Am. Alliance Ins. Co v. Pyle

• Decision Date: 13 March 1940
• Docket Number: No. 27896.,27896.
• Citation: 8 S.E.2d 154
• Parties: AMERICAN ALLIANCE INS. CO. v. PYLE.
• Court: Georgia Court of Appeals

8 S.E.2d 154

AMERICAN ALLIANCE INS. CO.

v.PYLE.

No. 27896.

Court of Appeals of Georgia,

Division No. 2.

March 13, 1940.

Judgment adhered to on Rehearing March 30, 1940.

Syllabus by the Court.

1. A plea by the defendant, in a suit to recover a loss under a fire insurance policy, alleging in effect that the vacation as a dwelling by the assured of the insured premises, and the illicit sale in the insured dwelling of liquor under the direction of the assured's wife and with his knowledge and

consent, constituted an increase in the risk and rendered the policy void, was improperly stricken by the court on general demurrer.

2. Where an insurance company seeks to defend a suit on a fire insurance policy because of the "gross negligence" of the assured, it must appear that such conduct or acts of the assured tended to materially increase the risk and to cause the damage complained of.

3. The amendment to the defendant's plea, alleging that the plaintiff "procured" the fire which destroyed the insured property, was subject to special demurrer.

4. Provisions in a policy of fire insurance, that the policy shall be void "in the case of any fraud or false swearing by the insured touching any matter relating to this insurance or the subject thereof, whether before or after the loss, " are violated where it appears that the assured, with the intention and for the purpose of defrauding the insurer, deposed falsely, in an affidavit submitted to the insurer prior to any action against it on the policy, as to the cost of the insured property.

5. A general assignment of error in exceptions pendente lite that the court erred in sustaining the plaintiff's demurrers to the defendant's first, second, third and fourth amendments, is sufficient for consideration, the record containing four amendments of the defendant to its answer, together with the plaintiff's demurrers thereto.

6. Where exceptions pendente lite, dated May 5, 1939, certified by the trial judge, and filed May 6, 1939, recite that the plaintiff's demurrers were sustained at the April term of the court, it will be presumed, nothing to the contrary appearing, that the April term of the court referred to was the April Term 1939, and where the April Term 1939 of the court commenced on April 10, 1939, It appears that the ruling complained of was necessarily rendered between April 10, 1939 and May 5, 1939, and that the exceptions pendente lite were tendered and filed within the time provided by law.

Error from Superior Court, Floyd County; C. H. Porter, Judge.

Action by M. C Pyle against the American Alliance Insurance Company on two fire insurance policies. Judgment for plaintiff and defendant brings error.

Reversed.

