
    Clara M. Tilton, Plaintiff, v. The Farmers’ Insurance Company of the Town of Palatine, Defendant.
    (Supreme Court,
    Montgomery Trial Term,
    August, 1913.)
    Insurance (fire) — delivery of policy — issuance of policy with full knowledge of facts which would render it void in its inception — what constitutes waiver or estoppel as to forfeiture of insurance policy — retention by company of proofs of loss not a waiver of forfeiture.
    Where upon the delivery of a fire insurance policy to plaintiff which provided that it should be void in case the insured already had other insurance on the property “ not notified to the company,” or in case of insurance thereafter made should not with all reasonable diligence notify the company and have such insurance indorsed on the policy or otherwise acknowledged in writing, the property was not otherwise insured but thereafter additional insurance was obtained without notice to defendant and having the same indorsed on the policy issued by it, or otherwise acknowledged in writing, said policy though valid in its inception became invalid unless the provision as to additional insurance was waived by defendant, or unless it was estopped from insisting thereon.
    Where an insurance company issues a policy with full knowledge of facts which would render it void in its inception if the provisions thereof were insisted upon, it will be presumed that it by mistake omitted to express the fact in the policy, waived the provisions, or held itself estopped from setting them up, as a contrary inference would impute to it a fraudulent intent to deliver and receive pay for an invalid instrument.
    Where seventeen months elapsed before the additional insurance was obtained and twenty-two months before a fire, the company was not estopped from asserting the invalidity of its policy, even assuming that plaintiff asked defendant’s secretary to send with the policy a permit for additional insurance, to which he replied “ all right,” or that on being told ten days later of plaintiff’s intention to procure additional insurance made the same reply, as while notice to defendant of such insurance was shown the indorsement thereof on its policy or other written acknowledgment was necessary to make the consent of the secretary effective.
    Even if defendant’s secretary told plaintiff that it would be necessary to present her request for additional insurance to the board of directors, that was not an agreement to issue the permit.
    The holder of a policy of fire insurance is presumed to have contracted with reference to the conditions of the policy, and the limitation of the authority of the company’s secretary to» consent to additional insurance.
    Where plaintiff was a successful business woman fully able to comprehend and to protect her interests, and there was nothing to prevent her from reading her policy, it will be presumed that she was acquainted with its provisions as she was bound to take notice thereof. ,
    To constitute a waiver or an estoppel as to a forfeiture of an insurance policy, the insured must have been misled by some act of the insurer, or it must after knowledge of the breach have done something which could only be done by virtue of the policy, or have required something of the insured which she was bound to do only under a valid policy or have exercised a right which it had only by virtue of such a policy, but neither an estoppel nor a waiver can be inferred by mere silence or inaction.
    Where under defendant’s articles of association its secretary had no power or authority to adjust losses subsequent to a fire, and he on refusing to indorse on plaintiff’s policy a permit for additional insurance informed her that she had twenty days to get in the proofs of loss, that he did not think there would be any trouble but that there might be, there was no waiver of the forfeiture of the policy by plaintiff’s obtaining additional insurance without the consent of defendant as required by the policy.
    Plaintiff will be presumed to have had knowledge of the limitation of authority of defendant’s secretary as to adjustment of losses contained in the articles of association.
    The retention by the company of proofs of loss was not a waiver of the forfeiture, although it probably would have been a forfeiture of any irregularity in the proofs themselves.
    Action on a policy of fire insurance.
    Henry V. Borst, for plaintiff.
    Sitterly & Burtch (Charles S. Nisbet), for defendant.
   Whitmyer, J.

Defendant, a town co-operative fire insurance company, engaged in business in the town of Palatine, Montgomery county, in this state, on or about January 21,1909, delivered to plaintiff a fire insurance policy, dated October 15, 1908, insuring plaintiff’s buildings in said town against loss by fire in the sum of $3,550, for the period of five years from its date. It contained a provision that in case the assured should already have made any other insurance on the property, not notified to the company, or in case the assured, or the assigns of the assured, should thereafter make any other insurance on said property and should not with all reasonable diligence give notice thereof to the company and have the same indorsed on the policy or otherwise acknowledged in writing, the policy should cease and be of no effect. The property was not otherwise insured at this time. On May 31, 1910, plaintiff obtained $3,000 additional insurance thereon without giving notice thereof and having the same indorsed on the policy or otherwise acknowlédged in writing. The property was totally destroyed by fire October 31, 1910, and such notice had not been given and such indorsement or acknowledgment had not been made at that time.

