Interstate Fire Ins. v. Nelson

Cook, J., delivered the opinion, of the court. This action was begun in the circuit court upon two fire insurance policies — one insuring a two-story frame building, with shingle roof “and additions thereto attached,” occupied as a.hotel; the other covering the hotel and household furniture in said building. The policy covering the building permitted “thirty-five hundred dollars other insurance, warranted concurrent herewith;” the policy, covering the furniture permitted eighteen hundred dollars concurrent insurance. Both policies contain this clause: “This entire policy, unless otherwise provided by agreement indorsed hereon, or added hereto, shall be void if the insured now has or shall hereafter make or procure any other contract of insurance, whether valid, or not, on property covered in whole or in part by this policy.” No such agreement was indorsed on the policy, or added thereto, except the concurrent insurance clauses above mentioned. At the direction of the trial court, the jury returned a verdict for the plaintiff below for the full amount sued for ; hence this appeal. Appellant insists that ‘the policy covering the hotel building “and additions thereto attached” was voided by the insured procuring concurrent insurance greater than the amount authorized by the terms of the policy. Adjoining the two-story building mentioned in the policy there was located what is called by the witnesses a ‘£ sample room. ’ ’ The insured insisted that this building was not a part of the hotel, and that same was not covered by the description of the building insured, neither was it an “ addition thereto attached. ’ ’ The record shows that the “ sample room” was connected with the building, which the insured says was the building covered by the policy, by a covered board walk, or gallery;, that the walk and roof thereof was connected with both buildings. In addition to other policies written by com447 parties other than' appellant company, there was another policy which in terms covered the “sample room” alone. If the sample room was a part of the hotel, or if it was an addition attached to the hotel, the last-named policy was in violation of the concurrent insurance clause of this olicy, because, if the amount for which the sample room was insured be added to the amount for which the hotel was insured, the concurrent insurance permitted by this policy was exceeded. It appears from the undisputed evidence that the sample room was built for two purposes: (a) The lower story as a place for commercial travelers, guests of the hotel, to display their wares to prospective buyers; (b) the upper story as bedrooms for guests of the hotel. It also appears, however, that at the time of the fire, and for several months prior thereto, the upper story had been abandoned as guests’ rooms, and was being used as storage rooms. It would seem that the sample room was built and used as a part of the hotel, and that the bedrooms over the sample room had been abandoned as bedrooms and converted into storage rooms did not change this prominent and undisputed fact. It is clear from the evidence that the fire originated in the sample room, and we believe that, had it been confined to this part of the hotel, the insured could have recovered under the policy covering the two-story frame building occupied as a hotel. Again, beyond all doubt, this building was an addition to the hotel and was attached thereto. Phenix Ins. Co. v. Martin, 16 South. 417. Overinsurance encourages incendiarism and fraud, and for this reason public policy demands that contracts seeking to prevent overinsurance should be enforced, although, as in this case, there is nothing to suggest a suspicion that the loss was otherwise than an unavoidable misfortune to the owner. Northern Assurance Co. v. Grandview Association, 183 U. S. 308, 22 Sup. Ct. 133, 46 L. Ed. 213. [448] As to whether there was excessive insurance upon the fnmitnre turns upon the question: Had the Grermania policy been cancelled? The court excluded a letter written by the company’s agent touching the cancellation, and we have nothing before us save the testimony of the husband of the assured, which is not altogether clear. This witness seems to have looked after all the insurance, and he calls the policies “my policies;” no doubt assuming that what his wife owned belonged to him. There was no evidence to show he had any authority to cancel his wife’s policies, or to receive notice of cancellation; in fact, the husband and the attorneys for plaintiff treated him as the general agent of his wife, without going to the trouble of proving it. As a general rule an agency to procure insurance does not necessarily confer the power to cancel insurance. It has been held, and we think correctly, that “such an agency terminates when the insurance is procured and the policy delivered to the principal.” Cooley’s Briefs on the Law of Insurance, sections 2796, 2797, and cases there cited. The judgment below on the policy, covering the hotel building is reversed, and judgment here dismissing that count of the declaration. As to the other count, the case is reversed and remanded. Reversed and remanded.