The above entitled three civil actions were consolidated by consent, and tried together at July Special Term of HENDERSON, Justice, J. The actions were brought to recover for loss by fire upon policies of insurance issued by each of the above defendants, viz.: The National, 20 May, 1910, $5,000; The Dixie, 12 October, 1910, $3,000; and the Petersburg, 14 January, 1911, $3,000.
From the judgment rendered, the plaintiff Roper and each of the defendants appealed. PLAINTIFF'S APPEAL. The court below ruled that upon the entire evidence plaintiff was not entitled to recover of either of the defendants.
The three contracts are the standard policies established by the act of 1899, Revisal, secs. 4762, 4833. Each contains the following forfeiture clauses:
(1) This entire policy shall be void if the insured has concealed or misrepresented in writing, or otherwise, any material fact or circumstance concerning this insurance or the subject thereof; (2) or if the interest of the insured in the property be not truly stated herein; (3) this entire policy, unless otherwise provided by agreement indorsed hereon, or added hereto, shall be void if the insured now has or shall hereafter make or procure any contract of insurance, whether valid or not, on property covered in whole or in part by this policy; (4) or if the interest of the *Page 125 insured be other than unconditional and sole ownership; (5) or if the subject of insurance be a building on ground not owned by the insured in fee simple; (6) or if the subject of insurance be personal property, and be or become encumbered by a chattel mortgage; (7) or if any change, other than by the death of the insured, take place in the interest, title, or possession of the subject of insurance (except change of occupancy without increase of hazard), whether by legal process or judgment or by voluntary act of the insured, or otherwise.
The entire evidence shows that at the time of the loss the plaintiff had violated all of the above provisions of the policies, three of which, the fourth, fifth, and seventh, apply alike to all three policies.
On 15 October, 1910, after policies of the National and Dixie had been issued, the plaintiff Roper, individually and as executor of F. A. Roper, executed a deed of assignment, irrevocable, conveying all of the property insured to the plaintiff the Wanteska Trust and Banking Company to secure creditors, of which the trustee was one, and (155) empowering the trustee to sell and execute deeds in fee and apply the proceeds in payment of debts.
That this avoids the policies is too well settled to need discussion.Sossaman v. Insurance Co., 78 N.C. 147; Biggs v. Insurance Co., 88 N.C. 143;Hayes v. Insurance Co., 132 N.C. 702; Weddington v. Insurance Co.,141 N.C. 234; Modlin v. Insurance Co., 151 N.C. 41; Watson v. InsuranceCo., 159 N.C. 638.
The Dixie policy, 12 October, 1910, insured the hotel building for $1,000 and the furniture for $2,000. The plaintiff Roper, on 6 May, 1910, executed a deed in trust to W. A. Smith, for J. M. Stepp, conveying the furniture. This was also a violation of the sixth clause of the policy hereinbefore set out, viz.: "If the subject of insurance be personal property and be or become encumbered by a chattel mortgage." Weddington v.Insurance Co., supra.
As to the Petersburg policy, the undisputed facts are that at the date thereof, 14 January, 1911, the plaintiff Roper was not the owner of said property, and had no title thereto. Both he and the Wanteska Company knew that Roper had irrevocably assigned the property in fee to pay creditors, among whom was the Wanteska Company. This was a clear forfeiture under the second clause, to wit, "if the interest of the insured be not truly stated herein."
This policy, as well as the National, was also forfeited for violation of the concurrent insurance provision, viz.: "If the insured now has or shall hereafter make or procure any other contract of insurance, whether valid or not, on property covered in whole or in part by this policy." *Page 126
By reference to the Petersburg policy, it will be seen that only $8,000 concurrent insurance was allowed, whereas at the time of the fire there was $11,000 of insurance in effect.
This contract of insurance is further invalidated on account of the matters hereinbefore set out under specification one, as avoiding the policy, to wit: "If the insured has concealed or misrepresented in writing, or otherwise, any material fact or circumstance concerning this insurance or the subject thereof."
