International Indemnity Co. v. Duncan

WILLSON, C. J. (after stating the facts as above). It appeared that the automobile was stolen, and that afterwards, while it was in the possession of the thief, it-was destroyed by fire. As, therefore, the loss to appellee provided against in the policy was complete, terminating the policy (3 Joyce on Insurance, § 1450), before the automobile was burned, the liability -of appellant to him was predicable on the theft alone. Whether it was liable as determined by the judgment depends upon whether appellee was bound by the stipulation in the policy, set out in the statement above, against incumbrances on the automobile. The stipulation was a valid one, unless prohibited by article 4892, Vernon’s Statutes, as appellee contends it was; and, appellee having, admittedly, incumbered the car with a mortgage after the policy was issued to him without the consent of appellant in writing, the stipulation was conclusive against his right to recover as he did, unless "appellant was estopped from setting same up as a defense against such recovery. The article of the statute referred to was section 18 of the Act approved April 2, 1913 (General Laws, p. 195), providing conditions under which fire insurance companies should transact business in this state, and is as follows : “Any provision in any policy of insurance issued by any company subject to the provisions of this act to the effect that if said property is incumbered by a lien of any character or shall after the issuance of such policy become incumbered by a lien of any character, that such incumbrance shall render such policy void, shall be of no force and effect, and any such provision within or placed' upon any such policy shall be absolutely null and void.” The theory upon which it is claimed that the statute, applicable when it was enacted to fire insurance companies alone, rendered the stipulation void, seems to be based partly on the fact that the policy insured appellee against loss of the automobile by fire as well as the loss thereof by theft, .and partly on article 4955, Vernon’s Statutes, which is as follows: “All the provisions of the laws of this state applicable to the life, fire, marine, inland, lightning, or tornado insurance companies, shall, so far as the same are applicable, govern \and apply to all companies transacting any other kind of insurance business in this state, so far as they are not in conflict with provisions of law made specially applicable thereto.” So far as the contention is based on the statute just set out, it is sufficient to say that that statute was enacted in 1909, as a part of an act authorizing the incorporation of life, accident, and health insurance companies, General Laws, p. ,192. It therefore could not be held to apply to the provision set out from the statute enacted in 1913, stating conditions upon which fire insurance companies should transact business in this state. And so far as the contention is based on the fact that the policy was to indemnify appellee against loss of the automobile by fire as well as by theft, it is equally untenable, as was, in effect, determined by this court in Ins. Co. v. Johnson, 248 S. W. 88. It follows that the judgment is wrong, unless appellant was estopped from setting up the stipulation in the policy referred to as a defense against the recovery obtained against it. As shown in the statement above, the estoppel claimed was predicated on the fact, as [235] found by the jury, that appellant knew when it issued the policy that appellee “was going to incumber the automobile for the purpose of borrowing money” on it. The rule established by the weight of the authorities is that “a delivery of a policy with knowledge of a mere intended violation of its terms will not create a waiver or an estoppel.” 3 Cooley’s Briefs on Insurance, 2646; 7 Cooley’s Briefs on Insurance, 2645; 14 R. C. L. 1170; McCarty v. Ins. Co., 81 S. C. 152, 62 S. E. 1, 18 L. R. A. (N. S.) 729; Ins. Co. v. Prather, 25 Tex. Civ. App. 446, 62 S. W. 89. Appellee cites Ins. Co. v. Chancey, 60 Tex. Civ. App. 61, 127 S. W. 577, decided by the Court of Civil Appeals which decidel the Prather Case, supra, as a ease supporting his view. But clearly it does not. In that case the stipulation was against keeping or using gasoline on the premises insured. It appearing that the building was used as a restaurant, and that gasoline was being used there as a fuel at the time the policy was issued, the trial court instructed a verdict for the plaintiff. On appeal the judgment was first affirmed, on the theory that it appeared as a matter of law that a condition existed which invalidated the policy’at the time it was issued, and that the insurance company knew it; but on a rehearing the judgment was reversed, the court having concluded that the testimony made an issue for the jury as to whether the company “had such knowledge that gasoline was kept, used, or allowed on the insured premises in the manner and in the quantities it was so kept, used, or allowed as would operate as a waiver of the conditions of the policy with regard thereto.” The appellee here neither alleged nor proved that he did not know that the stipulation in question was in the policy. It must be assumed, therefore, that he knew at the time he mortgaged the automobile that by the express terms of his contract with appellant it was not to be liable to him for loss of the property by theft if he so incumbered it without the agreement in' writing of appellant that he might do so. Wijfi that knowledge he certainly could not 'claim an estoppel against appellant because he had advised it of his intention to mortgage the property. The stipulation was notice to him that he must not do so, and he was in the attitude of agreeing he would not do so, without the consent of appellant in writing. The judgment will be reversed, and judgment will be here rendered that appellee take nothing by his suit against appellant.