Bennecke v. Insurance Company/Opinion of the Court
It is not disputed by the plaintiff, that, upon the facts found, the policy of insurance had been forfeited. It is not insisted that the company by its agent formally waived the forfeiture, or issued any permit to Bennecke, from which such waiver could be inferred.
But the plaintiff contends that, after the forfeiture of the policy, Ansley, the agent of the company at Bloomington, having on October 17 received the sum usually charged for a permit to reside south of the thirty-second parallel, between the 1st of July and the 1st of November, and sent it on the same day to the agents of the company at Chicago, its receipt by them, and the fact that they never returned it to the person by whom it was paid, are sufficient to establish the company's waiver of the forfeiture.
It does not appear from the findings that either the agent at Bloomington, or those at Chicago, had any direct authority to waive a forfeiture. But even if it were shown that they had such authority, and had waived the forfeiture, or that the company itself had waived it, the waiver would not, under the circumstances of this case, be binding on the company.
A waiver of a stipulation in an agreement must, to be effectual, not only be made intentionally, but with knowledge of the circumstances. This is the rule when there is a direct and precise agreement to waive the stipulation. A fortiori is this the rule when there is no agreement either verbal or in writing to waive the stipulation, but where it is sought to deduce a waiver from the conduct of the party. Thus, where a written agreement exists and one of the parties sets up an arrangement of a different nature, alleging conduct on the other side amounting to a substitution of this arrangement for a written agreement, he must clearly show not merely his own understanding, but that the other party had the same understanding. Darnley (Earl) v. London, Chatham, & Dover Railway Co., Law Rep. 2 H. L. 43.
The same rule applies to the ratification by the principal of the unauthorized acts of his agent.
'It is perfectly well settled that a ratification of the unauthorized acts of an agent, in order to be effectual and binding on the principal, must have been made with a full knowledge of all material facts, and that ignorance, mistake, or misapprehension of any of the essential circumstances relating to the particular transaction alleged to have been ratified will absolve the principal from all liability by reason of any supposed adoption of or assent to the previously unauthorized acts of the agent.' Combs v. Scott, 12 Allen (Mass.), 493.
And it has been declared by this court that 'no doctrine is better settled, both upon principle and authority, than this: that the ratification of an act of an agent previously unauthorized must, in order to bind the principal, be with a full knowledge of all the material facts. If the material facts be either suppressed or unknown, the ratification is treated as invalid, because founded on mistake or fraud.' Owings v. Hull, 9 Pet. 607. See also Diehl v. Adams County Mutual Insurance Co., 58 Pa. St. 443; Bevin v. Conn. Mutual Life Insurance Co., 23 Conn. 244; Viall v. Genessee Mutual Insurance Co., 19 Barb. (N. Y.) 440.
There is no pretence in this case that the company was advised of the material facts, when its supposed waiver of the forfeiture of the policy and its ratification of the acts of its agent took place. The contention of the plaintiff is that a forfeiture was waived when the company was totally ignorant that it existed. And the waiver is inferred from a permit, which is itself deduced from the fact that an agent, himself ignorant of the material facts, agreed to apply to the company for it, and received and forwarded the money to pay therefor.
The very purpose for which a permit was asked shows that both parties were ignorant of the facts which should have been communicated to the company and its agents before any effect could be given to tis alleged waiver of the forfeiture. Permission was asked that Bennecke might reside and travel south of a certain parallel. This implied that he was living and able to travel. But the findings show he was dead when the permit was applied for. If the company had given him a formal permit in writing to reside and travel south of the thirty-second parallel, he being dead at the time, and the company ignorant of the fact, it would be a complete non sequitur to hold that this amounted to a waiver of a forfeiture of the policy unknown to the company, and consequent upon his doing the act for which a permit was asked, and which was in violation of a condition of the policy.
The case may be thus stated: The right of the plaintiff to a recovery rests on a waiver by the insurance company of the forfeiture of the policy. But there has been no direct waiver. The waiver is deduced from the permit. But there has been no formal permit. The permit is inferred from the fact that Ansley, a local agent, who had no knowledge of the death of Bennecke, applied for a permit to other agents also ignorant of the death of Bennecke, and remitted to them the money therefor which they retained, but which Ansley tendered back, using for the tender other moneys of the company; the company itself, the principal of these agents, being all the time ignorant that Bennecke had forfeited his policy by a violation of its conditions, or that he had died in consequence of such violation, or that after his death a permit to allow him to reside and travel in the forbidden region had been applied for, or that any money had been handed to its agent to be paid over as the consideration for such permit.
The case of the plaintiff is not aided by the facts found by the court in relation to the retention by the agents of the company of the money paid for the permit. It is unnecessary to decide what inference might be drawn if the company or its agents, with full knowledge of the death of Bennecke, had retained the money and never tendered it back. It does not appear that Ansley was informed of the death of Bennecke until October 26. On November 6, eleven days thereafter, he tendered back to Haker the money advanced by him to pay for the permit. Under the circumstances of this case we do not think this lapse of time sufficient to show that Ansley intended to waive the forfeiture of the policy, even if he had been clothed with authority to do so.
If the company was bound by the act of Ansley in receiving the money for the permit, it was entitled to the benefit of his act in tendering it back. One tender was sufficient. That made by Ansley was never disavowed by the company. On the contrary, the company renewed it upon the trial of the cause in the Circuit Court.
Under the circumstances of this case, the contention that the insurance company waived the forfeiture of the policy is without support.