
    NORTH BRITISH & MERCANTILE INS. CO. v. LUCKY STRIKE OIL & GAS CO.
    No. 10734
    Opinion Filed May 30, 1922.
    (Syllabus.)
    1. Insurance — Fire Policy — Defenses — Change in Title of Property — Estoppel.
    Suit was brought on an insurance policy, which provided: “This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void * * * if any change * * * take place in the interest, title or possession of the subject of insurance * * * The insured had prior to the loss entered into an. executory contract of sale of the property insured, but retained possession thereof. Prior to the loss the agent of the insured submitted said contract of sale to the issuing agent of the insurance company and requested him to make such indorsement on the policy as he saw fit. The agent of the insurance company stated that it was unnecessary to make such indorsement, that the policy was all right. Held, that the insurance company waived the ¡forfeiture incurred by the execution of the contract of sale of the subject of insurance, and was estopped to plead such forfeiture.
    2. Same — “Waiver” of Forfeiture.
    Any act of an insurance company recognizing as an existing contract with it the policy of insurance sued upon, after knowledge that the cause of forfeiture has occurred, is a “waiver” of such cause of forfeiture.
    Error from District Court, Garvin County; F. B. Swank, Judge.
    Action by Lucky Strike Oil & Gas Company against North British & Mercantile Insurance Company. Judgment for plaintiff, and defendant brings error.
    Modified and affirmed.
    Albert L. McRill, for plaintiff in error.
    J. T. Blanton,' for defendant in error.
   NICHOLSON, J.

This action was commenced in the district court of Garvin county on the 21st day o,f January, 1915, by the Lucky Strike Oil & Gas Company, as plaintiff, against the North British & Mercantile Insurance Company, as defendant, to recover the sum of $1,000 upon a fire insurance policy issued by the defendant and covering one standard rig, derrick, belt, and attachments located in Carter county. Upon a trial judgment was rendered for the plaintiff, from which an appeal was by the defendant prosecuted to this court, and the judgment was reversed for ‘ the reason that plaintiff had failed to prove that proof of loss had been by it furnished to the defendant, or that such proof of loss had been waived; the opinion on that appeal being reported in North British & Merc. Ins. Co. v. Lucky Strike O. & G. Co., 70 Oklahoma, 173 Pac. 845. Upon a second trial a verdict was returned in favor of the plaintiff for the sum of $960, with interest thereon at the rate of six per cent, per annum from January 1, 1915, upon which judgment was entered, and the case is again brought to this court for review.

The question of proof of loss is not now presented, but the insurance company contends that the contract of insurance had been breached by the plaintiff; that the court erred in giving certain instructions to the jury; and that the verdict of the jury was excessive, unauthorized by and contrary to law.

In the answer of the defendant it is averred, as a second defense, that after the issuance of said policy and on or about the 23rd day of July, 1914, the subject of said insurance became incumbered by a chattel mortgage, made, executed, and delivered by the plaintiff to Limbocker Oil Company, which was not authorized by any indorsement upon said policy, and that said chattel mortgage incumbrance constituted a violation of the insurance contract sued upon and rendered the same wholly null and void; and as a third defense the defendant pleaded .that after the issuance of said policy a change, other than by the death of the insured, took place in the interest and title of the subject of said insurance by the voluntary act of the insured, in that the plaintiff sold, transferred, and conveyed to Limbocker Oil Company a certain interest in the subject-matter of such insurance by entering into a certain agreement in writing, a copy of which is set out in the answer, and that said change of interest and title in the subject-matter of said insurance violated the express terms of said insurance policy and rendered the same wholly null and void.

In its reply the plaintiff admitted the execution of the contract set out in the answer, and pleaded that immediately upon the execution of said contract the plaintiff, by its agent, J. H. Mathers, submitted said contract to the agent of the defendant issuing said policy of insurance, who was then the local agent of the defendant in Ardmore, and requested said defendant to make such indorsement upon said policy showing the execution of said contract as the agent might see fit, but that said agent at said time expressed it as his opinion to said Mathers that the execution and delivery of said contract did not require the .in-dorsement of the same upon said policy; that said agent expressed it as his opinion that said instrument was not a chattel mortgage, but was a mere contract, and that the policy did not require the fact of its execution to be indorsed thereon in order that said policy might remain in full force and effect; and further pleaded that said defendant is now estopped by reason of said conduct of its said agent, who was authorized to make suck indorsement, and wko declined to do so upon tke submission of all tke facts to kim, and tkat tke defendant kas waived tke provisions of said policy as to said contract and agreed tkat said instrument was not a ckattel mortgage, aud waived tke provisions of said policy requiring tke indorsement upon said policy of suck ckange in tke title of .tke plaintiff in said property; tkat tout for tke eon'duct of tke agent of said defendant upon said occasion tkis plaintiff would kave kad said indorsement made.

