems that some of the counsel abandoned, while other counsel insisted (477) upon, the exceptions numbered from one to eight inclusive, and so much of exception ten as referred to the refusal of the court to give special instructions asked by the defendant, and numbered seven. If, after a breach of the conditions of a policy, the insurers, with a knowledge of the facts constituting it, by their conduct led the insured to believe that they still recognize the validity of the policy and consider him as protected by it, and induce him under such impression to incur expense, they will be deemed to have waived the forfeiture, and will be estopped from setting it up as a defense. Viele v. Ins. Co., 26 Iowa 9, and ib., note, p. 68; The Oskosh Co. v. Ins. Co., 71 Wis. 454.

Where, with a knowledge of the facts constituting the alleged waiver, the insurer, after the insured property had been destroyed by fire, requires the insured to furnish invoice of goods destroyed, proofs of loss, or plans and specifications of the building burned, or to appear for examination, such acts of its adjuster amount to a concession that the forfeiture for failure to secure the endorsement of additional risks will not be insisted upon. Ins. Co. v. Kittle, 39 Mich. 51; Titus v. Ins. Co., 81 N.Y. 410; Conner v. Ins. Co., 53 Wis. 585; Webster v. Ins. Co., 26 Wis. 67. Where, after a fire, the adjuster of a company joins the agents of other companies in the effort to adjust the loss, requires the production of books for examination, and asks for invoices from the time the insured went into business, and, the invoices not being furnished because of their destruction by fire, then asks for duplicates, which the insured endeavored, by correspondence with creditors, to get, and objects to settling on the ground only that he cannot agree with the insured as to the amount of loss, and offers to pay for his company its proportion of the loss as estimated by him, the company represented by such adjuster is estopped from insisting upon a forfeiture by reason of the breach of any conditions in the policy in reference to taking additional insurance. Fishbeck v. Ins. Co., supra; Argall v. Ins. Co., 84 N.C. 353. See especially opinion of Cooley, J., in (478) Ins. Co. v. Kittle, supra.

The testimony admitted after objection, and constituting the ground of exceptions four, five and seven, will therefore appear at a glance to be competent, if our view of the law in reference to waiver by conduct subsequent to the loss, and inconsistent with the idea of insisting upon a forfeiture for failure to comply with the conditions set forth in the policy, be correct. It would follow also, from the principle laid down by us, that there was no error in so much of his Honor's charge as relates to the doctrine of waiver by the acts of the defendant's agents after the property was destroyed, and this applies to the thirteenth, eighteenth and nineteenth exceptions.

The defendant excepted to the refusal of the court to submit an issue involving the question whether the fact that plaintiff had obtained additional insurance in the other four companies was made known to the defendant before the fire occurred. It does not appear that the refusal of the court to allow the jury to answer such an issue, specifically, deprived the defendant of the opportunity to have presented to the jury any view of the law arising out of the testimony that was material to his defense, and there was, therefore, no error in the ruling complained of. McAdoo v. R. R., 105 N.C. 151; Emry v. R. R., 102 N.C. 209; Lineberger v. Tidwell, 104 N.C. 510; Bonds v. Smith, 106 N.C. 564. Indeed, it is apparent that, according to our view of the law governing this case, it is not material whether Primrose and Cowper, the president and adjuster of the defendant company, or the agent Ramsey had notice of the additional insurance before the loss, since it is not denied that they had actual notice after the fire, and when Cowper, according to the testimony, so acted as to waive the right of the company to insist upon a forfeiture of the policy. Besides, it seems that, in order to make (479) the issue tendered subserve the proposed purpose, it would be necessary now to amend it by interpolating the words "prior to the loss," and it is rather late to amend defective exceptions in this Court.

The ninth exception is stated in the record as follows:

"During the morning session of the court, and pending the argument of counsel, the court gave notice to counsel that no special instructions would be considered which were not presented at the convening of court for the afternoon session. Near the conclusion of the speech of Mr. Mason, who closed for the defendant, just at night, the defendant presented an additional special instruction, which was not considered for the reason that it was not presented in apt time. Upon the conclusion of the speech of Mr. Mason the court took a recess until after supper, when Mr. Burton closed for the plaintiff."

