
    The Ohio Farmers' Insurance Company v. Titus.
    
      Fire insurance company cannot be deemed — To have waived condition, voiding the policy — If insured property be mortgaged— Unless by agreement thereunder — Because insurance agent ,had knowledge of mortgage — Law of knowledge of company, through agent — Result of disagreement between insured and insurer— As to amount of loss — Burden of proof as to waiver by company.
    
    1. An insurance company cannot be deemed to have waived a condition in a policy of fire insurance rendering it void “if the subject of insurance or any part thereof, or the real estate or any part thereof described in the application as that on which any building insured herein is situated now -is, or shall hereafter be incumbered by mortgage or otherwise,” unless by agreement endorsed thereon, or added thereto, simply because its agent had notice or knowledge of the existence of a mortgage incumbrance and received premiums, when an agreement as to such mortgage was not endorsed on the policy and where such policy also provided that “No officer, agent or adjuster or other representative shall have power to waive or alter any of the provisions or conditions of this policy, except such as by the terms of this policy are made subject of an agreement endorsed hereon or added hereto and as to such provisions or conditions, such waiver or alteration, if any, shall only be valid when actually endorsed hereon or added hereto by such officer, agent or adjuster; nor shall any permission or privilege affecting this insurance exist or be claimed by the insured unless so written, endorsed 'or attached.”
    2. The provisions of a policy of insurance that impose a duty on the insured, in the event of disagreement as to the amount of ' loss, to procure an award or ascertainment of the loss by appraisers do not constitute a condition precedent, unless there is a disagreement as to the amount of the loss, and when in a suit to recover under a policy the insured avers that there was 1 no disagreement as to the amount of the loss, and further avers , that he has performed all the conditions on his part to be performed, such provisions are not put in issue by a general' denial but to make them an issue and to place upon the insured 1 the burden.of proving a waiver of them, they should be pleaded by the insurer.
    (No. 11430
    Decided April 12, 1910.)
    Error to the Circuit Court of Clark county.
    The facts are stated in the opinion.
    
      Mr. Lee Elliott and Mr. 'Chase Stewart, for plaintiff in error.
    The policy was issued October 26, 1902, and at the time of the fire was within a few months of expiration, so that the plaintiff had had it in his possession nearly three years. Under the rule laid down by this court in Insurance Co. v. Hook, 62 Ohio St., 256, and applied to fire insurance policies in Insurance Co. v. Baldwin, 62 Ohio St., 368, the insured is conclusively presumed to know the contents of his policy. Both these cases sustain the further proposition that the agent could not verbally waive the conditions of the policy, when by its express terms, which the insured is conclusively presumed to know,- it is expressly provided that he shall not have the power to do so.
    In Assurance Co. v. Building Ass’n, 183 U. S., 308, the limitation on the agent’s authority was in precisely the language used in the policy under consideration.
    The averments in the plaintiff’s second cause of action that there had been no disagreement as to the amount of loss, were evidently intended to remove this part of the case from the rule laid down in Graham v. Insurance Co., 75 Ohio St., 374, making an appraisal, or an offer to appraise and a refusal by the insurer, a condition precedent to the right to sue.
    We submit that the averments of the petition that there had been no disagreement between the plaintiff and the insurer as to the. amount of the loss were disproved by the evidence offered by the plaintiff himself; that the plaintiff’s own case established the fact of disagreement and brought him within the rule of Graham v. Insurance Co., supra.
    
    The plaintiff’s third cause of action is on an alleged agreement by the defendant to. pay $2,178 in settlement of the loss on both policies. The only evidence offered in support of this averment that the defendant agreed to pay the above amount is the testimony of the plaintiff that Corry, the defendant’s soliciting agent in Springfield, told him the company would pay this amount, which was the footing of the proofs of loss, in a few days. There is no pretense that any other person or officer of the company ever knew or heard of any promise by Corry to pay.
    
