Koontz v. Hannibal Savings & Insurance

Wagner, Judge, delivered the opinion of the court. The single point presented by the record in this case is, whether the court committed error in holding that the assured might recover the value of the personal property covered by the policy of insurance, when the policy as to the real estate was admittedly void. The_ action was instituted on a policy of insurance executed by the defendant to the plaintiff, founded up on a written application made by the assured, which, by the terms of the policy, became and formed a part of the policy itself. The written application, which constituted a part of the policy, contained the following interrogatories: <£ What is the title? ” Answer, “ Fee simple. £ ‘ Is your property encumbered ? by what ? and to what amount V* Answer, ££No. ” The application then concluded with these words: ££ The foregoing is a correct description of the property to-be insured, and a warranty on the part of the applicant on which the insurance will be predicated ; and the applicant hereby agrees to accept the policy hereon from said company, if this application be approved.55 The policy covered a livery stable, and horses and other personal property in the same, and insured the plaintiff against loss by fire which might happen, except where the fire occurred by the negligence or design of the insured. The policy was for $5,000—one thousand dollars being on the livery stable, and the balance on the personal property. The property was separately valued and appraised, and, after tho insurance attached, was all consumed by fire. The answer of the plaintiff to the [129] question concerning encumbrances was untrue, as there was a deed of trust upon the real estate at the time it was made. As the record stands, it is conceded by the plaintiff that the policy was void as to that property, and so the court below determined, but held it a valid and subéisting contract as to the other property. It is now contended by the counsel for the defendant that the contract was an entirety; that it was indivisible in its nature, and that if it was void in part it was void in whole. In the case of Curtis v. Leavitt, 15 N. Y. 9, the court, in speaking of instruments or contracts which contain some forbidden vice, or void parts, repudiate the doctrine expressed in the words, “void in part, void in toto,” and declare the general rule to be, that if the good be mixed with the bad, it shall nevertheless stand, provided a separation can be made. The exceptions are, where a statute, by its express terms, declares the whole instrument or contract void •on account of some provision which is unlawful; or where there is some all-pervading vice, such as fraud, or some unlawful act which is condemned by public policy or the common law, and avoids all parts of the transaction because all are alike infected. (1 Pars. on Cont., 5th ed., 457; Peltz v. Long, 40 Mo. 532.) The present case does not come within the exceptions above stated, though there are cases deciding that the contract of insurance, predicated - on policies like the one under consideration, is. an entire contract, unsusceptible of division, and that a breach of warranty, avoiding a part, will invalidate all. This court, however, in a case not distinguishable from the one we are now considering, has held otherwise. In Loehner et al. v. Home Mutual Ins. Co., 17 Mo. 247, it was held that although a failure to disclose an encumbrance would avoid a policy on a house insured, yet it would not avoid it as to furniture insured in the same policy, but separately appraised, unless the fact concealed was shown to be material to the risk. Where a firm obtained insurance upon a storehouse, and a stock of goods therein for a separate sum, and the interest of the insured in the house was incorrectly described, by reason of which the policy was void as to the house — in a suit brought to recover for the loss of the goods, it was decided that, in the [130] absence of proof that tbe plaintiff procured tbe insurance upon, tbe bouse for a fraudulent purpose, or that tbeir supposed interest in tbe bouse induced the defendant to insure the goods, tbe policy was not vitiated as to tbe insurance on tbe goods. (Phœnix Ins. Co. v. Lawrence et al., 4 Met., Ky., 9.) In Clark v. N. E. Mut. Fire Ins. Co., 6 Cush. 342, tbe policy contained a provision that when any of tbe property insured should be alienated, tbe policy should be void. Several pieces of property were insured in tbe same policy, though they were valued and insured separately, and one piece of property was alienated after tbe insurance was effected; it was held that this did not avoid the entire policy, but only rendered it void pro tanto. Trench v. The Chenango County Mut. Ins. Co., 7 Hill, 122, is a case in which an action was brought on tbe policy issued by tbe defendants, by which they undertook to insure tbe plaintiffs $750 on tbeir paper-mill, and tbe like sum on certain personal property therein. Tbe defense was that tbe application did not mention all tbe buildings standing within ten rods of tbe mill, agreeably to tbe following condition annexed to tbe policy: “ Such application shall contain tbe place where tbe property is situated; of what materials it is composed; its dimensions, number of chimneys, fire-places, and stoves; bow constructed; its relative situation as to other buildings ; distance Horn each if less than ten rods; for what purpose occupied; and whether the property is encumbered, by what, and to what amount; and, if the applicant has a less estate than in fee, tbe nature of tbe estate.” The application for insurance described some of tbe buildings standing within ten rods of tbe property insured, but omitted to mention others situated within that distance, and it was adjudged that tbe condition related exclusively to applications for insurance upon buildings, and, therefore, furnished no ground of defense to tbe plaintiffs’ claim respecting tbe personal property covered by tbe policy. Tbe case in Hill is very much shaken by a subsequent determination in tbe Court of Appeals, in Wilson v. The Herkimer County Mut. Ins. Co., 2 Seld. 53; and in Smith v. Empire Ins. Co., 25 Barb. 497, a contrary doctrine is held; and the case of Brown v. The People’s Mut. Ins. Co., 11 Cush [131] 280, and other cases which we have examined in Massachusetts and Maine, are in conflict with it. It will thus be seen, from the foregoing cases, that if there were no binding precedent in our own reports, we might adopt either view of the question and be well sustained by authority. Upon an examination of the application which made a part of the policy, there can be but little room for doubt that the warranty against encumbrances was intended to apply exclusively to the livery stable. The other property was separately valued and appraised, and there is nothing to show that the representation as to encumbrances on the stable formed an inducement to the execution of the policy covering the personal property. We consider the case of Lohner v. Home Mut. Ins. Co. binding authority, and we follow it cheerfully, because we regard it as in consonance with justice. Judgment will be affirmed; the other judges concurring.