The policy contains a provision which requires a person who has been insured, and has sustained loss or damag’e by fire, to give notice thereof to the secretary forthwith and within twenty days after loss to deliver a particular account thereof, or of the damage, signed by his own hand and verified by his oath or affirmation, with other particulars therein specified. Plaintiff’s husband notified defendant’s secretary of the fire two days thereafter and gave him a verified statement or inventory of the loss nineteen days thereafter. This did not comply with the policy, but was not returned. On March 10, 1911, he gave him proof of loss, substantially in proper form, and this was not returned.

Section 10 of defendant’s articles of association, written upon the face of the policy, provides that the directors shall, after receiving notice of any loss or damage sustained, and after ascertaining the same or after the rendition of any judgment therefor, apportion the same among the members thereof as therein set forth. Plaintiff was a member of the defendant company. Insurance, based upon application in writing, a promissory note for the assessments and subscribing the articles of association, were among the requirements for membership. The policy was issued by defendant’s secretary, John Sal'tsman, who was authorized to take applications, to issue policies and to consent to additional insurance. So far as appears, written application was not made for the policy in suit and the note required was not given. Saltsman had issued another policy upon the property October-15,1903, upon the same conditions, for the same period and in the same amount. Application in writing was made and a note was given at this time, but it does not appear that the articles were actually subscribed. Plaintiff and her husband claim that they asked for a permit for additional insurance when they made application for the first policy, but that Saltsman stated that it would be necessary to present the request to defendant’s board of directors, after which he would send the permit with the policy. Saltsman denies this. That policy did not contain a permit and plaintiff knew it. It expired October 15, 1908. Saltsman says that he was directed by plaintiff by telephone, just before this, to renew the policy upon the same terms and conditions, and that he then prepared the policy in question, procured the signature of the president, but did not send it until January 21, 1909. Plaintiff says that Saltsman came to her factory for candy December 22, 1908, and that her husband came in while he was there but did not recognize him, so that she introduced him. Her testimony of the conversation at this time is as follows: “ he (her husband) says, you are Mr. Saltsman and shook hands and spoke about the permit we did not get. Mr. Saltsman says, 6 your insurance has expired. I better make out a new one and send it down, the new one. ’ I told Mr. Salts-man I did not want to let it run out and I would let him have the candy for $1.25, which would go for the application. I says, ‘ send down the permit with the policy.’ He said, ‘.all right ’ and then he went out.” At the close of her cross-examination, however, she testifies that Saltsman said that he would have to' present the request to the board. Her husband confirms her testimony as to the reference by himself at this time to the permit in connection with the other policy, ánd then testifies, “ I said to him, ‘ I want that permit.’ He says, ‘ I cannot give it now. I will have to bring it before the board of directors.’ I says, ‘ do it.’ Then he said he would send down the policy he had renewed, he would send it down later. ’ ’ He also claims that he told Saltsman about ten days later, as he was passing him at a comer, that he was going to take out other insurance, and thinks that Saltsman said, “ all right.” Saltsman denies all of this, except that he was at the factory. Plaintiff also testifies that she asked Saltsman for a vacancy permit about six days before the fire and that he' told her it would be unnecessary. He says that she merely asked whether it would make any difference if the house was vacant while under repair, and that he answered that the company preferred to have it occupied, to which she replied that it would be for only a short time. That permit was not indorsed. She says that the policy was inclosed in an envelope and was lying on the seat of her wagon at the time. Saltsman says that he did not see it. She also says that the envelope was opened by her husband after the fire and that she did not see the policy until then. Her husband says that he saw the policy for the first time after the fire; that the envelope was open at the time and that he did not open it. One or two assessments were collected early in 1909, but none after the additional insurance was effected.