Tke policy of insurance on wkick tkis suit was brought is tke regular Oklahoma standard form, and tke provisions therein material on tkis appeal are as follows:

“Tkis entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void * * * if tke subject of insurance toe personal property and be or become incumbered by a ckattel mortgage. * * * ”
“Tkis entire policy, unless otherwise provided toy agreement indorsed hereon or added hereto, shall be void * * * if any change other than toy the death of an insured, fake place in tké interest, title or possession of tke subject of insurance (except ckange of occupants without increase of hazard) whether by legal process or judgment or by voluntary act of insured or otherwise.”

Tke contract entered into between tke plaintiff and tke Limbocker Oil Company, and referred to by the. defendant as both a chattel mortgage and contract of sale, is, in effect, an executory contract of sale, but in our opinion it is immaterial whether it be treated as a mortgage or a contract of sale, as. in either event its execution and delivery without tke consent of tke insurance company indorsed thereon would violate tke terms of the policy, unless tke insurance company by its act or tke acts of its agent waived tke indorsement required toy tke policy, and tkis brings us to tke consideration of the statements and acts of Mr. Jones, tke agent of tke defendant at Ardmore, and tke one wko issued tke policy to tke plaintiff, in regard to said contract.

J. H. Mathers, secretary and director of the plaintiff, testified, in substance, tkat Mr. Jones, a member of the firm of C. H. Clements & Company, solicited tke insurance and delivered the policy upon wkick tke action was brought, and tkat tke plaintiff paid tke premium thereon; tkat on or about the 23rd day of July, 1914, he kad a conversation with tke agent, Jones, in regard to the contract with tke Limbocker Oil Company; submitted said contract to Jones and, after stating tkat he could not remember tke exact language used, said:

“But tke substance of it was tkat I kad the contract there on tke desk and I showed it to Mr. Jones and we discussed whether or not it would be necessary to attack a copy of tkis contract .to tke insurance policy or to indorse permission to enter into tkis contract on tke insurance policy, and I advised him tkat I kad kad no experience in fire insurance. I kad never kad a loss and I didn’t know their technical rules. And Mr. Milburn and tke directors kad asked me to speak to kim about it, and he and I both agreed tkat it would not be necessary, and he then asked me where the policy of- insurance was and I told kim that Mr. Vaughn, wko was our treasurer, and Mr. Milburn, who was our secretary, kad tke policy at Pauls Valley at their office. And if it was necessary, I would send and get it if he wanted it to attack a copy of tkis contract to it with out indorsement. He said it was all right, but it was not necessary, but he said, ‘However, I will look into it and if I find tkat it is necessary I will let you know.’ Now tkat was the substance of tke conversation, tke best I remember it.”

From tkis evidence, wkick is undisputed, it clearly appears tkat tke plaintiff sought to comply with tke terms of tke policy and submitted the contract of sale to the issuing agent of tke defendant for the purpose of having.tke defendant make suck indorsement on tke policy as was necessary to preserve tke insurance, and tkat tke agent stated tkat suck indorsement was not necessary; tkat tke policy was all right; however, that he would look into the matter and if he found tkat an indorsement was necessary, he would so advise tke plaintiff.

It is obvious tkat tkis statement of tke agent kad a tendency to lead L.e plaintiff into tke'belief tkat tke policy would remain in full force and effect without suck indorsement, and tkat it was through tke fault of' tke agent tkat ■ tke indorsement was not made, and as the agent never afterward indicated to tke plaintiff tkat it was necessary tkat tke indorsement be made, it was but natural tkat tke plaintiff should believe tkat tke policy would remain in force. Tkis, in our opinion, constituted a waiver of tke cause of forfeiture, and tke defendant was estopped to. plead suck forfeiture when sued on tke policy.

Tke defendant insists tkat it has been established by tke decisions of tkis court tkat a policy writing agent at tke inception of tke contract may waive provisions of tke policy, but that an oral waiver cannot be made by the agent after the policy has been issued and delivered, for the reason that the assured is advised of the limitations of the power of the agent, as set forth in the contract of insurance. The provision in the policy as do limitations of the agent’s authority reads as follows:

“This policy is made and accepted subject to the forfegoing stipulations and conditions, together with such other provisions and agreements, or conditions as- may be indorsed hereon' or added hereto, and no officer, agent, or other representative of this company shall have power to waive any provision or condition of this policy except such as by tbe forms of this policy may be subject of agreement indorsed hereon or added hereto, and as to such provisions and conditions no officer, or agent or representative shall have such power or be deemed or held to have waived such provisions or conditions unless such waiver, if any, shall be written upon or attached hereto, nor shall any privilege or permission affecting the insurance under this policy exist or be claimed by the insured unless so written or attached.”

