
    James B. O’Brien, Resp’t, v. The Prescott Ins. Co., App’lt.
    
      (Supreme Court, General Term, Third Department
    
    
      Filed July 7, 1890.)
    
    1. Insurance (fire) — Waiver of condition.
    An insurance policy not under seal, among other things, provided that it should be void if the building became vacant unless consent in writing was endorsed in writing upon the policy: it also provided that the company should not be bound by any statement made to or by any agent, not contained in the policy; also that no part of the express conditions could be waived except in writing signed by the secretary. The premises became vacant and plaintiff so informed the general agent in his town, and inquired how it would be in case of fire, to~which the agent replied that it was all right so long as plaintiff had notified him. Held, that this was a waiver of the conditions and that the general agent had power to do this.
    2. Same — Fraud.
    Where fraud in making an over estimate of the loss is provided for as a ground of forfeiture of a policy, such fraud must be wilful and intentional.
    3. Same — Assignment of policy.
    Where a policy did not declare that an assignment of it without the company’s consent should make it void, a paroi assignment by the insured to-plaintiff is sufficient.
    Appeal from judgment in favor of plaintiff, entered on the report of a referee.
    
      John TT. Gleason, (D. Cady Herrick, of counsel) for resp’t'; A. Sawyer, for app’lt.
   Mayham, J.

This is an appeal from a judgment entered upon the report of a referee in favor of the plaintiff for $1,147.48 and costs in an action upon a policy of insurance against loss and damage by fire.

The defense set up is that the assured violated the provisions of the policy, and that, therefore, the defendant is not liable.

The policy was issued on the 3d of January, 1882, for one year for $1,100 framed house, and one hundred dollars ($100) on ice box, benches, block and counters therein, and cash premium per year, $13.30-100, and was payable to Whitbeclc & Green, mortgagees, in case of loss, as their interest might appear.

The policy had been renewed from time to time until the time of the fire, December 28, 1885.

It was executed by the president and secretary of the company, not under seal, and countersigned at West Troy by J. H. Hulsapple, agent, and contained the provision that: “This policy shall become void unless consent in writing is endorsed by the company hereon in each of the following instances, viz.:”

Then follow numerous conditions, provisions and qualifications, among which are the following, which are claimed by the appellant to have been violated by the assured:

“ If any building herein described be or become vacant or unoccupied for the purposes indicated in this contract.
“ Where a fire has occurred injuring the property herein described, the assured shall use all practicable means to save and protect the same, and shall give immediate notice of the loss in writing to the company.
“ A particular statement of the loss shall be rendered to this company at its office within thirty days after the fire, signed and sworn to by the assured.”

Then follows in this article a very minute circumstantial statement in detail of the condition of the property, the cause of the fire, condition of the title and incumbrances, amount of loss, and many other facts, circumstances and conditions intended doubtless ■ to work a forfeiture of the policy if not performed. The policy also contained the following provisions: “Any fraud or attempt at fraud, or any misrepresentation in any statement touching the loss, or any false swearing on the part of the assured or his agents in any examination, or in the proof of loss or otherwise, shall cause a forfeiture of all claims to this company upon this policy.”

“And this company shall not be bound upon this policy by any act of or statement made to or by any agent or other person which is not contained in this policy, or in any written part above mentioned.”

At the conclusion of these numerous conditions the policy contains the following conditions or provisions:

“ This policy is made and accepted upon the above express conditions; no part whereof can be waived except in writing signed by the secretary.”

The defendant on this appeal insists that the plaintiff violated the provisions of the policy:

First. In allowing the insured building to remain vacant;

Second. In not giving timely notice of the loss according to the conditions of the policy.;

Third. In giving a false and exaggerated statement of the value of the building at the time of. the fire and of the extent of the loss.

Whatever may be said of the impolicy, not to say iniquity of the technical, and generally unread provisions- sometimes incorporated in insurance policies, by which the unwary policy holder is Lulled into a false security and induced to pay premiums exacted from time to time, only to be aroused from his delusions on the happening of a loss, by notification that he has violated some, to him unknown, provisions of the policy by which his claim for indemnity is forfeited; still in an action upon the policy it is the duty of the court to regard the letter of the bond and enforce it, like any other contract, according to its terms and provisions, applying to it the same rule of construction by which other contracts are interpreted.

