Brown v. Commercial Fire Insurance

OLOPTON, J. The material and decisive defense urged to the action, which is founded on a policy of fire-insurance, is, that the assured failed to disclose the true ownership of the property insured. This defense is set up by several different pleas, varing somewhat in form and particularity of the averments as to the interest and title of the assured, but substantially the same in their legal effect. We shall take for consideration the one which avers the facts in the fullest manner, and with greatest particularity. The^plea alleges that the policy contained the following condition and stipulation: “This policy shall become void, unless consent in writing is indorsed by the company hereon, in each of the following instances — viz:., if the assured is not the sole and unconditional owner of the property; or if any building intended to be insured stands on ground not owned in fee simple by the assured; or if the interest of the assured in the property, whether as owner, trustee, consignee, factor, agent, mortgagee, lessee, or otherwise, is not truly stated in this policy.” The object of such stipulation in a policy is, to protect the company against taking risks on property, for an amount disproportionate -to the value of the interest of the assured, on which the company relies, to a great extent, as an incentive to use all reasonable precautions to avoid the destruction of the property. Being incorporated in the policy, it is in the nature of a condition precedent, which must be substantially conformed with, to entitle the assured to recover. - When the true ownership is not required to be fully stated by the conditions of the policy, generally it will be sufficient if the assured has an insurable interest; but, when such requirement is the condition of the policy, it becomes a material part of the contract, and all rights under it are forfeited by non-compliance. A failure, in such case, to disclose truly the interest in the property, can not be regarded an immaterial circumstance. By express stipulation, the parties make it material, and the validity of the contract is dependent on a compliance with the condition. The assured, by accepting a policy in which such condition is incorporated, becomes bound thereby; and when lie claims to [193] enforce the contract, and receive its benefits, he. is estopped from denying his assent to the stipulation. — Lasher v. St. Jos. Fire & Marine Ins. Co., 86 N. Y. 423; Mers v. Franklin Ins. Co., 68 Mo. 127; Swan v. Watertown Ins. Co., 96 Penn. St. 37; Adema v. LaFayette Fire Ins. Co., 36 La. An. 660; Ala. Cold Life Ins. Co. v. Johnston, 80 Ala; 467. The plea avers, that the policy of insurance was issued to the assured, on property described therein as his. This imports that it was issued to him as the sole and unconditional owner of the property. — Lasher v. St. Jos. Fire & Marine Insurance Co., supra; Mers v. Franklin Ins. Co., supra. It further avers, that the assured had, at the time the insurance was effected, and at the time of the destruction of the property, only a lease-hold interest in the ground on which the building insured stood, and that he held the property insured under an executory contract of purchase, by which the vendor, who is the plaintiff in this action, agreed and undertook to convey and assure to him the property upon the payment of seven thousand dollars; and by which it was also provided, that if the assured failed to make the payments of the purchase-money, or either of 'them, the contract should, at the option of the vendor, be forfeited and determined. The plea also alleges, that the assured had paid no part of the purchase-money at the time of the issuance of the policy, and that he had no other title to the property. Assuming the truth of the averments of the plea, they clearly show that the assured was not the sole and unconditional owner; that he did not own in fee simple the ground on which the building stood; and that his interest in the property was not truly stated — a non-compliance with the condition and stipulation of the policy, which avoids the contract, unless it was waived in some mode binding the company. Jt is not necessary that the plea- should negative the indorsement of a written consent on the policy. Such consent would be a waiver of the condition, and is proper matter of replication to a plea alleging a breach of the condition. There is no error in overruling the demurrer. On the demurrer being overruled, the plaintiff filed two replications to the special pleas, each of which sets up substantially the same matter in avoidance of the alleged breach of the contract. A demurrer to the replications was sustained. It is contended, that the replications sufficiently aver and set up that the assured disclosed, at the time of making the application for insurance, to the agent of the [194] defendant, all the facts and circumstances connected with his title, ownership, and interest in the property. If such be the effect of the replications, when properly interpreted, they would show a waiver of the condition; and constitute a full answer to the plea. If the assured fully and truly disclosed his interest and ownership to an agent of the defendant, authorized to take applications for insurance, deliver policies, and receive premiums, the company will not be permitted to take advantage of an oversight or wrongful act of its own agent, to avoid the policy. — Williamson v. N. O. Ins. Co., 84 Ala. 106. One of the grounds of demurrer is, that the replications do not allege that the person, to whom the disclosure was made, was the agent of the defendant. The replications substantially allege the following facts: That the assured applied for insurance to Benjamin Kimball, an insurance agent in St. Louis, Mo.; that shortly after making the application, he received from Kimball the policy sued on, and paid him the premium of twenty-five dollars; that neither he, nor any one for him, paid Kimball commissions, or any other remuneration; and that the only transactions between the assured and defendant were those had with Kimball. It is insisted, that an express averment of agency is not necessary, and that it is sufficient if facts constituting an agency are averred. This may be conceded; but, when only facts are set forth as constituting an agency, their sufficiency must be tested by the legal requirements of good pleading. All pleading will be construed most strongly against the pleader, the presumption being that he states his cause of action, or matter of defense, most favorably for himself; and if the pleading fairly admits of two constructions, that will be adopted which is least beneficial to him. — City Counoil v. Hughes, 65 Ala. 201. When agency, which, like any other fact, may be proved by circumstantial evidence, is the subject-matter of proof, it is sufficient if the circumstances reasonably authorize its inference. But, when agency is the matter of pleading, and, without expressly averring it, the pleader relies on averments of facts as constituting an agency, the averments should be of such nature and character that agency follows as a conclusion of law; such as would justify the court, if the facts are proved, in giving an affirmative charge, and such as do not fairly admit of any other construction. It is not averred that Kimball previously acted for defendant in any similar transactions; nor that applica [195] tion was made to him as agent of defendant; nor that defendant paid his commissions; nor any facts or circumstances which show that defendant recognized him as an agent in this or other transactions, or that defendant held him out, or that he held himself out by permission of defendant, as clothed with the authority of an agent. The averment that he was an insurance agent does not necessarily import that he was the agent of the defendant, or of any other particular company. The replication would have been, sufficient, had it averred the agency in express terms; and the inference of agency could have been submitted to the jury on proof of the circumstances; but we can not affirm it as matter of law from the facts alleged. The averments of the replications fairly and consistently admit of the construction, that Kimball was the agent of the assured to procure insurance for him on the most advantageous terms, without reference to any particular company. We have specially considered the fifth plea and the replications thereto, because it sets forth more fully and particularly the matter of defense, and have declared that it presents a full defense. The demurrer to the replications having been sustained as to all the grounds of demurrer, the plaintiff refused to plead further. This renders the sufficiency or insufficieny of the other pleas immaterial. When there is a plea which presents a full and valid defense, and plaintiff declines to plead further on a demurrer to the plea being overruled, or a demurrer to a replication to the plea being sustained, and the court thereupon renders judgment for the defendant, the judgment will be affirmed.- — Guilford v. Kendall, 42 Ala. 651. Affirmed.