Phoenix Insurance v. Fleenor

Kirby, J., (after stating the facts). It is contended, first, that the court erred in giving instruction numbered 1; and we do not agree with its correctness as an abstract proposition of law, for, while a partner has implied authority to dispose of the personal property of the firm, it is usually only when he makes the transfer in the course of trade and incidental to the regular business of the firm that it is binding upon all the partners in favor of a bona fi.de transferee. 30 Cyc. 495. We think no prejudice resulted to appellant from the giving of this instruction, however, because the court at its request told the jury that if Pullen owned part of the furniture used in the hotel at the time of the issuance of the policy, or if Pullen and Pearce owned a part thereof jointly at that time, it amounted to a breach of the warranty, and avoided the entire policy; and, even if they should find that the plaintiff acquired the interest of Pearce before the policy was issued, if they believed that Pullen still owned an interest, either solely or jointly, in any part of the furniture, it would avoid the policy. That, if plaintiff was not the sole and unconditional owner of all the property insured at the time of the issuance of the policy, there was a breach of warranty which avoided the policy, regardless of what the plaintiff thought and believed about her ownership. The testimony shows that there was no partnership agreement between Pullen and Pearce, after their agreement to move from the Moore Flats, and had not been relative to the $400 worth of furniture jointly purchased by them, and Pullen's statement shows that he authorized the sale of his furniture by Pearce, and the evidence tended to show that he had indorsed four of the checks given in payment by Mrs. Fleenor for the $200 worth of furniture purchased from Pearce by her, and it was undisputed that he made no claim of ownership of any of the property until after the fire, notwithstanding he knew it had been purchased by Mrs. Fleenor long before the fire occurred. She stated that no other furniture than the $200 worth she purchased from Pearce was removed from the Moore Flats to the Southern Hotel for use therein, and that she was the sole and unconditional owner of all the furniture used in furnishing the hotel at the time of the issuance of the policy and the fire; and this question was fairly submitted to the jury upon the instructions given, and they have found the issue in her favor. 2. The next contention is that the policy was avoided by a violation of the clause relating to the use of coal oil; that the court erred in giving instruction numbered 10, and in refusing appellant’s requested instructions numbered 5, 6 and 7. Under said clause of the policy relating to kerosene oil, the words in parentheses, applicable thereto, “ (which last may be used for light and kept for sale according to law, but in quantities not exceeding five barrels, provided it be drawn and lamps filled by daylight, or not less than ten feet from artificial light)” import a regulation of the use-of kerosene oil for lighting purposes, and the condition does not prohibit its use for other purposes than for lights, and the use thereof in-heaters to warm the rooms did not avoid the policy, there being no question that the oil was of the prescribed standard, or that the loss was caused by drawing or filling lamps at night in less than the prescribed distance from artificial light, 2 Clement, Fire Insurance, 336. As said, it was only intended as a* regulation or restriction of the use of the oil for lighting purposes and the quantity kept for sale, and the policy would not have been avoided under this clause if oil was kept and stored about the premises, so long as the quantity was not greater than the amount allowed thereunder. The court told the jury that if the fire which destroyed' the property was caused by the failure of the insured to comply with the clause of the policy restricting the use of kerosene oil on the premises they would find for the company, and committed no error in refusing to give appellant’s said requested instructions numbered 5, 6 and 7. There was no claim made in the court below that the hazard was increased by the use of coal oil 'or storing it in any particular way, nor was any instruction asked in relation thereto, and appellant only urges it now in its reply brief, which comes too late to avail of a defense that should have been insisted upon in the trial court. 3. It is next contended that the court erred in giving instruction numbered 4, declaring that the lien specified in the lease was not a chattel mortgage under the terms of the insurance policy. Our law does not recognize the remedy of distraint for the collection of rent as it existed at the common law, and, by the terms of said lease, a lien only against the furniture of appellee was given as a security for the payment of any rent that should become due and be not paid at the time thereof. It contains no words of conveyance of the property, and had no effect to transfer the legal title thereof to the lessor, nor was it intended by the parties to have any such effect. Under it, the lessor could not have taken possession of the property from the lessee, by replevin, and his only remedy would have been to enforce the lien against it by a suit in equity. It was intended only as a security, and a chattel mortgage is more than that. Perry County Bank v. Rankin, 73 Ark. 589. “Such a mortgage is something more than a mere security. It is a conditional sale of chattels and operates to transfer the legal title to the mortgagee, to be defeated only by a full performance of the condition.” Jones on Chattel Mortgages, § 1; Cobbey on Chattel Mortgages, § § 2, 4. It is true that it was held in Mitchell v. Badgett, 31 Ark. 394, that a lease of land duly executed by a landlord and tenant, in which a lien was expressly given and reserved upon all the crops produced upon the land by the tenant, and which provided that no part of same should be removed or disposed of in any way by the tenant or his agent until the note had been paid, or with the consent of the landlord, amounted to a mortgage. But that was a proceeding in equity to enforce a lien and declare a trust against the property subject to the lien in the hands of another which would and could havé been done without regard to whether the instrument was a chattel mortgage, or only gave a lien as security. The lien in this case could have been regarded as an incumbrance, but no provision was made against incumbrances, and it did not affect the title of the insured, the rent always having been paid in advance and none ever having become due, for which the lien attached as security even. It is last contended that the court erred in assessing the penalty and allowing an attorney’s fee. Appellant in its brief states that it copied a proof of loss submitted to one ol the concurring insurance companies and sent it to the insured to be sworn to, and concluded to take the full time prescribed in the policy in which to pay the loss. It did not pay the loss, as it agreed to do, within the time prescribed in the policy after proof of loss was made, and, being sued, denied liability upon the policy. It gave the insured no intimation that the proof of loss so made out at its instance was not satisfactory, and that the amount, as adjusted, would not be paid within the time prescribed in the policy; neither did it claim exemption from payment because of a garnishment served on it, and it did not fail to pay because of h lack of demand, but on account of its denial of liability. Jn Metropolitan Life Insurance Co. v. Shane, 98 Ark. 137, the court said: "It is not necessary that there should have been a formal demand for payment of the policy before the penalty for its nonpayment would attach. It is only necessary to show facts from which it can be reasonably inferred that the company understood that payment was demanded and that it refused to make same.” As already stated, the company made no excuse for a failure to pay within the terms of the policy after proof of loss made, and, by its conduct in so doing after concluding to take the full time and subsequently resisting payment on the ground that it was not liable on the policy, it evinced a refusal to pay after it understood payment was demanded. A mere formal demand would have effected nothing, and, under the circumstances, it was not required to be, made, and the court committed no error in assessing the penalty and attorney’s fee against it, pursuant to the statute. It is also true that the record does not show that any proof was taken upon the question of a reasonable attorney’s fee before one was fixed by the court, but he had the whole matter before him, was familiar with the case and the service done by the attorneys therein, and we can not say that there was no evidence warranting his fixing the amount of the fee, which was a matter within the discretion of the court. Neither do we think the amount allowed is excessive. Finding no prejudicial error in the record, the judgment is affirmed.