Aetna Ins. Co. of Hartford, Conn. v. Jeremiah

• Decision Date: 13 March 1951
• Docket Number: No. 4135-4136.,4135-4136.
• Citation: 187 F.2d 95
• Parties: AETNA INS. CO. OF HARTFORD, CONN. v. JEREMIAH et al. PROVIDENT FIRE INS. CO. v. JEREMIAH.
• Court: U.S. Court of Appeals — Tenth Circuit

187 F.2d 95 (1951)

AETNA INS. CO. OF HARTFORD, CONN. v. JEREMIAH et al. PROVIDENT FIRE INS. CO. v. JEREMIAH.

Nos. 4135-4136.

United States Court of Appeals, Tenth Circuit.

January 25, 1951.

Rehearing Denied March 13, 1951.

C. A. Ambrister, Muskogee, Okl., and Walter Hanson, Oklahoma City, Okl. (Rittenhouse, Webster, Hanson & Rittenhouse, Oklahoma City, Okl., on the brief for appellant, The Provident Fire Insurance Co.), for appellants.

Fred Green and Kelly Brown, Muskogee, Okl., for appellees.

Before HUXMAN, MURRAH and PICKETT, Circuit Judges.

PICKETT, Circuit Judge.

The Aetna Insurance Company¹ brought this declaratory judgment action to determine its liability on a fire insurance policy issued to Eurence Jeremiah on the 18th day of November, 1948. In addition to Jeremiah, Provident Fire Insurance Company,² which also had issued its policy covering the same property, and the First National Bank of Fort Smith, Arkansas, were made defendants. Jeremiah owed the First National Bank of Fort Smith, Arkansas, $1200.00 together with accrued interest, and both policies contained the standard mortgage clause in favor of the bank. When the issues were made up, the insurance companies sought to have the policies declared void by reason of fraud, misrepresentation and the obtaining of other or additional insurance prohibited by the terms of each policy. The bank sought judgment for the amount due on its loan and Jeremiah asked that the liability of the insurance companies be determined and that he have judgment against each of them in accordance with the terms of the policies. The court found both policies to be in force and effect. There being no dispute as to the value of the property destroyed, judgment was entered in favor of Jeremiah in accordance with the terms of the policies for three-fourths the value of the property. Judgment was also entered in favor of the First National Bank of Fort Smith, Arkansas, which was paid by the companies. The insurance companies have appealed. Under our view of the case we find it necessary to consider only the question presented by the provisions of the policies.

The following facts are not in dispute: Jeremiah was the owner of property located in Sequoyah County, Oklahoma, consisting of a farm house and household goods. On November 8, 1948, he made written application to the Provident for a fire insurance policy in the sum of $3,000 upon the house, $1,000 upon the household goods and $500 upon a barn to be constructed. A policy effective November 8, 1948, was issued. The delivery date of this policy is not shown but a standard mortgage clause was issued in favor of the First National Bank of Fort Smith and mailed to it on November 22, 1948, and there is no evidence that the policy was delivered to Jeremiah prior to that date.

On November 12, 1948, Jeremiah made application to the Aetna for a fire insurance policy in the amount of $3,000 upon the house and $1,000 upon the household goods. This policy was issued and delivered to Jeremiah on the 13th day of November, 1948. On January 28, 1949, the house and the household goods were destroyed by fire of unknown origin. Due proof of the loss and claim was made upon both the Aetna and the Provident. Each company denied liability on these claims. The policies were written on the standard form policy provided for in Title 36, O.S.A. § 244.1 effective January 1, 1946. This section repealed former Sec. 244 of the statute. The statutory policy contained this provision: "Other insurance may be prohibited or the amount of insurance may be limited by endorsement attached hereto." The uniform standard farm property form authorized by Sec. 245, 36 O.S.A. § 245 was attached to and became a part of the policies and contained this provision: "Other insurance prohibited unless written consent by the company is endorsed hereon." It is admitted that at the time of the loss no consent had been granted for additional insurance and there was no endorsement on either policy granting permission for additional insurance.

The companies contend that the provision in each policy prohibits additional insurance and that this prohibition is an express warranty by the insured that no other insurance will be taken out. Generally, fire insurance policies provide against the existence of procuring of additional insurance upon the same property without the consent of the company. Courts have held such provisions reasonable and valid upon the ground that concurrent policies on the same property tend toward carelessness and fraud. Northern Assurance Co. v. Grand View Building Association, 183 U.S. 308, 22 S.Ct. 133, 46 L.Ed. 213; Booth v. Concordia Fire Ins. Co., 4 Cir., 30 F.2d 20; Dubuque Fire & Marine Insurance Co. v. Reynolds Co., Inc., 5 Cir., 128 F.2d 665; Merchants & Planters Insurance Co. v. Marsh, 34 Okl. 453, 125 P. 1100, 42 L.R.A., N.S., 996; Western Nat. Ins. Co. v. Marsh, 34 Okl. 414, 125 P. 1094, 42 L.R.A.,N.S., 991; Cherewaty v. Grangers Mutual Fire Insurance Co., 181 Md. 149, 28 A.2d 824, 143 A.L.R. 421; Walker v. Queen Insurance Co., 136 S.C. 144, 134 S.E. 263, 52 A. L.R. 259; Filipkowski v. Springfield Fire & Marine Ins. Co., 206 Wis. 39, 238 N.W. 828, 78 A.L.R. 613; 29 Am.Jur., Insurance, paragraph 731; 45 C.J.S., Insurance, § 638, p. 533.

The trial court took the view, and it is urged here, that the above rule is inapplicable because the policies were not by their terms declared void or that there would be no liability on them if additional insurance was obtained. It relied upon recent changes in the Oklahoma statute. Prior to January 1, 1946, the statutory fire insurance policy for Oklahoma contained this provision: "This entire policy, unless otherwise provided by agreement endorsed 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". 36 O.S.A. 244. We find no real difference in the provisions of the two statutes nor any legislative intent to limit the right of insurance companies to contract as to additional insurance. The old statute contained an absolute prohibition unless the consent was endorsed on the policy; the new form requires that the prohibition or limitation be endorsed, the...