Dupuy v. Delaware Ins. Co. of Philadelphia

• Decision Date: 21 September 1894
• Citation: 63 F. 680
• Parties: DUPUY v. DELAWARE INS. CO. OF PHILADELPHIA.
• Court: U.S. Court of Appeals — Fourth Circuit

63 F. 680

DUPUY v. DELAWARE INS. CO. OF PHILADELPHIA.

United States Circuit Court, W.D. Virginia.

September 21, 1894

Scott &amp Staples, for plaintiff.

Peatross & Harris, for defendant.

PAUL District Judge.

This action was originally brought in the circuit court of the state of Virginia for the county of Franklin, and removed into this court upon the petition of the defendant company the plaintiff being a citizen and resident of the state of Virginia, and the defendant a corporation under the laws of the state of Pennsylvania, and having its principal office in that state. It is an action of assumpsit brought by the plaintiff upon a policy of insurance issued by the defendant on a dwelling house of the plaintiff situate in the city of Roanoke, Va. Its object is to recover damages for a loss caused by the destruction of the said dwelling house by a fire which occurred on the 14th day of October, 1892. By a stipulation between the parties, in writing, it is agreed that the issue of fact involved in this cause may be tried and determined without the intervention of a jury, a jury being expressly waived, and that the finding of the court upon the facts, whether general or special, shall have the same effect in this cause as the verdict of a jury.

The evidence, which is voluminous, discloses the case as follows On the 1st day of July, 1892, the plaintiff purchased the house and lot involved in this action from the Janette Land Company, a corporation doing business in the city of Roanoke Va. Several months prior to that date the stockholders of the said company, in general annual meeting, had passed a resolution directing the general managers of the company to offer for sale to the stockholders two houses in process of erection, with the lots on which they are situated, and to receive in payment for the same the stock of the company at 80 per cent. of its par value; the purchaser to obligate himself to complete said building or building within six months from the date of the sale according to the plans and specifications on file with the general managers of the company, the company to retain title to the property until this condition had been complied with. In accordance with this resolution the general managers of the company fixed upon July 1, 1892, as the time, and the city of Roanoke as the place, for the sale of the two houses and lots mentioned in said resolution, and gave notice thereof to the stockholders by circulars addressed and mailed to each of them; and at this sale the plaintiff being a stockholder in the said company, became the purchaser of one of the houses and lots mentioned in said resolution, and it is the same that is involved in this action. The price bid and agreed to be paid by the plaintiff for the property was $6,000, which was equivalent to $7,500 in the stock of the company. At the date of the sale there had been no scrip issued to the stockholders for the stock held by them, but the plaintiff had subscribed for, and paid the required assessments on, 37 shares, and had purchased from another stockholder 2 more shares, and was in fact the owner of 39 shares of the stock of the company, the par value of which was $3,900. In order to make up the whole of the amount which he bid and agreed to pay in the stock of the company for the property, the plaintiff purchased of Taliaferro 4 shares, and of W. P. Dupuy, plaintiff's brother, enough more to make up the total of $7,500, the amount in the stock of the company which the plaintiff bid and agreed to pay for the property. There was no writing made or signed by the plaintiff as purchaser, and no memorandum of the sale in writing at the time the sale was made. The sale was made by way of auction, and took place on the porch of the house sold. At the date of the sale the house was insured by the defendant in a policy issued by it is favor of the Janette Land Company, but, this policy having but a day or two to run, the agent of the defendant, W. P. Dupuy, immediately after the sale, and before the plaintiff had left the premises of the house where the sale took place, solicited from the plaintiff permission to insure the house as his (the plaintiff's) property, and the plaintiff agreed that the same should be done. And thereupon, on the same day, the policy formerly issued by the defendant to the Janette Land Company on the house was canceled, and a new policy issued on the said house to the plaintiff, and for a larger amount than the former policy covered. No written application was made or signed by the plaintiff for this policy, and he made no representation to the defendant as to his title to the property, or his interest in it. W. P. Dupuy, of the firm of Dupuy & Taliaferro, who were the agents of the defendant, was the auctioneer who sold the house and lot to the plaintiff. He was also a stockholder in the Janette Land Company, a director in said company, and its secretary and treasurer. He was also a member of the firm of Dupuy & Taliaferro, who were the general managers of the said company. He was fully acquainted with the condition of the property, with respect to the title and interest of parties in it, and especially with the title and interest of the Janette Land Company prior to and at the time of the sale, and with the interest of the plaintiff in the property at the time he insured it. The policy was placed, together with other papers belonging to the plaintiff, in a compartment used by him in the safe of Dupuy & Taliaferro, the agents of the defendant. It was never seen by the plaintiff until a short time before the fire occurred, when he examined it to ascertain the amount of the insurance, and the character of the roof, as described in the policy, which he did with a view of giving some information to a party with whom he was endeavoring to negotiate a sale of the property. When this policy was issued to the plaintiff, there was attached to it what is called a 'builder's permit' for the period of 30 days. A few days before this builder's permit expired by limitation, the defendant, by its same agents, issued to the plaintiff on this policy what is called a 'vacancy permit' for the period of 30 days, and agreed to renew the same every 30 days until work on the uncompleted house should be resumed, or until the plaintiff should be notified otherwise. This vacancy permit was first indorsed on the policy on the 1st day of August by W. S. Ficklen, a clerk in the office Of Dupuy & Taliaferro, the agents of the defendant, and on the 1st day of September it was renewed for the period of 30 days. But, in the latter part of September, Ficklen left the employment and office of Dupuy & Taliaferro, the agents of the defendant, and by inadvertence the renewal for another 30 days was not indorsed on the policy on the 1st of October. No notice was given to the plaintiff or to the defendant by Ficklen that such indorsement had not been made. The plaintiff and the defendant's agents both supposed that it had been made until after the fire occurred. It is further shown that on the day he purchased the property, and before leaving the premises after making the purchase, the plaintiff consulted H. H. Huggins, the architect and superintendent of the house in regard to completing the building, and that he, some time after he had made the purchase, applied for and obtained the keys of the house, and accompanied a prospective purchaser to and through the house, exhibiting the same to him, with a view of inducing him to purchase it. It is further shown that the sale of the house and lot to the plaintiff was reported to the stockholders of the Janette Land Company at their next general annual meeting by the general agents of the company, Dupuy & Taliaferro, and that the sale was ratified by the stockholders, and a deed executed, conveying the property to the plaintiff.

