Fishbeck v. Phenix Ins. Co.

California Supreme Court Jul 1, 1880 No. No. 6,468Published

Before: Department, Myrick

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Holding. An insurance company is bound by a policy despite a failure to note prior insurance on the document if the company's agent had knowledge of such insurance at the time of issuance or subsequently acted in a manner that waived the objection.

Issues

Whether an insurance policy is void for failure to note prior insurance when the insurer's agent had knowledge of such insurance at the time of issuance.
Whether an insurer is estopped from denying liability after its agent participated in loss adjustment and promised payment with full knowledge of the facts.

Disposition. affirmed

Quotations verified verbatim against the opinion

“if the agent knew of such former insurance, and the policy be issued, such knowledge of the agent is knowledge of the company, and the policy is valid.”

“there was an acceptance of the apportionment, and a tacit, if not actual, acquiescence in it; there was payment by the other companies of their proportion, and a promise by Swain of payment of the proportion of his companies.”

Synopsis

Insurance — Evidence — Res Gest/e. — An insurance was effected by the plaintiff with the defendant, through the medium of T., an insurance solicitor—the plaintiff, and the defendant’s agent, S., who issued the policy, not meeting in the transaction. Held, in an action upon the policy, that conversations of tlie. plaintiff with T., occurring in the course of the transaction, were admissible in evidence, not only because they were parts of the res gestee, but also because there was other evidence in the case, from which it might be inferred that T. had given to S. the information derived from those conversations.

Id.—Agency—Clause of Forfeiture.—The policy sued upon contained the provision, “ that if any other insurance had been or shall hereafter be made upon the said property, and not consented to by this company, in writing hereon, * * * this policy shall be null and void.” At the time of the insurance, there were other insurances upon the property, which were not noted upon the policy; but S., the defendant's agent, knew of these insurances. Held, that the knowledge of S. was the knowledge of the company, and that the policy was valid.

Id. — Estoppel in pais. — S., the defendant’s agent, joined with the other companies in adjusting the loss, and upon the adjustment promised to pay his companies’ proportion ; and, thereupon, the plaintiff settled with the other companies upon the basis of the adjustment. Held, that the defendant was estopped from denying its liability.

Id.—Rescission.—After the adjustment, S. paid back to the plaintiff the unearned part of the premium, but retained the portion thereof corresponding with the period from the issuance of the policy to the date of the loss. Held, that to avoid the policy on the ground of deception, it would have been necessary to return the whole premium.

Department No. 2, Myrick, J.: This is an action on a policy of insurance issued by defendant to insure a stock of goods of plaintiff. The defense was, that other insurance existed not noted on the policy, and of which defendant had no information. Plaintiff had judgment; defendant moved for a new trial, which was denied, and defendant appealed.

One Taylor, an insurance solicitor, solicited defendant to take insurance on his stock of goods. Plaintiff already had insurance to the amount of $12,500 ; namely, $5,000 in the Fireman’s [425]Fund, $5,000 in the Hamburg-Bremen, and $2,500 in the People’s. Taylor was informed of this insurance. Taylor went to B. B. Swain, agent for defendant and of the Manhattan Insurance Company, and obtained a policy of $2,500 from each of the last named companies. No indorsement of the prior insurance was noted on the policies issued by Swain. The two policies were issued, and Swain received the premiums at the agreed rates. Plaintiff and Swain did not meet in the transaction ; the business was negotiated through Taylor, who received his compensation from Swain by a percentage on the premium paid. The policies were dated January 18th, 1870.

The fire by which the goods were injured occurred September 26th-7th, 1870. On the next day plaintiff went to Swain and the agents of the other companies, and informed them of the loss. They all went to the place of the fire, and talked of the affair. Swain said to the plaintiff that “ the loss could not amount to much ; there are four of us; that it will be divided among four companies; that the loss would not he very heavy as there were four companies to share.” He also said: “ The companies will appoint an adjuster, and you will have to get one on your side.” Mr. Gfarniss was selected as adjuster, and on the 28th of September, 1870, made an adjustment, fixing the total loss at $7,687.48, and naming the insurance thus : “$5,000 in the Fireman’s Fund, of San Francisco; $5,000 in Hamburg-Bremen, of Hamburg ; $2,500 in Phenix, of Brooklyn, New York; $2,500 in Manhattan, of New York City. Apportionment: Fireman’s Fund insures 1-3, and pays $2,562.48; Hamburg-Bremen insures 1-3, and pays $2,562.48 ; Phenix insures 1-6, and pays $1,281.26; Manhattan insures 1-6, and pays $1,281.26; total, $7,687.48.” (The policy of the People’s Insurance Company had expired.) The policy in question contained a provision for appointment of appraisers to value the property in case of difference, but their award “ shall not determine any question as to the liability of this Company under this policy.”

Fishbeck v. Phenix Ins. Co.

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