Plaintiff’s husband notified Saltsman of the loss two days after the fire and at the same time requested him to make the necessary indorsement for additional insurance, stating that he had overlooked the requirement as to other insurance, but Saltsman refused. He had 'the other policies with him and showed them to Saltsman, who did not know about them or about the additional insurance before this and told him 'that he ought to have given notice of them, to which he replied that he thought it was unnecessary, because no other company required it. He testifies that Saltsman then said to him, “ You have got twenty days to get in the proof of loss. I do not think there will be any trouble, there may be;” then, that he did not recollect that he said anything about making up the proof, only that one man had not sent his in, and, finally, that1 £ we should put in our proof of loss, he did not think there would be any trouble, but there might be.” Saltsman testifies that the proofs were not talked about very much and that all he said was that££ the rule was for twenty days after the fire.” The verified statement or inventory, referred to above, was delivered by plaintiff’s husband. He says that he asked Saltsman at that time to attend a meeting of the adjusters for the other companies and that Saltsman promised, but that he did not attend; that he then asked him by telephone to attend an adjourned meeting, and that Saltsman said he would try, but that he did not come, where: upon he telephoned again and Saltsman told him that the policy was void. Plaintiff then talked with Salts-man by telephone and he told her the same. She called upon him after this, in January, 1911, and asked him to call a special meeting of the board. He told her he could not and referred her to the president, A. V. Dockstader. She saw the president a little later and told him her mission. He replied that the policy had been considered void, whereupon plaintiff said that she thought he might possibly reconsider; that she had seen some of the directors and that they seemed to favor his calling a special meeting and permitting her to be present to explain. His answer was that he could not, because two meetings had already been held and that the board had concluded not to pay. However, her request was complied with, the meeting was held January 21, 1911, and plaintiff and her husband were invited by telephone. The latter appeared and asked the board what they wanted. The president said that the board did not want anything, but desired to know what he wanted. He said that the claim ought to be allowed. The president told him that the policy was • void, because of failure to obtain a permit, to which he replied that he had made two applications for one and that the secretary told him each time that it would be necessary to present the request to the board. At this time, failure to present proofs of loss, excessive insurance, and the claim, in effect, that the fire was of doubtful origin, were assigned as additional reasons for the refusal to pay. As to the proof of loss, plaintiff’s husband says that the president told him at that time that it was not a proof and was not sworn to, and that he then offered to make any correction desired, stating that the affidavit to it had been prepared by justice of the peace Dockstader (not the president), who had said that it was all right. There is no evidence that defendant requested anything and plaintiff’s husband left the meeting threatening suit.

This review, in detail as it is, has been made necessary because of the contradictions in the testimony, and because, under the motions of plaintiff and defendant at the close of the case, all questions are here for determination.

The additional insurance had not been procured when defendant’s policy was delivered, but was subsequently obtained, so that the policy was valid in its inception and became invalid because of the subsequent additional insurance without notice thereof to defendant and without indorsement thereof on the policy or without other acknowledgment in writing, as required by the policy (Gray v. Germania Fire Ins. Co., 155 N. Y. 184), unless the provision as to such insurance was waived by defendant or unless defendant is estopped from insisting upon it. Plaintiff claims that permission for additional insurance was a condition upon which it was agreed that the policy should be issued and that she had the right to rely upon the agreement, without examination of the policy, so that, having issued it knowingly without an indorsement and having thereafter collected assessments thereon, defendant is now estopped from insisting upon that provision.

It is well settled that where an insurance company issues a policy, with full knowledge of facts which would render it void in its inception if its provisions were insisted upon, it will be presumed that it by mistake omitted to express the fact in the policy, waived the provisions or held itself estopped from setting them up, as a contrary inference would impute to it a fraudulent intent to deliver and receive pay for an invalid instrument. Gray v. Germania Ins. Co., 155 N. Y. 184; Wood v. American Fire Ins. Co., 149 id. 382; Robbins v. Springfield F. & M. Ins. Co., 149 id. 477, 484. Plaintiff invokes this principle here. Of course, there would be no question about its applicability if the additional insurance had been in force, to defendant’s knowledge, at the time of the delivery by ■it of its policy. Defendant’s secretary had authority to consent to additional insurance. It could only be effected, without affecting the validity of the policy, by notice thereof and by indorsement on the policy or other acknowledgment in writing. Notice to the secretary was notice to the company, but the policy also required indorsement thereon or other acknowledgment in writing to make his consent effective. The conditions of the policy and the limitations tq the authority of the secretary appeared on the face of the policy. They were a part of the contract and plaintiff is presumed to have contracted with reference to them. Quinlan v. Providence W. Ins. Co., 133 N. Y. 265; Baumgartel v. Providence W. Ins. Co., 136 id. 552; Skinner, v. Norman, 18 App. Div. 616. The policy was issued without a new application and without a permit for additional insurance. It was delivered to plaintiff and remained in her custody thereafter without objection and without examination. Upon its delivery and acceptance, the contract of insurance was complete in all its terms and binding upon both parties. Plaintiff is a successful business woman, fully able to comprehend and protect her interests, and there was nothing to prevent her from reading the policy. She was bound to take notice of, and is not excused because she omitted to acquaint herself with, its provisions, and it'must be presumed that she was so acquainted. 1 May Ins. § 167; Quinlan v. Providence W. Ins. Co., supra; Baumgartel v. Providence W. Ins. Co., supra; Skinner v. Norman, supra. The policy, it is true, was in defendant’s possession from October 15, 1908, to January 21, 1909, but nothing was said or done to mislead her about its provisions or to induce her not to read or to prevent her from reading it after she obtained it Seventeen months elapsed before the additional insurance was obtained and twenty-two months before the fire occurred, and the policy could have been read by her and produced for indorsement at any time. The case is therefore distinguishable from Manchester v. Guardian Assurance Co., 151 N. Y. 90, upon which plaintiff relies. Under these circumstances there is no estoppel, even if it be assumed that plaintiff asked Saltsman, at the time of the meeting in thé factory, to send the permit down with the policy, and that he said, “ all right,” as plaintiff testified, or if it be assumed that plaintiff’s husband told Saltsman ten days after that meeting and before the delivery of the policy, of his intention to procure additional insurance and that Saltsman then also said “ all right.” And, if Saltsman told plaintiff that it would be necessary to present the request to the board, as plaintiff stated at the close of her cross-examination, and as her husband stated in each instance, that was not an agreement to issue the permit. However, the application for the first policy did not refer to additional insurance in any way and there was no written application for the one in suit. Plaintiff and her husband say that permission for additional insurance was asked for on each occasion. Saltsman says not. Neither policy gave permission. Plaintiff admits that she knew that the first one did not and says that she did not read the one in suit, because she supposed that it had been properly indorsed. The life of the first policy was five years and the one in suit had been in plaintiff’s possession for about seventeen months, when the additional insurance was effected. The fire occurred about five months after this and plaintiff’s husband then said, in effect, that the requirements as to additional insurance had been overlooked. The evidence shows that such was the fact.