As will appear from the Petersburg policy, the amount of (156) concurrent insurance was concealed, as this was the last policy written. The amount of the total encumbrances upon the property was concealed, and, finally, the fact that the insured had no interest or title in the property, and that possession of same had been delivered to the Wanteska Trust and Banking Company, was concealed from the company.
Any one of the above specified acts is sufficient to prevent a recovery upon this contract.
To avoid the consequences of these acts, it is contended that there was a waiver of the forfeiture clauses of the policies, as they were issued by the Wanteska Trust Company, the agent of each of these defendants, and that the knowledge of their agent, although undisclosed to the defendants, will be imputed to them. It is admitted that the defendants had no other notice.
In our view, this position cannot be sustained, as there is no written waiver written upon or attached to the policy as required by the statute.
In the well-considered opinion of this Court by Mr. Justice Connor inBlack v. Insurance Co., 148 N.C. 169, it is held that, "The condition expressed in the statutory form of a fire insurance policy that `no officer, agent, or other representative of this Company shall have power to waive any provision or condition of this policy, etc., unless such waiver, if any, shall be written upon or attached hereto,' does not restrict the power of such officer, etc., to waive such condition, but establishes an invariable rule of evidence as to such waiver and renders parol evidence thereof inadmissible."
That this applies to general agents with power to bind the company (as defined in Grubbs v. Insurance Co., 108 N.C. 472), is expressly held in the Black case, for the opinion assumes that the agent who issued Black's policy was a general agent (page 172).
To the same effect is Quinlan v. Insurance Co., 133 N.Y. 356, in which it is held that it is immaterial whether the agent is a general or a special one, for the power of one may be limited as well as the other.
In our case the limitation is fixed by law and not by the parties. (157) It is prescribed by statute, and cannot be waived except in *Page 127 manner and form as therein prescribed. 13 Am. and Eng., 223. A wealth of authority is cited in the Black case, and we can add nothing to what is there so well said.
The Wanteska Company is a plaintiff in this action, and its interests have been, and are now, adverse to its principals. When it accepted the assignment of the property to secure its own and other debts, it was not acting for the defendants and not within the scope of its agency.
The rule that notice to an agent is notice to the principal, being based upon the presumption that the agent will transmit his knowledge to his principal, the rule fails when the circumstances are such as to raise a clear presumption that the agent will not perform this duty; and accordingly, where the agent is engaged in a transaction in which he is interested adversely to his principal, or is engaged in a scheme to defraud the latter, the principal is not charged with the knowledge of the agent acquired therein. 31 Cyc., p. 1595, and cases cited.
It was against the interest of the Wanteska Company to disclose these transactions to the defendants, as they would have canceled the policies at once.
This principle of imputed knowledge does not apply when it would be against the interest of the agent to make the disclosure. Stanford v.Grocery Co., 143 N.C. 420; Bank v. Burgwyn, 110 N.C. 267; Brite v.Penny, 157 N.C. 114.
As was said in Barnes v. Trenton Gas Light Co., 27 N. J., Eq., 33, "His interest is opposed to that of the corporation, and the presumption is not that he will communicate his knowledge of any secret infirmity of the title to the corporation, but that he will conceal it."
In the three cases consolidated the judgment of the Superior Court upon the plaintiff's appeal is affirmed. The plaintiffs will be taxed with the costs.
Affirmed.
The motion of plaintiff G. H. Valentine, trustee of Stepp, to dismiss the appeal and affirm the judgment as to him on the ground that the case on appeal was not served on him individually or on his (158) counsel, H. G. Ewart, is denied.
The record shows that the cases were consolidated by consent and that the plaintiffs and all the counsel made common cause in the prosecution. The case on appeal was duly served and made up.
Motion denied.
DEFENDANTS' APPEAL IN THE ABOVE CONSOLIDATED ACTIONS.