Hughes v. Insurance Company of North America

Citation59 N.W. 112,40 Neb. 626
Decision Date15 May 1894
Docket Number5633
PartiesPATRICK S. HUGHES v. INSURANCE COMPANY OF NORTH AMERICA
CourtSupreme Court of Nebraska

ERROR from the district court of Holt county. Tried below before BARTOW, J.

AFFIRMED.

H. M Uttley, for plaintiff in error.

Jacob Fawcett and F. M. Sturdevant, contra.

OPINION

See opinion for authorities upon the questions discussed.

RAGAN C.

Patrick S. Hughes sued the Insurance Company of North America in the district court on a policy of fire insurance to recover the value of a building destroyed by fire owned by sad Hughes and insured by said insurance company. At the close of the testimony the district court directed a verdict for the defendant, upon which judgment was rendered, and Hughes brings the case here on error.

The policy sued upon contained this provision: "That the having of other insurance thereon [the property], or any part thereof, valid or invalid, prior or subsequent, not made known to this company and consented to hereon, will render this policy void." The policy sued on was issued on the 19th day of June, 1880, and insured the property of Hughes for $ 800 until the 19th day of June, 1890. On the 4th day of July, 1889, Hughes procured another policy of insurance upon said property from the Phoenix Insurance Company of New York. This policy was also for $ 800 and insured the property for one year. The taking out of this second policy by Hughes was not consented to by the Insurance Company of North America, and not known to it until after the destruction by fire of the property insured in February, 1890. The defense made in the district court to this suit by the insurance company was the procuring on the insured property by Hughes of the second policy of insurance. The evidence establishes without dispute that Hughes procured the second insurance policy at the time and in the manner stated above. Is this violation by Hughes of said clause in the first insurance policy a defense for the insurance company in a suit upon the policy? We think it is. We do not think that Hughes' violation of this provision in the policy rendered the contract void, but simply voidable at the election of the insurance company. The provision is a reasonable one. It is not unconscionable nor illegal, nor is it contrary to public policy. It is a provision inserted in the policy for the benefit of the insurer and a provision which the insurance company may waive. It is designed as a check upon the disposition of the evil-minded to over-insure their property and destroy it. But where such a provision is violated by the insured it will furnish the insurance company, if it elects to avail itself of it, a complete defense to a suit for a loss under the policy brought by the insured, unless it be shown that such violation of the policy on the part of the insured was brought about through fraud or mistake, or was waived by the insurance company after it became aware thereof. In German Ins. Co. v. Heiduk, 30 Neb. 288, 46 N.W. 481, the facts were: Heiduk insured his property with the German Insurance Company. The policy provided for $ 400 of other and concurrent insurance, which Heiduk at once placed with the German Insurance Company. The policy also provided that Hughes must obtain the written consent of the German Insurance Company for all additional insurance on the insured property or he should not recover from it in case of loss. After Heiduk had placed the $ 400 of concurrent insurance permitted by the policy of the German Insurance Company, he procured the Orient Insurance Company of Hartford, Connecticut, to issue to him another policy of $ 500 on the same property insured by the German Insurance Company. The property insured was destroyed by fire, and Heiduk brought suit against the German Insurance Company on its policy. It set up as a defense the procuring by Heiduk of the additional policy from the Orient Company, in violation of the terms of the policy sued upon. This court, speaking through the present chief justice, NORVAL, held that the procuring by Heiduk of the additional insurance from the Hartford Company, in violation of the provisions of the policy he had obtained from the German Insurance Company, was a defense to that company against Heiduk's suit. The facts of the case at bar are within the principles decided in German Ins. Co. v. Heiduk, supra, and controlled by that case.

Two arguments are relied upon here by counsel for Hughes to overthrow the defense of the insurance company in this case:

1. It is said that Hughes himself did not procure the additional insurance policy from the Phoenix Company and that he did not authorize any one to procure it for him and had no knowledge of its being procured at the time it was issued. It appears from the testimony that Hughes resided on a farm near the city of O'Neill, Nebraska; that the insured property was a store building in that city, and that one Hynes was the agent of Hughes for the purpose of renting and looking after the store building. There is no evidence that Hynes had any authority from Hughes to...

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2 cases
  • Hughes v. Ins. Co. of N. Am.
    • United States
    • Supreme Court of Nebraska
    • May 15, 1894
    ...40 Neb. 62659 N.W. 112HUGHESv.INSURANCE CO. OF NORTH AMERICA.Supreme Court of Nebraska.May 15, Syllabus by the Court. [59 N.W. 112] 1. A fire insurance policy contained this clause: “That the having of other insurance thereon [the insured property], or any part thereof, valid or invalid, pr......
  • Hardin v. Sheuey
    • United States
    • Supreme Court of Nebraska
    • May 15, 1894

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