Williams v. Fidelity Phœnix Fire Insurance

The opinion of the court was delivered by Burch, J.: The action was one to recover on a contract of insurance. Plaintiffs prevailed, and defendant appeals. The Hill Investment Company is an insurance agency at Arkansas City, and was defendant’s agent. Plaintiffs applied to the investment company for insurance in the sum of $32,000, on an airplane hangar, a stock of airplanes, a stock of airplane appliances and supplies, and certain tools, machinery, and equipment, leaving to the agent selection of companies and distribution of the risk among them. The oral negotiations were such that a contract of insurance was effected with defendant, and on March 22, 1921, defendant, through its agent, did issue its policy insuring the property described to the amount of $2,500, for one year. When the contract [579] was made, the agent extended credit for the pfemium, for sufficient reasons which need not be stated. The policy remained in the possession of the defendant’s agent, and on March 24, 1921, defendant instructed the agent to cancel it. On April 16, 1921, the property burned. The petition alleged that after the fire defendant concealed the fact it had issued the policy, and plaintiffs did not discover the true state of affairs with reference to the insurance on their property until November, 1921. Plaintiffs then submitted proof of loss, which was returned in a letter from defendant, stating it had no policy of insurance on the property when the fire occurred, and denying any liability to plaintiffs. An offer by plaintiffs to pay the premium was declined by defendant for the same reason. The petition pleaded tender of $50, the amount of the premium, to defendant’s agent, and offered to pay that sum or whatever the correct amount of the premium might be. The answer admitted defendant issued the policy, admitted an offer to pay the premium had been declined, and pleaded two de-fences and no more: first, cancellation by the agent pursuant to direction of defendant given the agent March 24,1921; and second, nonpayment of premium. It was not necessary for plaintiff to pay the amount of the premium into court when the petition was filed. Payment of the premium was not a condition precedent to liability on the policy, it was enough that the matter be taken care of at the trial, and the amount of the premium was deducted from the amount due on the policy. At the trial defendant proved cancellation of the policy; but to bind plaintiffs it was essential notice of cancellation should be brought home to them before the fire. To do this, defendant sought to convert its agent into an agent of plaintiffs to receive notice of cancellation. No specific instruction on the subject was requested, the issue of notice to plaintiffs of cancellation was submitted to the jury under instructions favorable to defendant, and the verdict of the jury settles the matter. Defendant now contends plaintiffs did not comply with certain conditions óf the policy. Having withheld the policy from plaintiffs after the fire, having denied all liability when plaintiffs were endeavoring to comply with the conditions of the policy, and having stood in its pleading on the fact that no contract of insurance was [580] in existence when the fire occurred, defendant is not privileged to make the contention. This observation applies to the condition limiting liability to a proportionate amount of all insurance on the property. Certain evidence offered by defendant on that subject was not pertinent to the issues, and was properly rejected. Some other propositions advanced in defendant’s brief are without substantial merit,. and the judgment of the district court is affirmed.