Eagle Fire Co. v. Lewallen

Whitfield, J.,

(specially concurring). — The valid provisions of -an insurance policy are binding on the insured as well as the insurer unless the provisions are waived.

1

Insurance policies are not executed under seal and are not required by law to be in writing. Provisions printed in an insurance policy for the benefit of the insurance company may in general be waived by the company through its agents, since the policy is subject to the law of agency and other applicable laws. Even a provision that conditions printed in the policy shall not be waived except by agreement endorsed on the policy may itself be waived by the company through its agents, and such waiver may be implied by law from tire conduct *277of the agent acting within the apparent scope of his authority.

Where the conduct of an 'agent acting within his apparent authority is such as to estop the principal from claiming the benefit of a provision of a written instrument, such estoppel is not a varying of the written instrument by parol, nor is it an abridgement of the right to contract. In such a case the conduct of the agent is in law the act of the principal which in law waives the right.

Insurance corporations act only through officers and agents, and in general where a person procures an insurance policy executed and issued by 'an agent who receives the premiums thereon, who issues removal permits and receives premiums therefor, and who has authority to permit additional insurance and to endorse such permission on the policy as the representative of the insurance company, the insured may regard the agent as having such authority as that his conduct may in law operate to estop the company from claiming the benefit of a provision printed in the policy that it shall be void if additional insurance be procured, unless otherwise provided by agreement endorsed on or added to the policy, no question of bona ñdes being involved. Whether or not there is a waiver or an estoppel must be determined from the fadts and circumstances of each case.

Insurance policies are issued, for a consideration, to indemnify the insured, and the law does not favor forfeitures of policies of insurance, particularly where they are induced by the conduct of the agent representing the insurer.

The facts admitted by the demurrer are that although no agreement providing for the other and additional insurance was endorsed on or added to the policy, yet at the time of the existence of the additional insurance, *278before the loss, and at the time an additional premium for a removal permit was paid to- the agent of the insurer, the agent was informed of the additional insurance and the agent then and there promised and agreed to malee the necessary endorsements and to furnish the insured with the necessary memorandum slip permitting' the additional concurrent insurance.

It is assumed from the pleadings in the transcript that the agent had authority to execute and issue the policy, to receive premiums, to grant permits for additional insurance, for removals, etc., and to- make the endo-rS'emeruts and to furnish the slips permitting additional insurance as the representative of the insurance company. An agent with such authority may by his conduct bind'''the company by estoppel, notwithstanding general provisions printed in the policy executed and issued by the agent that its conditions shall not be .waived except by agreement endorsed on the policy, and that no officer or agent shall otherwise waive any of the conditions. The policy is subject to- the law of agency and of estoppel.

The conduct of the agent who executed and issued the policy in receiving additional premiums for a rem-ovel permit thus giving added effect to the policy with knowledge that additional insurance had been procured by the insured, and in promising under these circumstances- to- make the necessary endorsements and to- furnish the necessary memorandum slip- permitting- the additional insurance, all being within his apparent authority, was calculated to lull the insured into inaction and to justify a belief that this "conduct of the agent was binding on the company. If the conduct of the agent, acting within his apparent authority, reasonably induced inaction of the insured, resulting in a technical failure to comply wth a prescribed condition, the failure may be *279regarded as acquiesced in by the company, since the conduct of the agent within his apparent authority should bind his principal rather than injure the insured, (the sole purpose of the policy being indemnity to the insured for a consideration paid to the insurer.

The allegations of waiver contained in the replication relate to a condition subsequent contained in the original policy, are in avoidance of 'the breach averred in the plea, and not inconsistent with, but are in support of, the allegations of the declaration stating the cause of action, and testimony to- sustain the replication would not be irrelevant under the declaration, therefore the replication is not a departure in pleading.