Jackson v. Grange Mutual Fire Insurance

Lively, Judge: This is an action by H. M. Jackson seeking recovery on a policy issued by the Grange Mutual Fire Insurance Company. Judgment was rendered in favor of the plaintiff in th$ sum of $1,125.66, and this writ followed. It appears from the agreed statement of facts upon which the ease was submitted to the trial court in lieu of a jury, that the defendant, a farmers’ mutual fire insurance company, on September 23, 1922, issued a $3,000.00 policy to the plaintiff, $2,000.00 of which applied to a barn and $1,000.00 to personal property contained therein; that a gross premium of $15.00 covering both items of insurance was paid by plaintiff, and that the policy was renewed annually by the payment of the gross premiums up to and iiicluding the date of the destruction of the property by fire, November 17, 1926; that before August 24, 1926, the defendant’s liability as to the barn was reduced to $1,500.00; that on the date last men *306 tioned tbe plaintiff secured an additional policy on tbe barn for $1,000.00 in another Compaq; tbat tbe constitution and by-laws of tbe defendant contain tbe following provision: “Any member taking- additional insurance on property insured by tbis company, without first securing tbe consent of tbe executive committee through tbe secretary, vitiates tbe policy issued by tbis company, from tbe time such additional insurance policy was issued on tbe property.” Tbe consent of tbe defendant to additonal insurance bad not been obtained by tbe plaintiff. A copy of defendant’s by-laws was not attached to or printed on tbe policy issued to tbe plaintiff. Tbe trial court took tbe view tbat tbe condition respecting additional insurance avoiding tbe policy, affected only tbe first item, namely, tbe barn, and held tbat plaintiff was entitled to recover tbe insurance on tbe personal property. Tbe defendant contends tbat tbe court erred in so bolding. There are a number of rules for determining tbe divisibility of an insurance contract covering two or more items of property. 14 R. C. L., section 114, page 939. Tbe weight of authority, and sound reason, supports tbe rule tbat where tbe different classes or items of property, separately valued, are so situated in respect to each other tbat tbe risk is common to all, then tbe breach of a condition increasing tbe risk as to one works a forfeiture of tbe entire policy. Bond v. Insurance Company, 83 W. Va. 105; 3 Cooley’s Briefs on Insurance, (2nd Ed.), p. 2996; 26 C. J., section 349, p. 277; Mortt v. Liverpool & London & Globe Insurmce Company, 133 S. E. (N. C.), 337. According to tbe agreed statement of facts all tbe property covered by tbe policy was exposed to tbe same risk and was destroyed by tbe same fire. Tbe trial court erred in bolding tbat tbe contract of insurance was not vitiated in entirety. Tbe plaintiff cross-assigns as error tbe trial court’s action in refusing to permit a recovery for tbe insurance on tbe barn. It is maintained tbat tbe condition relating to tbe securing of additional insurance could not affect tbe right of tbe plaintiff to recover because it was not made a part of tbe policy as required by section 69, chapter 34 of tbe Code of 1923, providing tbat “in all policies of insurance issued *307 against loss by fire, made by companies chartered or doing business in this state, no condition shall be valid unless stated in the body of the policy or attached thereto.” Section 69, chapter 34, was enacted by the Legislature in 1907. In 1908, chapter 55 of the Code relating to unincorporated, non-stock associations, including mutual fire insurances, was amended and re-enacted, in so far as it related to the organization and operation of farmers’ mutual co-operative insurance companies and fraternal beneficiary societies. Section 18 of the act provided that “the insurance contracts of all such companies (farmers’ mutual fire insurance companies) shall be made to conform to the provisions of this chapter and shall consist of the policy proper, constitution and by-laws of the company, all endorsements made on or attached to or incorporated in the insurance contract, and any premium note or other obligation given by a member, all of which shall be binding on the insured as long as he remains a member or policy holder of the company.” In 1923, the Legislature repealed section 69 of chapter 34 of the Code, and provided a standard form of fire insurance policy, especially exempting farmers’ mutual fire insurance companies from the operation of the newly enacted section. The contention of the plaintiff regarding the application of section 69, chapter 34 of the Code of 1923, to the policy in question, is untenable, in view of the subsequent legislation relative to farmers’ mutual fire insurance contracts. Easter v. Brotherhood of American Yeomen, 157 S. W. (Mo.) 992. At the date of its passage in 1907, section 69, incorporated in the general insurance law of chapter 34, Code, 1923, may have included within its scope policies issued by farmers’, mutual fire insurance companies, but the Legislature in amending and re-enacting chapter 55 of the Code in 1908 specifically provided that the contract of the farmers’ mutual fire insurance company should consist of the policy proper, constitution and by-laws of the company, all endorsements made on or attached to the policy, such parts of the application as are attached to or incorporated in the insurance contract, and any premium note or other policy obligation given by a *308 member. Under this section a condition contained in tbe by-laws is as -binding as if it were included in tbe policy itself, for tbe by-laws are, by tbis provision, made a part of tbe insurance contract. By tbis special subsequent enactment witb reference to farmers’ mutual fire insurance companies, tbe Legislature, recognizing the purpose and peculiar organization of such companies, intended, in tbe formation of tbe policy contract, to take them out of tbe operation of tbis section applicable to fire insurance contracts in general. “Where there is one statute dealing witb a subject in general and comprehensive terms and another dealing witb a part of tbe same subject in a more minute and definite way tbe two should be read together and harmonized, if possible, witb a view to giving effect to a consistent legislative policy; but to tbe extent of any necessary repugnancy between them, tbe special will prevail over tbe general statute. Where tbe special statute is later, it will be regarded as an exception to, or qualification of, tbe prior general one * * 36 Cyc. 1151. Tbis construction of tbe effect to be given section 18, chapter 32, acts of 1908, is strengthened by tbe legislative enactment of chapter 18, acts 1923, which specifically exempts farmers’ mutual fire insurance companies from tbe operation of tbe policy contract set out in tbe statute as amended. 36 Cyc. 1149. Reliance is bad by tbe plaintiff upon Shinn v. Insurance Company, 104 W. Va. 353, in which it was held that section 40a, chapter 34 of tbe Code, making all insurance companies doing business in tbis state liable for tbe whole of tbe amount of insurance on real estate in tbe policy of insurance where tbe property was totally destroyed by fire or otherwise, applies to mutual companies organized under chapter 55, Code. It may be that certain provisions of tbe general fire insurance law, including that pertaining to tbe “valued policy law”, are applicable to farmers’ mutual fire insurance companies, where tbe Legislature has not expressed a contrary intent. But in tbe instant case tbe Legislature by tbe subsequent enactment of section 18, chapter 32, acts 1908 (section 18, chapter 55, Code), indicated an intent that section 69, chapter *309 77, acts 1907 (section 69, chapter 34, Code, 1923), should not thereafter be applicable to contracts made by farmers’ mutual fire insurance companies. The judgment of the trial court will be reversed, and judgment entered here for the defendant. Reversed and remanded.