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Viele v. Germania Insurance Co.

Bevin v. Ins. Co., 23 Conn. 244; Viele v. Ins. Co., 19 Barb. 440; Ins. Co. v. Stockbower, 26 Penn. St. 199; Keenan v. Dubuque Ins. Co., 13 Iowa, 375; Buckbee v. Life Ins. Co., 18 Barb. 541; Ruse v. Life Ins. Co., 26 id. 556; Beal v. Park Ins. Co., 16 Wis. 241; Ins. Co. v. Rogers, 12 id. 337; Hough v. City Fire Ins. Co., 29 Conn. 10.

3. The appellant's position (viz., that the provision in the policy requiring a written consent, excludes evidence of a parol waiver) confounds fulfillment of the condition. with waiver of a breach of it. A written consent to increase of risk is not a waiver, but a strict fulfillment of the condition.

Unless there be an increase of risk without written consent, there is no breach, and no occasion for any waiver; nothing in fact to be waived. If a condition. absolutely prohibiting any increase of risk, saying nothing about written consent, could be waived by parol, so could the one now in question, the absence of written consent being simply a constituent element in the breach, and having nothing to do with the mode of waiver. Neither this nor any other written contract provides for the manner in which a breach of it may be waived. No breach is contemplated, under any circumstances, by the terms of the contract.

II. The instruction, that the acts of defendant's agent were binding on his principal, in the absence of limitations on his authority, known to the insured, was correct, because,

1. The agent in question was shown to have full powers to effect insurances, issue policies (being intrusted with blank ones already signed, to be filled up and issued by himself), fix rates of premium, give the consent of the insurers to increase of risk, change of occupation, or any thing else which required such consent, and to cancel

Viele v. Germania Insurance Co.

policies, on behalf of the insurers, in his discretion, for increase of risk or other cause.

The evidence to this effect was wholly uncontradicted, and though the agent was the principal witness for the defendant, there was no attempt to prove, either by him or otherwise, any limitation whatever of his authority, even between himself and his principal. He was the general agent of defendant, with full power to transact all their business growing out of insurances at the place of his agency. And any limitations of his authority must have been known to the insured in order to affect them. See on this point, Warner v. Peoria Insurance Co., 14 Wis. 318, 323; North Berwick Co. v. Insurance Co., 52 Me. 336; Post v. Etna Insurance Co., 43 Barb. 351; Sheldon v. Atlantic Ins. Co., 26 N. Y. 460, 465. See cases cited supra, under subdivision 2 of point I (most. of which were cases of waiver by agent), and also City of Davenport v. Peoria Insurance Co., 17 Iowa, 276; Keenan v. Insurance Co., 12 id. 126; Insurance Co. v. Johnson, 23 Penn. St. 72.

2. Notice to the agent of the facts constituting a breach, was notice to the insurers. Keenan v. Insurance Co., 12 Iowa, 126; McEwen v. Montgomery County Insurance Co., 5 Hill, 101; Peoria Insurance Co. v. Hall, 12 Mich. 202.

3. Insurance agency, as now carried on in this country, constitutes a distinct branch or department of business (like that of auctioneers, factors and others), and persons carrying it on will, as to third persons dealing with them bona fide, be clothed with all the powers usually exercised in it. The nature of the business and mode in which it is carried on, and the powers usually exercised in it, were proved by uncontradicted evidence on the trial, and should be taken notice of by the court without proof. It was shown that agents exercise a supervision over the

Viele v. Germania Insurance Co.

insured property during the term of insurance, as to its occupation, changes of risk, etc., and give instructions to the insured in respect to these matters, and that the foreign insurance companies so extensively carrying on business in this State, and deriving such immense revenues therefrom, deal with the insured parties through the local agents alone. There was no attempt to controvert this evidence. The power to waive objections to a particular occupation, involving an increase of risk, is necessarily involved in and incident to the exercise of the above powers. 1 Am. Lead. Cas. (3d ed.) 552; Sanford v. Handy, 23 Wend. 260, 266, opinion of NELSON, Ch. J.; Story on Agency, $$ 77, 106; Conover v. Mutual Ins. Co., 1 N. Y. 290.