It was not error to refuse to consider written requests for instructions unless presented to the court at or before the close of the testimony. Marsh v. Richardson, 106 N.C. 548; Taylor v. Plummer, 105 N.C. 56; Powell v. R. R., 68 N.C. 395.

The eleventh exception is stated in the record as follows:

"There was evidence tending to support the eleventh and twelfth instructions asked by the defendant. The plaintiff's evidence tended to show that the cost of the goods with five per cent added for cost of transportation, amounted to $8,218.31, made up of the amount of inventory taken of 8 August, 1889, $5,852.71; and subsequent purchases show by his ledger account, and certain stocks of goods purchased from assignees, etc. (about $475 worth), $4,007.68, deducting the amount of sales from 8 August to the time of fire, $1,478.01 in cash sales, and $1,582.10 in credit sales, upon which there was an average profit of thirty per cent; that his purchases were upon thirty days and four months, and that a discount of from one to two per cent could have been obtained (480) by purchasing in cash; that the value was, at least, $7,400.

"The defendant's evidence tended to show that the value of the stock of goods did not exceed $3,500 or $4,000 at the time of the fire.

"His Honor charged the jury, on the second issue, that the measure of damages was the fair cash value of goods at the time and place of the fire, and recapitulated the evidence in extenso as to the respective contentions of the parties on the question of damages. The defendant excepted."

The rule laid down in this Court is substantially the same as that stated for the Court by Justice Reade in Fowler v. Ins. Co., 74 N.C. 89, and is expressed in almost identical language. In that case, as in ours, a stock of goods had been destroyed by fire, and the court held that "the measure of damages against the defendant is the market value of the goods (within the amount insured) at the time and place of the fire." His Honor substituted "fair cash value" for "market value." We can see no material difference between the words used in the opinion referred to and the language of the charge. This Court in that case cited May on Insurance, sec. 424, and the authority fully sustains the rule announced. Wood Insurance, sec. 445, says that one who takes out a policy on a stock of goods can recover "only such sum as the goods were actually worth at the time of the loss, not what they cost him, not necessarily what it would cost him to replace the goods, but the sum which the goods were worth when they were destroyed by the casualty insured against." The cost of the property in the market may be shown as one of the elements, but not the test, of its value when destroyed, and, on the other hand, it is competent for the insurer to prove that there was a deterioration in the value of the goods after the purchase and before the loss, which, if not resulting merely from temporary depression in the market, will tend to establish the value at the time of the fire. The damage depends upon the ascertainment of the amount for (481) which the property can be sold, and that in turn depends upon its actual value at the time and place of the fire. Wood on Insurance, p. 765, sec. 445; Ins. Co. v. Transportation Co., 12 Wall., 201. In Wynne v. Ins. Co., 71 N.C. 125, the Court construed the statement that the jury had found "the value of the stock on hand to be $2,600," to mean just the same as if they had found that "the damage on account of the destruction of the goods" was $2,600, thus indirectly giving sanction to the rule laid down by the judge below in this case.

In Bobbitt v. Ins. Co., 66 N.C. 70, the Court said, "the value of the tobacco was what it was worth then and there — what it would have sold for then and there" — and it would seem that there is no material difference between this rule and the charge of the judge that the "measure of damage was the fair cash value at the time and place of the fire." It is not material that the Court declared that the value of a staple, like tobacco, at any particular point might be determined as well in another way by ascertaining the price in the usual markets, and deducting stamp duty, the cost of transportation, and other usual and necessary expenses. But it was not in fact necessary to have passed upon the question of the quantum of damages in that case at all.

The fact that Mr. Johnson, who was a witness for the defendant, and who was present in the bar and aiding the defendant's counsel in the conduct of the case, was not examined to contradict the plaintiff Grubbs as to what occurred when he and Cowper came to adjust the loss, was a legitimate subject of comment, and it was not error to refuse to stop counsel from using the fact as an argument to show that the testimony of Grubbs should be believed.

We understand that the twelfth exception was abandoned. It was, at any rate, a waste of time to discuss it.

Upon a review of all the assignments of error, we think that there is not sufficient ground for a new trial.

(482) No error.