The action is defended on the following grounds: First. That J. A. Dupuy, the plaintiff, had no insurable interest in the property when the policy was issued, and none when the property was burned; that the policy was therefore a wagering policy, and void. Second. That the interest of the plaintiff in the property was not truly stated, and the character of the property not truly described, when the insurance was obtained, and that there was a breach of warranty in this failure, and hence the policy was avoided.

Third, That the house was insured only while occupied as a dwelling; that permission was only given, if at all, for it to remain vacant until 1st of October, 1892; that it was burned after that date, and while vacant; and that, therefore, the policy was void. It was further contended in the argument of counsel for the defendant that whereas W. P. Dupuy, the auctioneer who made the sale, was a stockholder in the vendor company, and hence part owner of the property sold; that he was also a general manager, director, secretary, and treasurer of the said company,-- therefore the sale of the property made by him, and his memorandum of such sale, were void. It is not necessary to discuss this question, so far as it relates to any memorandum of the sale made by the auctioneer, for it is conceded by counsel for the plaintiff that no memorandum in writing was made of the sale by the auctioneer at the time of the sale, or afterwards, so as to bring the sale within the requirements of the statute of frauds. The question as to the validity of a memorandum in writing made by the auctioneer is therefore eliminated form this case.

As to the other contention of the defendant, to wit, that the sale was void because the auctioneer was a stockholder, director secretary, and treasurer, and a general manager, of the company whose property he was selling, the court is of opinion that such a position is...