Queen of Arkansas Insurance v. Laster

Wood, J., (after stating tbe facts). 1. The testimony of the appellee tended to show that he informed the agent of the appellant at the time the latter took his application for insurance, that he did not own the land on which the products being insured were grown. He told the agent that the property was leased. He told the agent about the lien. He told him about the plow and about giving notes with security — told him that “he had given these ownership notes.” The testimony of the daughter of appellee tended to show that while she was not present all the time when her father was making the statements in the application, yet the agent of the company knew that the property was encumbered. When asked the question as to whether the parties who took the application knew that the property was encumbered, she answered affirmatively. Testimony of the appellee himself further tended to show that he did not tell the agent who took the application that there was no encumbrance on the property. He said he did not “remember the question nor answer.” Said he thought the question was asked and he told the agent, but did not know whether he “put it down or not.” The above testimony was amply sufficient to warrant the court in submitting to the jury the question as to whether or not, at the time of the application for insurance, the appellant’s agent was informed of encumbrances on the property. This court has often ruled that a warranty of no encumbrance is waived where the insurer’s agent was notified when application was made for the policy, that the property was encumbered. (Capital Fire Ins. Co. v. Montgomery, 81 Ark. 508; Capital Fire Ins. Co. v. Johnson, 82 Ark. 90.) In the application, when the appellee was asked in whose name the title to the land was, on which the crops insured were grown, he answered “J. P. Basham owned the land.” He also told the agent that the land was occupied by a tenant. This, in connection with the other testimony above, was sufficient at least to make it a jury question as to whether the appellant’s agent had knowledge of the encumbrances existing on the farm products at the time of taking the application for insurance. The instructions given at the instance of appellant, properly submitted the question as to whether or not a breach of warranty of unconditional ownership and no encumbrances on the property insured had been waived by knowledge of the agent of appellant, of the facts alleged to have constituted such breach of warranty, at the time contract of insurance was entered into. Appellant contends here, for the first time, that there was a collusion between appellee and the agent of appellant, to procure the insurance, but there is no evidence in the record to warrant the conclusion that appellant’s agent was interested in the property insured. The most that could be said of the testimony is that it showed that the agent of the insurance company, who took the application, was acquainted with appellee, and his daughter, who worked in the samé bank with appellant’s agent, and that he had a friendly feeling for the appellee and his daughter. He was interested in procuring the insurance — so much so that he agreed to, and did pay the premium for appellee; but this does not even tend to show that the insurance was procured by fraud, so as to bring the case in the rule of Home Insurance Co. v North Little Rock Ice & Electric Co., 86 Ark. 538, on which appellant relies. In that case, the agent had a personal interest in the property insured, affecting the insurance, and to the prejudice of his principal, which might induce him to keep the matter concealed from his principal. 3. This court has often held that failure to furnish proof of loss in accordance with the terms of the contract of insurance constitutes a forfeiture of the policy, and is therefore a complete defense to any suit upon a contract of insurance. (See Teutonian Ins. Co. v. Johnson, 72 Ark. 484; Ark. Mutual Fire Ins. Co. v. Clark, 84 Ark. 224; Commercial Fire Ins. Co. v. Waldron, 88 Ark. 120; American Ins. Co. v. Haynie, 91 Ark. 43.) But this defense can not avail appellant, for the reason that the undisputed evidence shows that appellant’s adjuster waived the requirements of the policy as to the proof of loss. Just after the fire, appellee called upon the company at its office in Little Bock, notified it of the fire and asked for blank proofs of loss. The appellant’s adjuster informed him that he carried no blank proofs of loss. The adjuster a short time afterwards went down to the farm where appellee was to adjust the loss. lie questioned appellee in regard to the same and took down his statements. Appellee told the adjuster that he was ready to furnish any information he desired and the adjuster said that he had “all the proof he wanted.” This conduct on the part of the adjuster was a waiver of the formal proof of loss specified in the policy (See Lord v. Des Moines Fire Ins. Co., 99 Ark. 476; Queen of Ark. Ins. Co. v. Forlines, 94 Ark. 227.) When appellant’s adjuster, in response to appellee’s inquiry, said that he had “all the proof he wanted,” this was a waiver of any further proof of loss on the part of appellant, notwithstanding the nonwaiver agreement. It was equivalent to saying to the appellee that appellant was satisfied as to his loss and had all the information pertaining thereto that appellant desired. In this view of the case, it was not a prejudicial error for the court to tell the jury that the denial of liability by the appellant was a waiver of proof of loss, conceding that it was a disputed question as to whether appellant denied liability. But we are of the opinion that the letters written by appellant to appellee, before the time for making proof of loss had expired, were in legal effect an absolute denial of liability. True, appellant’s agent, who wrote them, says that he did not “deny liability at all,” but he does not deny that he wrote the letters and the letters speak for themselves. The language in the letter of February 3 is as follows: “Beg to say that basing our opinion on the information that has been furnished us to the present time, it is our opinion that we are not in any way liable to Mr. Laster for any amount on account of his alleged loss by fire on the policy of insurance which he holds. ’ ’ The only reasonable construction of which this language is susceptible is that appellant did not consider itself hable under the policy, to appellee, for the loss he had sustained. The court, therefore, did not err in telling the jury that “the denial of liability by the defendant was a waiver.of proof of loss” (Yates v. Thomason, 83 Ark. 126; Dodge v. Thomason, 94 Ark. 21); nor did the court err in refusing to grant appellant’s prayer for an instruction submitting to the jury the question as to whether or not appellee had forfeited his policy by failing to furnish proof of loss. 3. The appellant’s prayer for instruction No. 6* was abstract. There was no evidence in the record to warrant such an instruction. The evidence did not show knowledge upon part of appellee of foreclosure proceedings pending at the time of, or before the loss by fire, and it did not show any change of interest, title or possession. There is no reversible error in the record and the judgment is therefore affirmed. Footnotes [6*] *6. You are instructed that there is a provision in the policy of insurance that if with the knowledge of the insured foreclosure proceedings be commenced, or if any change take place in the interest, title or possession of the subject of insurance, whether by legal process or judgment, or by voluntary act of the insured or otherwise, the entire policy shall he void. You are therefore instructed that if you believe from the evidence that the property insured, or any portion of the same was in litigation at the time of its loss, or if any change had taken place in the possession of said property, or any change in the title or interest of the plaintiff, wnether by legal process or otherwise, then your verdict will he for the defendant.