On Nov. 19, 1938, M. C. Pyle brought suit against the American Alliance Insurance Company to recover upon two fire insurance policies issued to him on July 8, 1938 by the defendant, one for $1,000 insuring a described dwelling house for one year from date, and the other for $800 insuring for the same period of time the household effects in the dwelling house. The plaintiff alleged that the house and the furniture therein were destroyed by a fire on July 18, 1938, that notice, proof of loss and demand for payment were properly and duly made and that the defendant had failed and refused to pay any sum whatsoever on said policies, which refusal to pay was in bad faith and without any just or legal cause. The plaintiff sought to recover 25 per cent damages, together with $500 as reasonable attorney's fees in addition to the full amount of the policies. Attached to the petition was a copy of the policy covering the dwelling house, which provided that $1,000 fire and lightning insurance was "on the one story frame dwelling, with composition roof, occupied by the owner as a dwelling house * * * situate No. 108 on the south side of Spurlock Alley Street" in Rome, Georgia. Also attached to the petition was the policy covering the household furniture which provided that such household furniture was insured while contained in the dwelling house of the insured at No. 108 on the south side of Spurlock Alley Street in Rome. The defendant answered and denied liability. By an amendment to its answer the defendant alleged that both insurance policies were issued by it and accepted by the plaintiff to cover the property insured while occupied and used as dwelling and the rate charged in the premium was based upon the property being used only for a dwelling house, that subsequent to the issuance of the policies the insured house was vacated by the assured and his family as a dwelling and neither the plaintiff nor his family were occupying the premises on "July 8, 1938" [presumably July 18, 1938], but the premises were being used for the purpose of illegally selling and dispensing liquor all without the defendant's consent and such use of the premises for purposes other than these stated in the policy constituted an increase in the hazard thereby voiding the policy, that the policies further provided "this entire policy shall be void * * in the case of any fraud or false swearing by the insured touching any matter relating to this insurance or the subject matter thereof whether before or after the loss." that on August 17, 1938 the defendant received an affidavit sworn to by the plaintiff under date of August 10, 1938 before a notary public in which the plaintiff swore that the cost of the property insured under the furniture policy was $971.04, that the defendant denies the cost of the property and of each and every item thereof as set forth in the affidavit and denies that the total amounts to $971.04 but alleges that this sworn statement was made by the plaintiff falsely and with intent to defraud it, that on April 8, 1939 the plaintiff testified under oath before a court commissioner that the cost of the insured household effects was as set out in the affidavit of August 10 and the defendant denies that the cost of the property and each and every item thereof was as set forth in the above affidavit but alleges that the statements made under oath by the plaintiff were made falsely and with intent to defraud the defendant and that such false swearing constitutes a violation of the above quoted provision in the policies, that on April 8, 1939 the plaintiff testified before a court commissioner as to the cost of materials used in the construction and repair of the insured dwelling house which testimony was made falsely and with intent to defraud the defendant, that on April 8, 1939 the plaintiff testified under oath before a court commissioner that neither he nor his wife were engaged in the business of selling illegal liquor nor were they or either of them so engaged on July 8, 1938 or prior thereto nor were the premises or house located at 108 Spurlock Alley in Rome used for illegally selling liquor on "July 8, 1938" or prior thereto, and this testimony of the plaintiff was wilfully, falsely and fraudulently made, with the intent to injure and defraud the defendant.

On the same day the defendant filed another amendment to its answer and alleged that the house and the furniture insured were destroyed by a fire which was "procured" by the plaintiff and "hence defendant is not indebted to plaintiff in any amount whatsoever."

On the same day by another amendment to its answer the defendant alleged that the policies of insurance involved in this suit covered the building and furniture therein while the building was occupied by the owner as a dwelling house and therate of premium charged was the rate applicable to dwelling houses and furniture, being thirty six cents per one hundred dollars of insurance, that after the policy and after the renewal of the original policy were taken out by the plaintiff the property ceased to be used as a dwelling house but was used for the retail sale of liquor illegally, that the sale of liquor was conducted under the directions of the plaintiff's wife who was in charge of the property by the specific direction and approval of the plaintiff, that the use of the premises for the retail sale of liquor continued both day and night and by reason of such use the coming and going of customers for buying liquor, "the night as well as the day use, the nature of the business, the illegal character of said business, the vacation from the premises by the owners of the premises and the leaving of another person, to wit, J. E. Andrews, in the charge of said property, all contributed to increase the hazard insured against" and that by reason of such acts the policies are void.

On the same day the defendant filed a fourth amendment to its answer and alleged that it was in good faith in refusing to pay the loss because the fire was of incendiary origin and there was contained in the house at the time of its burning a can of gasoline or kerosene, or other inflammable substance which was placed there between the time "it was boarded and locked up" by the plaintiff's wife and the time the fire occurred, that the plaintiff's wife was in control of the property by the specific direction and authority of her husband, that the plaintiff was grossly negligent in permitting the can of inflammable material to be carried into the house and in permitting the house to be left in the control of Andrews, who was not employed by or subject to the control of the plaintiff or his wife, and in permitting the carrying on in the house of an illicit liquor business and that by reason of such acts of gross negligence on the part of the plaintiff the defendant is not liable to the plaintiff in any sum whatsoever.

The plaintiff demurred to the answer as amended and to the amendments upon the ground that the allegations thereof did not set forth any defense to the policies sued on, that it did not appear therein in what way the risk or hazard insured against would be increased by the alleged acts of the plaintiff in the vacation of the premises and the illegal sale of liquor thereon, that it...