Petranek v. Bohemian Farmers' Mutual Insurance

GATES, J. The sole question t presented by this appeal is whether the giving of a mortgage upon real property, without the knowledge or consent of an insurer against loss by fire, avoided the insurance policy which was in the standard form prescribed by section 9199, Rev. Code 1919. More specifically, the question is whether the giving of the mortgage amounted to an increase of hazard within the meaning of that portion of said section which provides: “This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void, if * * * the hazard be increased by any means within the control or knowledge of the insured.” From a judgment favorable to the defendant insurer, the plaintiff, the insured, appeals. In Lawver v. Globe Mut. Ins. Co., 25 S. D. 549, 127 N. W. 615, this court construed the then standard form of fire insurance policy, viz., section 2, c. 126, Laws 1905, which provided: “This policy shall be void * * * if without such assent the situation or conditions affecting the insured property shall be altered so as to materially increase the hazard, if such increase of hazard be occasioned by the act or agency of the insured.” It was there held that the giving of a mortgage upon the property increased the hazard as a matter of law. [1] 'Perhaps the meaning of the above quotations is not materially different if those provisions were the only ones which throw light upon the legislative intent in the adoption, of the standard form of fire insurance policy, but the Legislature of 1909 materially altered the standard form of fire policy .as it appeared in the act of 1905, and made it read as it now appears in Rev. Code 1919, § 9199. In that section there are two clauses by which the policy is avoided, which were not in the act of 1905, viz.: [552] “If the subject of insurance be personal property and be or become incumbered :by a chattel mortgage.” “If with the knowledge of the insured, foreclosure proceedings be commenced or notice given of sale of anjr property covered by this policy by virtue of any mortgage or trust deed.” Considering all of the clauses of the present standard form of policy together and applying the rule, “Expressio uni us est ex-clusio alterius,” we think it clear that the Legislature intended that the giving of a mortgage upon real property without the permission of the insurer would not necessarily avoid the policy, while the giving of a chattel mortgage upon personal property would do so, and that in the case of real property it is only the beginning of foreclosure proceedings, within the knowledge of the insured, that would necessarily avoid the policy. •For these reasons we conclude that the decision in Lawver v. Globe Mut. Ins. Co., supra, is not applicable to the present form of standard fire insurance policy. [2] Under the present form of standard policy, we are of the opinion that the question whether the giving of a mortgage on real property increases the hazard is a question of fact for the jury to determine. Crittenden v. Springfield R. & M. Ins. Co., 85 Iowa, 652, 52 N. W. 548, 39 Am. St. Rep. 321; Collins v. Merch. & Bankers’ Mut. Ins. Co., 95 Iowa, 540, 64 N. W. 602, 58 Am. St. Rep. 438; Tiefenthal v. Citizens’ Mut. Fire Ins. Co., 53 Mich. 306, 19 N. W. 9; Clark v. Union, etc., Ins. Co., 40 N. H. 333, 77 Am. Dec. 721. A mortgage small in amount ■ relative to the value of the insured property might not increase the hazard, while a mortgage for the approximate value of the insured property might increase it. Other circumstances either with or without the consideration of the amount of the mortgage, might influence the determination of the question of fact. For the error of the trial court in determining as a matter of law that the giving of the mortgages increased the hazard, the judgment appealed from must be reversed, and' the cause remanded for a new trial. It will be so ordered. SMITH and McCO'Y, JJ., not sitting.