      Messrs. Stafford & Arthur, for defendant in error.
    Did the insurance company hold out Wallace & Corry to the world, and people of this community, as authoized to act in the capacity in which they did? Mechem on Agency, Sections 84, 86; Abbott’s Trial Evidence (2 ed.), 590, 591; Insurance Co. v. McGookey, 33 Ohio St., 556.
    We contend that the said Wallace & Corry were, in so far as the rights of Titus are concerned, general agents for said insurance company and Titus had a right to rely upon their acts and conduct as that of general agents for said company in their dealings with him. Insurance agents are ordinarily held to be general agents of the company. Mechera on Agency, 931; Insurance Co. v. Bennett, 1 N. P., 73, 56 Ohio St., 749; Krumm v. Insurance Co., 40 Ohio St., 229; Machine Co. v. Insurance Co., 50 Ohio St., 549; Kinkead’s Instructions, Section 266; Insurance Co. v. Kukral et al., 7 C. C., 356, 31 W. L. B., 223; Mechem on Agency, Section 6; 22 Cyc., 1429; 19 Cyc., 781; Insurance Co. v. Brown, 24 C. C., 52, 68 Ohio St., 655.
    If the said Wallace & Corry were general agents for this company in this county, then we contend that they had power to waive this condition, or any other, of said policy. Insurance Co. v. Hock, 8 C. C., 341, 56 Ohio St., 735; Insurance Co. v. Kukral, 7 C. C., 356, 31 W. L. B., 223; Insurance Co. v. Maloney, 33 W. L. B., 147; Machine Co. v. Insurance Co., 50 Ohio St., 549; Insurance Co. v. Wilson, 70 Ohio St., 359; Insurance Co. v. Harvey, 72 Ohio St., 186.
    After the issuance of the policy, knowledge of the agent of any of the breaches of the policy, is imputed to the company. 19 Cyc., 809.
    The delivery of the policy waives the payment of the premium, and in this case it is not denied that the policy was delivered and also the additional insurance placed upon the same. Machine Co. v. Insurance Co., 50 Ohio St., 549; Richards on Insurance, Section 595; Insurance Co. v. Kelly, 24 Ohio St., 346; Johnson v. Insurance Co., 66 Ohio St., 13.
    There was a total loss of the entire property covered by both policies. Insurance Co. v. Fish Co., 14 C. C., 160, 61 Ohio St., 643.
    No controversy had arisen relative to the value or amount of the loss.
    The holdings of the supreme court by a long line of authorities at that time, were to the effect that before the arbitration clause would serve any company as a defense, it must have appeared that they demanded such arbitration. Graham v. Insurance Co., 75 Ohio St., 375; Insurance Co. v. Carnahan, 63 Ohio St., 269.
   By the Court.

Titus sued the insurance company to recover for an alleged loss by fire. The petition set forth three causes of action. The first to recover eight hundred dollars for loss of the barn on a policy for six hundred dollars, to which an addition of two hundred dollars was subsequently made. The second, to recover $1,378 for loss of contents on a policy insuring the- contents of the barn to the amount of $2,"400. The third averred that the defendant had adjusted the amount, of the loss and had agreed to pay $2,178 in settlement. The barn and contents were alleged to have been totally destroyed by a fire on July 11,-1905.

For answer, the defendant admitted the issuing of the policies and denied generally .the other allegations of the petition. For a second defense, it averred that by the terms of the policy of insurance, issued on the barn, the entire policy, unless otherwise provided- by agreement endorsed thereon or added thereto, was void, if the subject of insurance, or any part thereof, or the real estate, or.any part thereof, was, or should thereafter be incumbered by mortgage or otherwise. That it was further provided and agreed by the terms of the policy, between the insured and the company, that no officer, agent or adjuster or other representative should have power to waive or alter any of the provisions or conditions of the policy, except such as by the terms of the policy were made, the subject of agreement, endorsed thereon or added thereto, and as to such provision or conditions, such waiver or alteration, if any, should only 'be valid when actually endorsed thereon or added thereto by such officer, agent or adjuster; “nor shall any permission or- privilege affecting this insurance exist or be claimed by the insured unless so written, endorsed or attached.” It then averred that after the issuance of said policy, and before the time of the fire, the real estate on which the barn was situated was incumbered by a mortgage in the sum of four thousand dollars, without any agreement therefor being endorsed on,' or added to, the policy of insurance, in violation of the terms and conditions of the policy, and that thereby by its terms, the policy became and was at the time of the loss by fire wholly void and of no effect. Subsequently, by amendment, it averred that it was further provided and agreed by the terms of the policy on the building, that the entire policy should be void if the premium, or any note given therefor, should have been due and unpaid for thirty days at the time of the loss, and averred that the premium for the additional insurance had never been paid, whereby the policy became null and void.