There was a forfeiture and it remains to be determined whether defendant has waived or is estopped from claiming it. The circumstances and acts required to constitute a waiver or an estoppel are well established. In the absence of express waiver, some of the elements of an estoppel must exist. The insured must have been misled by some act of the insurer, or it must, after knowledge of the breach, have done, something which could only be done by virtue of the policy, or have required something of the assured, which he was bound to do only under a valid policy or have exercised a right which it had only by virtue of such a policy, but neither an estoppel nor a waiver can be inferred from mere silence or inaction. Gibson Electric Co. v. Liverpool, L. & G. Ins. Co., 159 N. Y. 426. There was no express waiver here, but it is claimed that defendant’s- secretary directed or requested plaintiff to present her proof of loss in time. This claim is based upon the testimony of plaintiff’s husband. He testified that Saltsman, when notified of the loss, said, You have got twenty days to get in the proof of loss. I do not think there will be any trouble, there may be.” He then testified that he did not recollect that Saltsman said anything about making up the proof, and, finally, in answer to a suggestive question, that he said, ‘ we should put in our proof of loss, he did not think there would be any trouble, but there might be.” His testimony is contradictory, but we will assume that Salts-man used the language last above set forth. The policy required that notice of loss be given forthwith to the secretary. It did not require service of proof of loss upon him and did not give him power or authority to adjust a loss. Under the articles of association, the power or authority to adjust was in the board of directors. These articles were written upon the face of the policy and plaintiff was a member of the company, so that it must be presumed that she had knowledge of the limitations to the power or authority of the secretary. Moreover, there is no evidence that the board gave him the power or authority to adjust in this case. In any event, the direction or request to present proof of loss, if made, was, at the most, only a qualified one and shows on its face that Saltsman did not intend thereby to. bind defendant, even if he had the power so to do. Plaintiff could not have been misled by it. Saltsman says that they did not talk about the proofs very much and that he said nothing more than that ‘1 the rule was for twenty days after the fire. ’ ’ That was simply a statement relating to a policy requirement and no direction or request can be inferred from it. Moreover, Saltsman had just refused the request of plaintiff’s husband to indorse permission for additional insurance on the policy, so that it seems improbable that he followed such refusal with a direction or request to present proof of loss in time. It seems to me that plaintiff’s husband is mistaken in his interpretation of what was said to him by Saltsman. The retention of.the verified statement or inventory, presented nineteen days after the fire, and proof of loss thereafter presented, do not operate as an estoppel. Plaintiff was not misled thereby. Her rights were lost before presentation and her position was not changed because defendant ignored- it. Perry v. Caledonian Ins. Co., 103 App. Div. 113. The irregularity in the statement or inventory would probably have been waived by such retention, if there had been no forfeiture, but the forfeiture itself was not waived thereby. The statement of Saltsman to plaintiff’s husband that he would attend or try to attend a meeting of the adjusters for the other companies, if it was made, does not affect the matter. He did not attend. And the meeting of the directors, subsequently held, to which plaintiff and her husband were invited, and which the latter attended, was held at the special request of plaintiff herself and nothing was said or done at that meeting to recognize the validity of the policy or to mislead plaintiff. Her husband left the meeting, threatening suit. The policy was declared void immediately after the fire, and was not recognized by defendant thereafter. Defendant did not request plaintiff to present proof of loss or to perform any other act under the policy, did not itself exercise any right thereunder and did not mislead plaintiff in any way.

The complaint must, therefore, be dismissed with costs.

Complaint dismissed, with costs.  