4. The power to cancel at discretion, for increase of risk, confided to the agent, involves the power to deter mine whether or not there be an increase, and to decide to continue the policy; and, if the agent, in the exercise of such power, examines the insured premises to see. whether or not the risk has been increased, and then gives the insured to understand that it has not been, or (what amounts to the same thing) that the policy will be continued in force, this will, as matter of law, operate as a waiver of any actual increase of risk arising out of facts ascertained in such examination, and estop the insurers from setting up the same as a cause of forfeiture.

5. The power to give the written consent of the insurers to a change of occupation, involving a change in the risk, in the agent's discretion, involves the power to determine whether such consent is necessary, i. e. whether the change will increase the risk, and any recognition of the policy as subsisting, by the agent, after examination of the premises and full knowledge of the change of occupation, and its effect on the risk, relied on by the insured, amounts to a declaration that written consent is unneces

Viele v. Germania Insurance Co.

sary, and estops the insurers from afterward setting up absence as cause of forfeiture.

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6. Public policy and a due regard to the safety of our citizens require that, in respect to foreign insurance companies doing business in this State through local agents, a different rule should be established as respects the powers of the agent, from the one ordinarily prevailing between principal and agent. It is well known that the agent is the only party whom the insured deal with or knows in the transaction; confidence is reposed in him, and his instructions, especially in the matter of change of occupation or increase of risk, which is a matter of science and skill, and governed by special rules, known only to the initiated. The companies, as matter of fact, expect their agents to look after their interests and exercise a supervision over the property during the term of insurance. It is a matter of general usage, and no insured party ever dreams of asking to see the agent's commission or power of attorney, in order to ascertain whether he can safely deal with him. The contract is one “uberrimo fidei," especially on the side of the insured; and it is just to require that these companies, which, deriving their corporate existence from the legislation of a remote State, are enabled to assume a national character, and swell their coffers with immense revenues derived wholly from business done through their army of local agents, should take the burden along with the benefit, and be bound by the acts of their local agents, in respect to insurances effected through them respectively, in all respects as if done by the home corporation (which, indeed, can act only through an agent of some kind) itself. To this ground the decisions have been rapidly tending; and this is a fit occasion for this court to take the lead in the distinct enunciation of the principle. See Rowley v. Empire Ins. Co., 36 N. Y. 550; Warner v. Peoria Ins. Co., 14 Wis. 323; N. E.

Viele v. Germania Insurance Co.

Fire & Mar. Ins. Co. v. Schettler, 38 Ill. 166; Keenan v. Mo. State Mut. Ins. Co., 12 Iowa, 126; and other cases cited under point I, subdivision 2, and Conover v. Mut. Ins. Co., 1 N. Y. 290.

III. The verdict was right, on another ground of law, and facts not capable of being disputed. By the just and fair construction of the policy, the condition avoiding it on increase of risk without written consent, was intended to protect the insurers in cases where such increased risk was unknown to them until after a loss; while the clause giving them the right to cancel in case of increase of risk, protects them when they become aware of it before a loss. Hence, when the insurers are fully apprised of all the facts creating an increase of risk, especially when they examine the premises to ascertain if the risk has been increased, and fail to cancel, they cannot claim a forfeiture by reason of such increase. The election not to cancel, amounts to an election to continue in force, and is, as matter of law, a waiver of any breach of the other condition growing out of such increase.

The fact of knowledge by the company is expressly found by the jury, and there is no pretense of any attempt to cancel. Hence, the verdict is necessarily right.

IV. The evidence of the agent. Verder's directions to Skeel (one of the window shade manufacturers), as to the precautions he should take to avoid danger of fire, was properly received, and rests on the same ground precisely as Verder's similar directions, given to Camp (the other manufacturer), and the employees on the insured premises. It was not evidence of mere conversations or statements of facts made by the agent to third persons. It was an act done by the agent, as agent, in the discharge of his duties to the insurers. Skeel was the plaintiff's tenant of the insured premises, the character of whose occupation is claimed to constitute a breach of the policy.

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