Allesina v. London & L. & G. Ins. Co.

• Decision Date: 31 October 1904
• Parties: ALLESINA v. LONDON & L. & G. INS. CO.
• Court: Oregon Supreme Court

78 P. 392

45 Or. 441

ALLESINA v. LONDON & L. & G. INS. CO.

Supreme Court of Oregon

October 31, 1904

Appeal from Circuit Court, Multnomah County; Arthur L. Frazer Judge.

Action by John Allesina against the London & Liverpool & Globe Insurance Company. From a judgment in favor of plaintiff defendant appeals. Affirmed.

Van Ness & Redman, Teal & Minor, and W.C. Bristol, for appellant.

Henry E. McGinn, for respondent.

BEAN J.

This is an action on a policy issued by the defendant to plaintiff on April 28, 1903, insuring against loss or damage by fire to the amount of $2,000, on his stock of umbrellas, parasols and the material used in making the same. At the time the contract of insurance was made the property was covered by a chattel mortgage. The policy, however, that defendant issued and delivered to plaintiff, contained a printed clause that it should be void "if the subject of insurance be personal property, and be or become incumbered by a chattel mortgage." This policy was issued upon an oral application, the agent of defendant making no inquiry of plaintiff concerning liens or incumbrances on the property nor were any statements or representations in reference thereto made by the assured, and he had no knowledge that such information was material, or that the policy to be subsequently delivered would contain any provision in reference thereto; or that, if the defendant knew of the mortgage, it would decline the risk. The plaintiff paid, and the defendant received and accepted, the premium, and the property was destroyed by fire during the life of the policy. The only question on this appeal is whether, under these circumstances, the defendant can defeat a recovery on the ground that the policy issued by it and delivered to the plaintiff, and for which he paid, and it accepted and retained his money, was invalid from the beginning because of the mortgage clause.

The decision of this court in Arthur v. Palatine Ins. Co., 35 Or. 27, 57 P. 62, 76 Am.St.Rep. 450, is admittedly against the defendant's contention, but its soundness is challenged, and we are urged to overrule it. The question involved was examined in the light of the authorities at the time the Arthur Case was decided. The court was then agreed that the rule therein announced is the better one; and, notwithstanding the able and learned argument of counsel for the defendant, it is not now disposed to change its view. The adjudicated cases upon the point are conflicting and irreconcilable. 16 Am. & Eng.Enc.Law (2d Ed.) 936. By some courts it is held that the policy of insurance as issued and delivered contains the terms of the contract between the parties, and that force and effect must be given to every clause and provision therein, even though the result may be contrary to the intention of the parties and render the contract void from the beginning. Counsel for the defendant, in support of their contention, cite the following authorities: Security, etc., Ins. Co. v. Gober, 50 Ga. 404; Indiana Ins. Co. v. Pringle, 21 Ind.App. 559, 52 N.E. 821; Shaffer v. Milwaukee Ins. Co., 17 Ind.App. 205, 46 N.E. 557; Crikelair v. Citizens' Ins. Co., 168 Ill. 309, 48 N.E. 167, 61 Am.St.Rep. 119; Dwelling House Ins. Co. v. Shaner, 52 Ill.App. 326; Baldwin v. German Ins. Co., 105 Iowa, 379, 75 N.W. 326; Cagle v. Ins. Co., 78 Mo.App. 215; Cleaver v. Ins. Co., 71 Mich. 414, 39 N.W. 571, 15 Am.St.Rep. 275; Quinlan v. Ins. Co., 133 N.Y. 356, 31 N.E. 31, 28 Am.St.Rep. 645; Susquehanna Ins. Co. v. Swank, 102 Pa. 17; Hayes v. United States Fire Ins. Co., 132 N.C. 702, 44 S.E. 404; AEtna Ins. Co v. Holcomb, 89 Tex. 404, 34 S.W. 915; Ins.Co. of North America v. Wicker, 93 Tex. 390, 55 S.W. 740; Morrison v. Home Ins. Co., 69 Tex. 353, 6 S.W. 605, 5 Am.St.Rep. 63; Guinn v. Phoenix Ins. Co. (Tex.Civ.App.) 31 S.W. 566; Curlee v. Texas Home Ins. Co., 73 S.W. 831, 31 Tex.Civ.App. 471; Tyree v. Virginia F. & M. Ins. Co. (W.Va.) 46 S.E. 706; Wilcox v. Continental Ins. Co., 85 Wis. 193, 55 N.W. 188; Union Mut. Ins. Co. v. Mowry, 96 U.S. 544, 24 L.Ed. 674; Atlas, etc., Co. v. New Zealand Ins. Co. (C.C.) 121 F. 929; New York Ins. Co. v. McMaster, 87 F. 63, 30 C.C.A. 552.

Of the citations given, the only ones directly in point are those from Illinois, Wisconsin, Texas, and the 17th Indiana Appellate Court. In the cases cited from Iowa and the 21st Indiana Appellate, the courts were construing policies containing a provision requiring the assured, if the property was incumbered, to report that fact to the company, otherwise the policy should be void; and it was held that a failure of the agent to inquire about incumbrances did not excuse the assured from complying with this clause in the contract. The Illinois appeal case has reference to the admission of parol evidence to show that, at the time of the insurance, the company's agent consented that the assured might thereafter mortgage the property, notwithstanding the policy contained a stipulation rendering the contract void if the property should become incumbered without the written consent of the company. In the cases from Missouri and North Carolina, the policies were issued upon written applications which did not disclose an unsatisfied mortgage. The other cases go to the point that an agent of the company unless authorized to do so, cannot waive a condition of the policy, and that the insured is charged with knowledge of the contents of a policy which has been delivered to and accepted by him. The courts in Nebraska, Kentucky, Montana, Mississippi, and the Indiana Appellate Court have all held that when an insurance company issues a policy covering mortgaged property, without a written application, and without making any inquiry as to incumbrances, accepts and retains the premium, without any...