Geraghty v. Washtenaw Mutual Fire-Insurance

Ostrander, J. (after stating the facts). The question is not whether the identical property which was destroyed was insurable by defendant if it was upon a farm and used as farm property, because it is conceded that it was not upon a farm nor used in. any way in connection with a farm or with farming. Kept in a building rented and used for a slaughterhouse, and a part of the paraphernalia of the business of slaughtering there carried on, it was not, in fact, property such as, under the statute referred to, the defendant had the right to insure. [638] Aside from a contention raised by the defendant that plaintiff should have submitted his demand to arbitrators, the case of the appellant in this court is made to rest, as we understand the brief, upon the testimony, either offered ;and rejected or offered and received, tending to show that the president of the company knew what property plaintiff desired to have insured and with that knowledge took the application, making it out himself, and issued the policy ; that the same property, or property in the same building, had been before insured in defendant company; that after the fire the president of the company had admitted that he always knew that it was a slaughterhouse, and that by accepting the application, when the director and president of the defendant knew that the building in which the property was situated was a slaughterhouse, .and receiving assessments from the plaintiff for two years, the defendant is estopped to deny liability; that, in any event, the testimony should have been submitted to the jury with proper instructions. The testimony offered for the plaintiff does not tend to prove that he acquainted the president of the company at the time of making his application with the fact that he was carrying on at the place in question the business of slaughtering animals, or that the property which was sought to be insured was used in carrying on said business. Nor does it appear that the president of the company knew that the property which plaintiff desired to have insured was, in its use or otherwise, property not insur.able by the company. . But, admitting that if defendant was a stock company, authorized to carry on, generally, the business of fire insurance, the testimony was sufficient to require the case to be submitted to a jury to determine whether the company was estopped to deny liability, it does not follow that the court below committed error. Defendant is not authorized to insure any and all personal property, but to insure certain classes of personal property, “being upon farms as farm property.” In form, the contract of insurance described property insurable by de. [639] fendant. No such property was destroyed. A contract insuring the risk which plaintiff claims was actually covered, the defendant company could not lawfully make. Plaintiff was hound to know this. He was both insurer and insured. As contract holder, he is presumed to have knowledge of the terms of his contract, and as member of the defendant company, to have knowledge of its powers. In Eddy v. Insurance Co., 72 Mich. 651, it appeared that the business of the company was, by the act of incorporation, restricted to certain territory. An amendment to the statute removed the territorial restrictions. The amendatory law was held to be invalid. A risk taken upon property outside the original territorial limits of business, during the time the amendatory statute was ^supposed to be in force, was held to be void as one which the company had no power to assume, although the company received and retained a premium of 1100, and was, upon the facts, otherwise liable. It has been held that where a statute prohibits mutual companies from insuring property not owned by members of the company, regular members were not estopped by having received the benefit of insurance to deny liability to assessment to pay losses on policies issued by the company to nonmembers of which they had no knowledge. Corey v. Sherman, 96 Iowa, 114 (32 L. R. A. 490). So, where mutual companies were forbidden to insure one not a member or to receive premiums, it was held that a policy, issued to one not a member and who paid a' premium, was void, and that the company was not estopped to plead that the contract was ultra vires, since the insured was presumed to know that the contract was prohibited. In re Assignment of Mutual Guaranty Fire-Ins. Co., 107 Iowa, 143. And see, generally, 21 Am. & Eng. Enc. Law (2d Ed.), pp. 267, 268. The judgment is affirmed. Grant and Blair, JJ., concurred with Ostrander, J.