The plaintiff replied admitting the incumbrance for four thousand dollars and that it was made without any agreement therefor being endorsed on the policy; but averred that on or about the date of the execution of the mortgage he had notified the company of the execution of the mortgage, the date thereof, to whom executed and the amount thereof, and that the company then' consented to the incumbrance and waived the condition of the policy pleaded in the answer, and averred that the company thereafter received additional premiums, and neglected to endorse the agreement to waive the provisions, as to incumbrance, on the policy, although opportunity had been given it to do so. The plaintiff also denied that it had not paid the premium.

During the trial the plaintiff was given leave to amend, at bar, the second cause of action, to conform to the proof by adding the following averment: “Plaintiff further says that the loss of said personal property insured by said policy was total, and an appraisement of same was impossible, and well known by said defendant to be so; that said defendant compan}^ never disputed the amount or value thereof, but that said amount and value of said loss was ascertained and determined by said defendant; and further that there has been no disagreement as to the amount of said loss between said plaintiff and defendant.” The amended answer was withdrawn and refiled. At the close of plaintiff’s evidence, the defendant moved the court to direct the jury to return a verdict for the defendant on the first cause of action, and at the close of all the evidence requested the court in its charge to so instruct the jury. The court overruled the motion and refused the request, and on request of plaintiff gave the jury, before argument, the following instruction, to which the defendant excepted: “If you find from the evidence that Wallace & Corry were the general agents for the defendant in this county, and that said'plaintiff notified said Wallace & Corry of the increase of his mortgage from $2,500 to $4,000 prior to the loss; and subsequent thereto and prior to any loss, the said defendant, with the knowledge of the existence of said mortgage, granted additional insurance on said barn, then I charge you that the granting of such additional insurance was a waiver■ on the part of said defendant of that condition in said policy, requiring the consent of the company to encumbrances on the property insured, subsequent to the issuance of the policy, to be endorsed on said policy in writing.”

The court in the general charge instructed the jury as follows, to which the defendant excepted: “If, therefore, you find from the testimony that at the time of the execution of the $4,000 mortgage that the plaintiff went to Wallace & Corry and advised them of the execution of a new mortgage for $4,000, and the cancellation of the old one for $2,500, and that Wallace & Corry advised the plaintiff that it would be all right to so execute the new mortgage for $4,000 and cancel the old one for $2,500, and if you further find from the evidence that Wallace & Corry were the general hgents of the defendant .in .this county, in the procuring of insurance, and had general authority to represent the defendant in the transaction of its business in this county, as an insurance company, such as by the filling out and issuing of policies, the making of contracts of insurance and the collection and handling of the moneys of the defendant, and the adjustment and payment of certain losses of the defendant, then these facts may be considered by you for the purpose of enabling you to determine whether or not Wallace & Corry had authority on behalf of the defendant to waive the provision of the said contract of insurance, in regard to the manner by which the agreement and consent of the defendant to the said incumbrance of $4,000 might be secured.

“If you find from the evidence that the defendant company, prior to the said loss, knew of the execution of this new mortgage for $4,000, and the cancellation of the old mortgage for $2,500, and with such knowledge acquiesced therein and recognized the validity of the said policy of insurance under such changed conditions, such as by accepting payment of premiums thereafter from the plaintiff, or by paying losses thereunder' to the plaintiff on said policy, then the defendants would be considered as having consented to such change in the incumbrance on said property and would be considered as having waived a strict compliance with the provisions of the policy as to the manner .in which its consent or agreement to such new incumbrance should be secured.

' “The burden, of showing the authority of Wallace & Corry to waive a strict compliance with the provisions of the policy in question is upon the plaintiff.”

