American Insurance Co. v. Hornbarger

• Decision Date: 17 February 1908
• Citation: 108 S.W. 213,85 Ark. 337
• Parties: AMERICAN INSURANCE COMPANY v. HORNBARGER
• Court: Arkansas Supreme Court

108 S.W. 213

85 Ark. 337

AMERICAN INSURANCE COMPANY v. HORNBARGER

Supreme Court of Arkansas

February 17, 1908

Appeal from Pope Circuit Court; Hugh Basham, Judge; reversed.

Reverse and remand.

J. W. & M. House, for appellants.

1. The policy was inoperative, so long as the premium notes remained unpaid after maturity. A local agent has no power to waive suspension of a policy of insurance by reason of non-payment of notes given for the premium; and the fact of payment by the insured after the fire does not have a retroactive effect; it only revives the policy from the date of payment. 74 Ark. 507; 75 Ark. 29.

2. There was no proof of loss. The statement furnished the company was riot a compliance with the stipulations of the policy requiring a sworn proof of loss. This requirement cannot be waived by the local agent. 60 Ark. 532; 64 Ark 592; 72 Ark. 47.

The policy of insurance does not cover prospective profits. They are too speculative and remote. The policy is against direct loss by fire, 60 S.W. 395; 38 Am. Dec. 205; 4 Cooley's Brief, 3070, 3071. Other items in the claim are not covered by the policy, e. g., damages to harness and saddles, getting up horses, loss of the use of a horse, etc.

3. Testimony relative to the several waivers attempted to be proved by appellees was inadmissible, such waivers not having been pleaded. 36 P. 53; 10 L. R. A. 842; 49 N.W. 218; 36 N.W 781.

4. The court erred in admitting other testimony that was incompetent and prejudicial.

5. It was error to tax a twelve per cent. penalty upon the judgment and an attorney's fee. The statute authorizing it is unconstitutional. Art. II, §§ 3, 7, 8, 13 and 18 Const.; 49 Ark. 492; 55 Ala. 193; 60 Miss. 641; 70 Mich. 382; 77 Mich. 104; 53 Ohio St. 12; 48 L. R. A. 341; 64 L. R. A. 325; 68 P. 138.

Brooks, Hays & Martin, for appellees.

1. The agent granted the extension of time on the unpaid balance. If the act was unauthorized, the company owed the duty promptly to disaffirm it. Forfeiture was waived. 75 Ark. 98; Id. 75; 98 S.W. 694; 96 S.W. 365; Vance on Insurance, 351 et seq.; 63 Ark. 187. See also 104 S.W. 200.

2. The testimony shows that there was no objection to any of the items of the claim except as to whips and lap robes, and that the matter was turned over to the agent, Carden, for adjustment, who, in effect, told Harris that all was admitted and agreed to except those items; and thereupon Harris deducted the same from the claim. This was a settlement. 74 Ark. 72; Vance on Ins. 354. As to the objections raised now to other items of the claim, see Vance on Ins. 475; 13 Ill. 76; 99 Am. Dec. 695; 2 Am Rep. 22; 49 Me. 200; 77 Am. Dec. 608; 75 Am. Dec. 638.

3. The statute under which the twelve per cent. penalty and attorney fee were taxed is valid. 72 Ark. 357; 49 Ark. 455.

OPINION

BATTLE, J.

On the 28th of May, 1906, Mack Hornbarger and B. F. Harris, partners under the firm name of Hornbarger & Harris, commenced an action at law against American Insurance Company, of Little Rock, Arkansas. They alleged in their complaint that the defendant, "on the first of September, 1905, in consideration of the sum of $ 90, by its policy of insurance insured plaintiffs for a term of one year against loss or damage by fire or lightning, in an amount not exceeding $ 3,000, upon the following property, in the following amounts, while contained in the brick barn with iron roof, situated on the southeast corner of Russell and Jefferson streets, in the town of Russellville, Pope County, Arkansas, towit: $ 1,500 on 40 head of horses and mules; $ 100 on hay in barn; $ 1,250 on wagons, buggies and harness in barn or shed; and $ 150 on corn in barn. That on January 15, 1906, a fire broke out in the city of Russellville on Jefferson Street, and spread rapidly over every part of said city and to the place of business and property of this plaintiff, and, the danger therefrom being so apparent and real, and it bring the duty of plaintiffs, under the terms of said policy for the protection of defendant, to remove said property to a place of safety, they did so remove the same, and were damaged by said removal in the sum of $ 231. That defendant had notice of said fire under said policy, and that the plaintiffs had performed all conditions on their part, as they were required to do under said policy."