The ■ first question then is, was the fact that the building was unoccupied at the time of the fire, and had been from the middle of the preceding November, without the written consent of the company or its agent, such a violation of the terms of this policy as to render it void ?

The referee finds that at the time of the fire the building was not occupied for the purposes indicated in the policy of insurance.

That the policy contained no consent in writing endorsed thereon by the company or its agent that such building should remain vacant or unoccupied, and that no written consent of any kind was ever given by the company or its agent that such building might be vacant or unoccupied.

The referee also finds that in November the son and agent of the assured notified John Hulsapple, the local agent of the defendant at West Troy, that the building insured was vacant, and inquired how it would be in case of fire, and that Hulsapple said that it was all right as long as he notified the agent, and he also finds that at the time Hulsapple was the general agent of the defendant at West Troy, and transacted the general business of the defendant.

On these facts, the plaintiff insists that Hulsapple had the power as between the company and the assured to waive any of the special conditions of the policy, and that by this declaration to the plaintiff’s agent he did effectually waivé the procuring of the written consent of the company, and thereby estopped the company from taking the objection that the consent of the company had not been endorsed in writing by the secretary on the policy.

In support of this position we are referred to the case of Pechner v. Phœnix Insurance Company, 65 N. Y., 195, where Dwight, Chief Justice, discusses elaborately the powers of general agents of insurance companies, as to their power to bind the company by their acts and declarations, and also as to their ability by paroi to waive a condition in writing, in a policy not under seal. One of the questions in that case was whether a general agent of the company could by paroi waive this condition in the policy: “If the insured shall have, ór shall hereafter make any other insu: anee on the property hereby insured, or any part thereof, wither the consent of the company written herein, then, and in ever such case, the policy shall be void.”

The agent issuing this policy resided in Elmira; afterward additional insurance was placed on the goods with the oral cor sent of the agent not written in the policy. A loss having ensue in the trial of an' action upon the policy, the above facts were substance proved, and the judge declined on motion by defend ant’s counsel, to direct a verdict for the defendant, and the jur found a verdict for the plaintiff.

The learned judge, in discussing the question raised by thes facts, uses this language: “ The whole contest is upon the validit; or invalidity of the contracts, and the sole point is, can a conditio: precedent be waived by words or acts of the parties ?

“ This is simply an inquiry whether a party can by his owl act be precluded from setting up á condition inconsistent with hi act to the injury of an opposite party, whom he has thu misled.”

The learned judge, after discussing the question at grea length, on page 207, sums up his conclusion as follows:

“ As a result of all the cases, and of sound principle, I think i clear that a condition required by a written instrument not unde seal, that an act be performed, or evidenced, may be waived h paroi, and that from necessity the acts going to establish th waiver may be shown by paroi evidence", and the learned judg follows this conclusion by this remark: “ There is every reaso: why this doctrine should be applied to insurance policies.”

In May on Insurance, § 143, the learned author, in discussing this question, uses this language: “ The tendency of the court is daily becoming more decided to hold that such agent ma> waive any of the conditions of the policy and bind the company by such waiver, and that his promises and acts, both of omissioi and commission, representations, statements and assurances mad< within the scope of his agency * * * may be set up bj

the insured, either on the ground of waiver or of estoppel ir answer to a claim of forfeiture.” In the case of Insurance Company v. Wilkinson, 13 Wall, U. S., 235, the court in discussing the power of a general agent of an insurance company,,acting at a distance from the home office, say: “ The powers of an agent are, prima facie, co-extensive with the business interest of the company intrusted to his care, and will not be narrowed by limitations not communicated to the person with whom he deals.”

In Steen v. Niagara Fire Insurance Co., 89 N. Y., 326, the ' policy contained a clause substantially like the one in this case in reference to the insured property becoming unoccupied, and on being applied to, the general agent wrote in the body of the policy a permit, but not in strict conformity to the terms of the policy, and on being applied to on the occasion of another vacancy, said it was all right, the company was held bound by his statement upon that subject

In Messelback v. Norman, as treasurer, etc., 46 Hun, 418; 11

N. Y. State Rep., 823, this court held that Bennett, who assumed ;o waive a condition in a policy, was not a general agent, and had lot therefore the power, but says, “ Had he been, he might have waived the condition,” citing Steen v. Insurance Company, 89 N. Y., 315. In this case it is difficult to conceive of a more general agency than was showed in Hulsapple. He issued polines, and adjusted losses, renewed policies, and seemed invested with authority at West Troy to do any act that the company jould have done themselves.

