Farmers' Mutual Fire Insurance v. Hull

Robinson, O. J., delivered the opinion of the Court. The simple question in this case, is whether the plaintiff is entitled to recover on a fire policy issued by the-' [501] •defendant, the damage sustained by him in the loss of his barn and its contents by lire. The defendant denies its liability because of the breach or forfeiture of the policy by the plaintiff. About a year before the lire, the plaintiff bought a portable steam engine, and stationed it 'within thirty feet of the rear or west eud of the barn. The engine was connected by means of a strap and pulley to a chopper inside of the barn, and was used for the purpose of chopping and threshing grain. The fire was discovered about four o’clock in the afternoon, in some fodder stacked, against the side of the barn. The plaintiff had used the engine till about one o’clock of the day of the fire, in chopping grain for his cattle, and the fire in the grate of the engine was still burning when the neighbors got to the premises. It was conceded in the argument, or, if not conceded, the use of the engine, under the circumstances, without the permission of the defendant, was beyond all question a forfeiture of the policy. Rut the plaintiff’s contention is, that the forfeiture was waived by the defendant. It was waived ho says, because the defendant subsequently, and with full knowledge of the forfeiture, levied an assessment on his premium note, and this assessment was paid by him. It has been held in some cases, and properly held, that an assessment made on a premium note with knowledge of the forfeiture of the policy and the payment of the ■assessment by the insured will be considered as an implied waiver of the forfeiture. It will be so considered because an assessment thus made is altogether inconsistent with an intention on the part of the insurer to treat the policy as being forfeited, and relying upon this implied intention, the insured was induced to pay the assessment, and which otherwise he would not have paid. The insurer cannot treat the policy as a valid [502] and binding contract for one purpose, and invalid f'or other purposes. The whole theory of implied waiver, so far as it applies to cases of this kind, is based upon some act or contract on the part of the insurer inconsistent with an intention to insist upon or claim whatever rights he-may have acquired by reason of the forfeiture, and the-insured, relying upon this implied intention, has been induced to do some act to his prejudice or injury. But it does not seem to us, that the assessment made-by the defendant, considering all the circumstances under which it was made, was in any manner inconsistent with an intention on its part to rely upon the breach or forfeiture of the policy; nor does it seem to us, that the-defendant was in any manner induced to pay the assessment upon the faith that the defendant did not mean to-rely upon such forfeiture. We are dealing with a policy issued by a mutual insurance company, the business of' which was, by its charter, confined to the limits of Carroll County. Instead of the annual payment of premiums, the defendant relied solely upon assessments to be-made upon the premium notes of its policy holders, for-the means with which to pay its losses, and such assessments were made from time to time as the necessities of the company might require. Now, before the fire in question, and before the forfeiture of the plaintiff’s policy, the defendant had become liable to other policy holders-for losses to the amount of four thousand dollars, and to pay these losses, it was necessary to make assessments-on the premium notes of .its members. Accordingly on the 19th March, 1892, an assessment of three per cent, was made on all premium notes held by the company;, the amount realized therefrom being $8,880.09. and the amount paid by plaintiff on his premium note being $9.5Y The liability of the plaintiff on his premium note for losses sustained by the defendant before the forfeiture,. [503] and its right to make an assessment thereon to pay such losses, was not and could not be questioned. So the mere fact that an assessment was made by the defendant on the premium note of the plaintiff, cannot in itself be considered as an act inconsistent with an intention on its part to rely upon the breach or forfeiture of the policy, even though the assessment was made subsequently to such forfeiture. But the argument is that the assessment made by the defendant was in excess of what was actually necessary to pay the losses for which it was liable at and before the forfeiture of plaintiff’s policy, and that this excess was used by the defendant in the payment of subsequent losses and expenses. Now, the plaintiff was not liable on his premium note it is true, for losses which occurred subsequently to the forfeiture, but the mere fact that part of the assessment made by the defendant was applied to the payment 'of such losses cannot, in itself, be held to constitute a waiver by the defendant. All the proof shows that from the time the committee, appointed to investigate as to the cause of the fire, made their report, the defendant denied all liability under the policy, and so informed the plaintiff, and denied its liability too on the ground that the fire had been caused by the use oí' the fire engine by the plaintiff in violation of the express terms of the policy. And, having the right to assess the premium note of the plaintiff to cover losses prior to the forfeiture, the fact that the assessment on the premium notes realized a sum more than was sufficient to pay such losses, cannot fairly be considered as evidence of an intention on the part of the defendant to waive the forfeiture; nor do we think it can be inferred that the plaintiff was in any manner misled by such assessment. There being no evidence, therefore, from which a jury could reasonably find a waiver of the forfeiture by the defendant, nor any evidence from which they could find [504] that the plaintiff was'misled by the acts or conduct of the defendant, we shall reverse the judgment without awarding a new trial. (Decided 20th June, 1893.) Judgment reversed, without (Hoarding a new trial.