And defendant cites in support of this contention the case of Des Moines Insurance Co. v. Moon, 33 Okla. 437, 126 Pac. 755, wherein the court held:

“A provision of a policy of fire insurance executed in the Indian Territory before the admission of the state, which provided that ‘this entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void, * * * if the interest of the insured be other than unconditional and sole ownership, * * * ’ was not waived by reason of the fact that the agent, countersigning said policy, had knowledge at the time the policy was issued that the insured did not have unconditional and sole ownership, or by the act of the agent thereafter indorsing upon the policy a vacancy permit, where the policy provided that no officer, agent, or representative of the company shall have power to waive any provision or condition of the policy, unless such waiver, if any, shall be written upon or attached to the policy.”

But that case involved a policy issued in the Indian Territory before the admission of the state into the union, and this court held that it was bound to follow the rule announced by the Supreme Court of the United States in Northern Assurance Company of London v. Grand View Building Association, 183 U. S. 308, 46 L. Ed. 213. However, in Western National Insurance Company v. Marsh, 34 Okla. 414, 125 Pac. 1094, this court refused to follow the rule of Northern Assurance Company of London v. Grand View Building Association in cases arising on contracts of insurance issued since the admission of the state, and as to such contracts adopted the rule supported by the great weight of authority of the state courts that where the issuing agent had authority to make the contract of insurance and authority to indorse thereon the consent of the company to the existence of other insurance, when he was advised of other insurance and had full knowledge thereof, and executed and delivered the contract and received the premium from the insured, the company was bound -by his knowledge and could not defeat recovery because of such other insurance. To the same effect is Insurance Company of North America v. Little, 34 Okla. 449, 125 Pac. 1098. While in the first case mentioned the agent had knowledge of other insurance, and in the other had knowledge of a chattel mortgage on the subject of insurance at the time the policy was issued, no good reason appears why the doctrine of these cases should not apply to the facts in the case at bar. The issuing agent had authority to indorse on said policy an agreement authorizing the contract between the plaintiff and the Lim-bocker Oil Company, and had this indorsement been made by him the validity of such insurance could not have been questioned, and when he was advised of said contract and was requested to make such indorsement but failed to do so because he considered such indorsement unnecessary and so notified the plaintiff, thereby recognizing as still existing the contract of insurance, the defendant is bound by his knowledge and conduct and should not be permitted ■ to question the validity of such policy on the ground that such indorsement in writing was not made. This is supported by the following: Springfield Fire & Marine Ins. Co. v. E. B. Cockrell Holding Co., 67 Okla.—, 169 Pac. 1060; Fidelity-Phenix Eire Ins. Co. v. School Dist. No. 62 of Jackson County, 70 Oklahoma, 174 Pac. 513; American Surety Company of New York v. Stinnett, 78 Okla. 31, 188 Pac. 1060; British American Assur. Co. v. Francisco (Tex. Civ. App.) 123 S. W. 1144.; Bank of Anderson v. Home Ins. Co. (Cal.) 111 Pac. 507; Liquid Carbonic Acid Mfg. Co. et al. v. Phoenix Ins. Co. (Iowa) 101 N. W. 749; Briefs on Laws of Insurance by Cooley, vol. 3, page 2514.

The instructions complained of fairly state the principles of law applicable to this case, and the court did not er,r in giving the same to the jury.

The verdict was for the sum of $960, with interest thereon from January 1, 1915. In St. Paul Fire & Marine Insurance Company v. Robison, 72 Oklahoma, 180 Pac. 702. it was held that interest cannot ^e -eeovered upon unliquidated damages where it is necessary for a judgment or verdict to be had in order to ascertain the amount of such damages. Counsel for defendant in error do not question the correctness of the rule there announced, but suggest that if the decision in that case is followed this court should modify the judgment by eliminating the item of interest up to the date of the judgment. This in effect is a confession of error, and without considering the correctness of the rule announced, we will follow counsel’s suggestion.

The judgment will therefore be modified by deducting interest on the damages allowed from January 1, 1915, to the date of the verdict, viz., January 16, 1919, and as so modified is affirmed.

KANE, JOHNSON, McNEILL, and ELT-ING, JJ., concur.  