South v. Philadelphia Fire Marine Ins. Co. , 217 Ky. 612 ( 1927 )

Affirming.

Tobe South brought this action against the Philadelphia Fire Marine Insurance Company, to recover $600.00 on a fire policy for the destruction by fire of an Oldsmobile auto. At the close of all the evidence a directed verdict was returned in favor of the insurance company and South appeals.

The policy sued on contains the following provision: "Other Insurance. No recovery shall be had under this policy if at the time a loss occurs there be any other insurance covering such loss, which would attach if this insurance had not been effected."

Originally the policy was issued for $800.00, but the company concluded that this was too much and reduced the amount to $600.00, giving notice to South of its action and returning to him one-fourth of the premium, all of which he accepted without objection.

Later South took out $500.00 additional insurance with another company and was carrying $1,100.00 insurance on the car at the time of its destruction. These facts were pleaded as a forfeiture, the plaintiff relying on a waiver of the forfeiture clause. The evidence of the plaintiff shows that the machine cost about $1,100.00 when purchased in May, 1923, and he had added some extras, making his total outlay something over $1,200.00. The fire occurred in December, 1924; he did not qualify as to his knowledge of value at that time, but it had not been injured, and he thought it might be worth as much as a new car. Defendant's evidence shows its then value to have been about $700.00. In his evidence appellant admits that the agent told him that the company would carry only $600.00 on the property; that the policy was reduced to that figure and he was refunded the excess on the premium, but says that "I told him (the agent) it was not enough insurance," and in referring to a subsequent conversation says, "If I ain't badly mistaken I told him one day that I already got some more." Cross-examined as to these conversations he said: "I told him I ought to have some more, I want to take some more insurance," and at another place, "I told him I had some more." And says that the agent made no reply to these remarks.

Another witness for plaintiff testified that he heard Tobe South tell W. S. Phleger, agent for defendant, that he had reduced his insurance from $800.00 to $600.00, and the car was worth more and that he was going to get other insurance on the car.

All of this is denied by the agent, and as his evidence does not aid plaintiff it may be eliminated in considering the propriety of a directed verdict. It is well settled in this state that the provisions in an insurance policy for a forfeiture in the event additional insurance is taken out by the insured may be waived. Phoenix Ins. Co. v. Spires Thomas,87 Ky. 285; Connecticut Fire Ins. Co. v. Moore, 154 Ky. 18; Ky. Growers' Ins. Co. v. Logan, 149 Ky. 453; Hurst Home Ins. Co. v. Ledford, 207 Ky. 212.

Such waiver may be inferred if the agent at the time of the issual of the policy consents for additional insurance to be taken, or informs the insured that this may be done and the insured in ignorance of any limitation upon the agent's authority and relying upon his apparent authority does take out additional insurance; also if afterwards with the assent of such agent the insured takes out additional insurance and with knowledge of that fact the company retains the premium and fails to cancel the premium this will be deemed an election to waive the forfeiture. In this respect the knowledge of the agent brings notice to the company. However, in order to constitute such election upon the part of the company to continue the policy in force, it must appear that it had clear notice of the additional insurance; or that its agent at the time the policy was issued consented to such additional insurance, and that the insured acted on this, in ignorance of any limitation of the agent's authority in the matter. Here the agent not only did not consent to additional insurance but informed the appellant that $600.00 was all that the machine could carry, which, aside from the provisions of the policy, negatived the idea of permitting additional insurance, the company's judgment in this being confirmed by the proof of the value of used cars of this type and character. The loose, indefinite statements which appellant claims to have made to the agent are insufficient to give it notice that he had in fact taken out additional insurance; or to show that with knowledge of the fact it continued the policy in force; and if he made the statements claimed the silence of the agent could not have misled him. We do not think the evidence sufficient to constitute a wavier.

Wherefore, perceiving no error, the judgment is affirmed.