Hayward v. Fidelity-Phœnix Fire Ins. Co.

• Decision Date: 05 April 1926
• Docket Number: No. 15599.,15599.
• Citation: 285 S.W. 144
• Parties: HAYWARD v. FIDELITY-PHŒNIX FIRE INS. CO.
• Court: Missouri Court of Appeals

285 S.W. 144

HAYWARD v. FIDELITY-PHŒNIX FIRE INS. CO.

No. 15599.

Kansas City Court of Appeals. Missouri.

April 5, 1926.

Certiorari Denied June 23, 1926.

Appeal from Circuit Court, Jackson County; Willard P. Hall, Judge.

Suit by Frank Hayward against the Fidelity-Phœnix Fire Insurance Company. Judgment for plaintiff, and defendant appeals. Affirmed.

Fyke, Snyder & Hume and Crow & Newman, all of Kansas City, for appellant.

Strother, Campbell & Strother, of Kansas City, and L. T. Dryden, of Independence, for respondent.

BLAND, J.

This is a suit on a policy of fire insurance in the sum of $2,000. issued by defendant on a grain elevator located at Whitman, Mo. There was a verdict and judgment in favor of plaintiff in the sum of $2,143, and defendant has appealed.

In his petition plaintiff alleged that on February 7, 1923, defendant executed and delivered the policy of insurance sued upon to one Arch McGilvray, wherein and upon certain considerations defendant insured said McGilvray against loss or damage by fire in the sum of $2,000 "upon his elevator building, known as the Wabash elevator, * * * in the town of Whitman" (italics our), for a term to expire on February 7, 1924. It further alleged that on or about August 16, 1923, McGilvray sold and transferred the elevator building to plaintiff and assigned the policy of insurance to plaintiff, which assignment was consented to by defendant on said day, the assignment and the consent being indorsed in writing upon the policy; that on the 2d day of November, 1923, the elevator was totally destroyed by fire, resulting in a total loss of $12,000. Judgment against defendant in the sum of $2,000 was prayed.

The answer alleged that prior to the 1st day of March, 1923, McGilvray was the owner of the property, but on that day he sold the same to one H. C. Atterbury and pleaded a condition of the policy providing that the entire policy should be void should any change "take place in the interest, title or possession of the subject of insurance * * * by voluntary act of the insured or otherwise"; that Atterbury became the owner of the property by contract or deed on March 1, 1922, and continued to be the owner until August, 1923, when he sold the property to plaintiff; that thereafter, at the direction of Atterbury, McGilvray executed a deed to plaintiff, and the defendant did not at any time consent to or know of any conveyance from McGilvray to Atterbury; and that the policy was void for that reason. It is further alleged in the answer that plaintiff burned the property described in the petition. The answer further alleged that the property did not exceed in value the sum of $1,750, and that after the purchase of the property plaintiff procured additional insurance in the sum of $4,000 upon it, making a total of $9,000 of fire insurance that plaintiff believed he carried on the elevator, and that this greatly increased the hazard carried by the defendant and was a fraud upon the defendant and for that reason the policy was void. The reply was a general denial.

The testimony shows that Whitman was a "boom town" in 1918, and that it had two elevators which had been erected several years prior to 1923, and that at the latter time the boom had burst. However, there was evidence that Whitman was located in a grain country, and that the business of the elevators was not dependent upon the patronage of the town people; that on December 15, 1922, the defendant had issued policies of insurance on one of these elevators, being the one in question, to the extent of $5,000, and by renewals had that amount of insurance on the property at the time it was purchased by plaintiff on August 16, 1923, and at the time of the fire. One of these policies fell due on February 7, 1923, and was on that day renewed by the defendant; this is the policy in suit.

On December 15, 1923, McGilvray agreed in writing to sell and deliver to Atterbury the elevator in question, and from that time until August 16, 1923, when the elevator was conveyed by McGilvray to plaintiff, McGilvray was in possession thereof as tenant of Atterbury. The contract of sale recited that McGilvray agreed to convey to Atterbury the two elevators in the town of Whitman free and clear of all incumbrances in exchange for a farm owned by Atterbury; it contained the usual clause in reference to the furnishing of abstracts and time for examination of the same, and provided that the deeds should be delivered as soon as the titles were "approved." Atterbury agreed to procure a loan of $8,000 on the farm. There was another written contract had between Atterbury and McGilvray which had been lost. In this latter contract McGilvray agreed to lend Atterbury $1,500 on the elevator. There is no evidence that this loan was actually made. By the provisions of this contract the title to the elevator was to remain in McGilvray. This latter provision was made on account of the fact that Atterbury was fearful that if the insurance company knew that the elevator had come into "a trader's hands" it might cancel the insurance, so it was provided that McGilvray retain title until the elevators were sold by Atterbury, at which time McGilvray should convey them to whomever Atterbury designated. It seems that Atterbury conveyed the farm to McGilvray.

Atterbury told defendant's agent at Whitman not to notify the company of the sale of the elevators, and the agent agreed to this and did not so notify the company. No assignment of the policy in suit was made by McGilvray to Atterbury. Along in June, 1923, Atterbury commenced negotiations with plaintiff for the sale of the elevators, culminating in plaintiff's buying them for $3,500 and the deeding of them to plaintiff by McGilvray on August 16, 1923. During the negotiations between Atterbury and plaintiff. plaintiff was not informed in what capacity Atterbury was acting, whether as agent or owner of the elevators, and did not know who the actual owner was until the deal was closed, when he was informed that McGilvray held the title and would sign the deeds. After the deal was closed, Atterbury gave plaintiff the contract of December 15, 1922, between Atterbury and McGilvray. Prior to the time plaintiff purchased the elevators he did not know of the agreement between McGilvray and Atterbury concerning the sale of the elevators; of course, he knew nothing of the agreement not to notify defendant of any change in the title or possession of the elevators.

As before stated, the policy in suit was assigned by McGilvray to plaintiff on August 16, 1923, and defendant's consent to the assignment was on that day made in writing by defendant's agent at Whitman and the company immediately notified. The consent reads as follows:

"The Fidelity-Phœnix Fire Insurance Company of New York hereby consents that the interest of Arch McGilvray as owner of the property covered by this policy be assigned to Frank Hayward."

Plaintiff procured an architect to estimate the cost of rebuilding the elevators, and the latter found that it would cost $14,000 to reconstruct of new materials the one in question, and that it had depreciated in value from 5 to 10 per cent.; that the other elevator would cost $11,254 to rebuild; and that it had depreciated in value not more than 5 per cent. Plaintiff testified that in buying the two elevators he prorated the purchase price as follows $2,250 to the elevator in question and $1,250 for the other elevator. After plaintiff bought the property, he procured $4,000 additional insurance on the elevator in question, but the policy in suit expressly permitted other insurance. Defendant had no knowledge that the additional insurance had been procured. The two elevators were conveyed by separate deeds; the deed to the elevator in question recites a consideration of $6,500. and the other elevator a consideration of $5,500. Plaintiff claims that he had nothing to do with the insertion of these considerations in the deeds. Defendant's evidence tended to show to the contrary.

At the close of all the evidence, defendant offered a demurrer to the evidence, which was refused by the court. Defendant did not offer any other instructions. At the request of plaintiff, the court instructed the jury that they should find for him unless they found that plaintiff caused the elevator to be burned, and that the burden of showing this was upon defendant. Defendant complains of the giving of this...