The 'jury found for the plaintiff for $2,138.75, the plaintiff remitted five dollars and judgment was entered for $2,133.75, and on error ip the circuit court the judgment was affirmed.

The plaintiff in error contends that the court erred in not directing a verdict for the defendant on the first cause of action; that the plaintiff’s evidence tended to prove a disagreement as to the amount of the loss, and no appraisement or demand and refusal, and that, therefore, the second cause of action falls within the rule in Graham et al. v. The German American Insurance Company, 75 Ohio St., 374.

The contract of insurance stipulated that the policy, unless otherwise provided by agreement endorsed thereon, should be void if the real estate, or- any part thereof described in the application, should thereafter be incumbered by mortgage or otherwise. And further: “And no officer, agent or adjuster or other representative shall have power to waive or alter any .of the provisions or conditions of this policy, except such as by the terms of this policy are made the subject of agreement endorsed hereon or added hereto, and as to such provisions or conditions, such waiver or alteration, if any, shall only be valid when actually endorsed hereon or added hereto by such officer, agent or adjuster; nor shall any permission or privilege affecting this insurance exist or be claimed bjr the insured unless so written, endorsed or attached.”

The insured had the policy in his possession and is presumed to know its provisions. These provisions are valid, they are usually found in such contracts, and are considered necessary for the protection of the company. They cannot be waived by the agent, excepting in the manner stipulated in the policy, and would afford very little protection to the company if they could be. (Union Central Life Insurance Co. v. Hook, 62 Ohio St., 256; The Eureka Fire & Marine Insurance Co. et al. v. Baldwin, 62 Ohio St., 368; Northern Assurance Co. of London v. Grandview Building Association, 183 U. S., 308.) To avoid them it must be shown that the company waived them or is estopped to enforce them, and this cannot be done by proof of acts or representations of the agent, not brought to the knowledge of the company. There is no evidence in the record even tending to prove that the company knew of the additional incumbrance. The most that can be claimed for the evidence is, that it tended to prove knowledge on the part of the agents who issued the policy, and that these agents were general agents for the county. But it is not contended that these agents had any authority to make contracts not containing the provisions . already referred to, and the fact, if such was the fact, that they were general agents for the county did not affect the question. There was no evidence tending to prove that the company accepted premiums with knowledge of the additional incumbrance, and nothing to estop the company as to any matter in issue.

In Graham et al. v. The German American Insurance Co., 75 Ohio St., 374, it is held that a provision similar to the one in this case as to appraisement, is a condition precedent when there is a disagreement as to the amount of the loss; and that when there is a disagreement as to the amount of the loss, an appraisal is required by the terms of the contract, and in a suit on the policy the burden is on the insured to show performance. In the instant case the evidence tended to show that the company withheld the payment of the loss because of the receipt of an anonymous letter stating that the insured did not have any personal property in the barn and that he had set fire to the barn, and counsel for the company contend that this shows that the amount of the loss was in dispute. The plaintiff not only averred that there was no disagreement as to the amount of loss, but also the performance of all the conditions on his part to be performed. Section 5091, Revised Statutes, provides that, “In pleading the performance' of conditions precedent in a contract, it shall be sufficient to state that the party duly performed all the conditions on his part; and if such allegation be controverted, the party pleading must establish, on the trial, the facts showing such performance.” The provision as to appraisement is a condition precedent only when there has been a disagreement as to the amount of the loss, and in view of the statute, and the averments of the petition that there was no disagreement as to the amount of the loss, and that the plaintiff had performed all the conditions om his part to be performed, the defendant, in order to raise the issue and put the plaintiff to his proof as to performance of this condition, should have denied performance of all the conditions and should have pleaded specifically this provision of the policy.

The making of the additional incumbrance and the failure to endorse .being admitted, and there being no evidence tending to prove waiver by the company, the trial court should have directed a verdict for the company as to the first cause of action, and the judgment will be modified by deducting the amount of the loss of the building. •

Judgment modified.

Summers, C. J., Crew, Spear, Davis, Shauck and Price, JJ., concur.  