“ The power of such an agent must in the absence of such special restrictions be deemed to include the power to modify contracts made by him, dispense with conditions and do such acts from time to time as are necessary to prevent a forfeiture of policies as a consequence of change of ownership, situation or occupation of the insured property.”

“ Insurance companies organized under the laws of one state may, and often do, carry on business in other states. They cannot conduct their business except through agents, and it is a reasonable and just inference that agents entrusted with the power to make original contracts of insurance have also the power to modify them as occasion requires.” Walsh v. Hartford Fire Insurance Company, 73 N. Y., 9.

These remarks would seem to be peculiarly applicable to this case.

The defendant is a foreign company. Its business was conducted at West Troy, by Hulsapple as a general agent. Communication with the home office in Boston was inconvenient, and the general agent informed the agent of the assured unnecessary; even if the policy required the consent in writing of the secretary the assured had a right to assume on the assurance of the company through its general agént, that notice to him was all that was necessary, that the company would make the requisite consent through the secretary; any other construction would put it in the power of the company by the neglect or refusal of the secretary to act, to nullify the contract at pleasure, after the receipt of all the benefits by way of premiums. Notice therefore to the company by the assured was all that he could do towards procuring the consent, and when informed by the company that it was all that was necessary, he had a right to rely upon that information.

In this respect the case at bar differs from the Wahh case, 73 N. Y., 9, as in that case the endorsement was to be on the policy and by the presentation of the policy by the assured tó the agent the endorsement could have been procured.

The referee having found the facts according to the evidence of the plaintiff, we think he was right in his conclusion of law that the condition as to the vacancy of the building was waived.

The referee also found that by the declaration and assurance given by the agent Hulsapple to the assured and his agent, on being notified the next day after the fire of the loss, and his agreement to furnish the proof and statement that it would he all light, was a sufficient notice to the company and a waiver of strict compliance with the terms of the policy and giving written notic and proof of loss within thirty days, when taken in connection wit the acts of the company in making examination of the premise and making their estimates, by their experts and adjusters, th assured had a right to assume that the notice required had bee: given, and that the company had waived a strict technical com pliance with the language of the policy on that point.

In Goodwin v. Mass. Mut. Life Ins. Co.,73 N. Y.,480, it was hel< that where the statement of the agent of the company ha< caused the policyholder to delay in furnishing proof of loss, ¡ strict compliance with the policy as to time was waived. The cour says: “ The statement of the agent of the defendant was no daub the cause of the omission to present the proofs of the death of tin insured, and misled the plaintiff into the mistake, if it can be sc regarded, which is now urged as a defense.

“I think the act of the agent in this respect was not outside o: the limits of his authority.”

And after stating in a general way facts which showed that thi agent was in law a general agent of the defendant, the learned judge .adds: “The authorities are numerous which hold tha under such circumstances the acts of the agent bind the principal and that he has a perfect right to waive conditions of this descrip tian contained in a policy ” (citing numerous authorities).

The referee having found that there was a waiver upon this question by the company, and if we are right as to the power oi the agent, his finding was correct, and must be sustained upon this point.

The remaining question is, was there fraud practiced by the assured in the estimate of his loss ?

The policy provides that it shall be forfeited for fraud in the assured in reference to the same either before or after loss.

It is insisted by the defendant that the assured had been guilty of a fraudulent over-estimate of value in the proof of loss.

There were conflicting opinions by the witnesses at the trial as to the value, but we do not see anything in the estimate of value by the assured that would justify this court in reversing this judgment on the ground of fraud, especially as the referee upon this point had found the facts against the defendant. Fraud in this class of cases, as well as in others, must be proved and cannot be presumed, and it is well settled that the over-estimate must be wilful and intentional to defeat the claim of the assured on the ground of fraudulent over-estimate of value. Titus v. Glens Falls Ins. Co., 81 N. Y., 421.

The objection that the paroi assignment of the cause of action in this case is invalid, we think is not well founded, and as the policy does not declare that an assignment without the consent of the company renders the policy void, we see no reason why the plaintiff, if right upon the other questions, may not maintain an action on this policy. Marcus v. St Louis Ins. Co., 68 N. Y., 625.

Judgment affirmed, with costs.

Learned, P. J., and Lakdojst, J., concur.  