Mississippi Home Insurance v. Barron

Mayes, J., delivered the opinion of the court. On February 12, 1907, Mrs. Barron insured her dwelling house in the Mississippi Home Insurance Company against loss by fire in the sum of $1,000. About three months after the issuance of the policy the house was destroyed by fire. Demand was made upon the company for the amount of the insurance, which they refused to pay, and on September 26th following suit was instituted to recover the amount of the policy of insurance. One of the stipulations in the policy was that the insured should furnish to the company, if required, verified plans'and specifications of any building, fixtures, or machinery destroyed or damaged. There were numerous pleas filed to the declara [726] t-ion; the main one relied upon being the failure of plaintiff to furnish plans and specifications after demand made in accordance with this stipulation in the policy. Another plea sets up the defense that plaintiff had overvalued her property, stating to the company that the dwelling was worth $1,700, and thereby obtaining an insurance for $1,000, when as a matter of fact the property was only worth $500, and that under § 2592, Code 1906, it was unlawful for the insurance company to overinsure, and therefore this policy was void. These pleas were demurred to, the demurrer sustained, and defendant declined to plead further, whereupon judgment was rendered in favor of appellee for the amount of the insurance policy, together with interest at six per cent from June 3, 1907. In the case of Milwaukee Mechanics’ Insurance Co. v. Russell, 65 Ohio St., 230; 62 N. E., 338; 56 L. R. A., 159, which is a decision on a statute very similar to this, it was held that the refusal of the insured to furnish plans and specifications in accordance with the stipulations in the contract of insurance that he should do so, constituted no defense to an action for recovery for loss. This was decided under an Ohio statute which provided that “ any person, company or association insuring any buildings or structure from loss or damage by fire,” etc., “. . . shall cause such building or structure to be examined by an agent of the insurer and a full description thereof to be made and the insurable value thereof to be fixed by such agent,” etc., . . and in case of total loss, the whole amount mentioned in the policy, or renewal upon which the insurers receive a premium, shall be paid,” etc. Ohio Rev. St. 1906, § 3643. In the case cited above the court'said: “ The stipulation for furnishing plans and specifications can be but for one purpose, and that is to enable the insurer to rebuild. If they should decide to rebuild, the only purpose of this would be to enable the insurance company, in case of total loss, to discharge the liability on the policy by the expenditure of a less sum than would be required to pay the amount of the in [727] surance named in the policy. In no other way could the company derive any benefit from the clause. If the expense of rebuilding would exceed, or even equal, the amount of the insurance mentioned, there could be neither advantage nor object on the part of the company to undergo that- trouble; and when the expense is less the performance of that condition by rebuilding the destroyed property would be but a mode of satisfying the obligation of the company, by payment of a sum less than that which became payable on the policy, according to the provisions of the statute. If the insurer could be so relieved from the operation of the statute under a condition of this kind because it is made a part of the policy, there could be no reason why he should not also have like relief, on the same ground, under the stipulation inserted in all the policies, which undertakes to limit the liability to the actual value of the property, and be permitted in all cases to prove that value to be less than the amount of the insurance in the policy, and to discharge his indebtedness thereon by the payment of such lesser amount. A possible result of this kind under any condition or agreement in the policy would conflict with the requirements of the statute and defeat its manifest purpose, which evidently was to remove from the field of controversy the amount and mode of payment of total losses.” Section 2592, Code 1906, is as much a part of this policy as if written in the face of it. Any provision in the insurance policy which conflicts with it in any way is a nullity. Under this section, an insurance company is not permitted to deny that the property insured was worth at the time of the issuance of the policy, less than the value stated in the policy, and the measure of the amount recoverable under the policy is the amount for which the property was insured. The responsibility of ascertaining the value and fixing it is placed upon the insurance company, and, when they have done so, the statute forbids them from denying that the amount of insurance named in the policy was not the true value. It is true that the statute [728] says tbat “ no insurance company shall knowingly issue any fire insurance upon property witbin this state for an amount which, together with any existing insurance thereon, exceeds the fair value of the property,” etc.; but, if the company issue their policy for a greater sum than the fair value of the property, it can be of no avail to them in order to defeat a recovery when sued for the full amount of the insurance named in the policy and for which they have accepted premiums. Assurance Co. v. Phelps, 77 Miss., 625; 27 South., 745. Any stipulation in a contract of insurance made in this state which conflicts with the duty that the company is under by virtue of § 2592, Code 1906, to pay the full amount of the policy for which the property has been insured and for which the premiums have been paid, is a nullity. Affirmed.