They asked for judgment for $ 231 and twelve per cent. on the amount of their loss and for attorney's fees.

The defendant answered and admitted "that on the first day of September, 1905, in consideration of the sum of $ 90, the defendant company issued a policy of insurance No. 2595, insuring the plaintiffs against loss or damage by fire and lightning for a term of one year in an amount not exceeding three thousand ($ 3,000) dollars upon the property mentioned in the complaint, but it denied that said $ 90 premium was paid in cash or paid at all, but to the contrary it stated that $ 10 of said $ 90 of premium were paid cash, the balance was to be paid in two notes of $ 40 each, one due and payable on the 1st day of October, 1905, and the other on the 1st day of November, 1903. That at the time of the fire or loss complained of there were $ 20 past due on the note which was due and payable on the first day of October, 1905, and the entire note of $ 40 due and payable on the 1st day of November, 1905, was past due and unpaid; that on each of said notes as well as in the policy, there is the following clause: 'If paid at or before maturity, all interest waived, said amount being for cash premium on my insurance this day applied for; and it is further agreed that, if this note is not paid at maturity, the whole amount of premium on said insurance shall be considered as earned and the contract null and void so long as this note remains overdue and unpaid.' That said notes and policy here referred to are made a part of this answer. That, by reason of the fact that said notes were due and unpaid at the time of the alleged loss, said policy was null and void."

Defendant "further stated that plaintiffs failed to make proof of loss as required under the policy, in that under the policy they were required to make a detailed statement, showing the amount of loss or damage, etc., which they had sustained, within thirty days; that no proof of loss of any character whatever was made to this defendant of any loss or damage occasioned by fire; that, by reason of the failure to make said proof of loss, the policy became null and void."

Defendant denied that plaintiffs lost $ 231 by reason of the fire, and that it is indebted to them in any sum whatever.

The facts, as shown by the evidence, are in part as follows: Ten dollars of the $ 90 to be paid as premium were paid at the time the policy of insurance was executed. Two notes for forty dollars each were executed by plaintiffs for the remainder, one due and payable on the first day of October, 1905, and the other on the first day of November, 1905. The notes contained the following clause: "If paid at or before maturity, all interest waived, said amount being for cash premium on my insurance this day applied for; and it is further agreed that if this note is not paid at maturity, the whole amount of premium on said insurance shall be considered earned, and the contract shall be null and void as long as this note remains overdue and unpaid."

The policy contained the following clauses:

"When a promissory note is given by the insured, for the premium charged for this policy, or any part thereof, it shall be considered payment, provided such note is paid at or before maturity, but it is expressly understood and agreed by and between the parties hereto that, should any loss or damage occur to the property herein mentioned, and the note given for the premium, or any part thereof, remain past due and unpaid, in whole or in part, at the time of such loss or damage, then this policy shall be null and void. It is expressly stipulated and agreed that any attempt by the said American Insurance Company to collect such promissory note, whether by legal proceedings or otherwise, shall not be deemed a waiver by said company of any condition of this policy."

"If fire occur, the insured shall give immediate notice of any loss thereby in writing to this company, protect the property from further damage, forthwith separate the damaged and undamaged personal property, put it in the best possible order, make a complete inventory of the same, stating the quantity and cost of each article and the amount claimed thereon; and, within thirty days after the fire, unless such time is extended in writing by this company, shall render a statement to this company, signed and sworn to by said insured, stating the knowledge and belief of the insured as to the time and origin of the fire; the interest of the insured and all others in the property, the cash value of each item thereof, and the amount of loss thereon, all incumbrances thereon," etc.

A fire occurred in the town of Russellville on the 15th of January, 1906, destroying a large part of the business portion of the town. The flames approached so close to the place of business, where the property insured at the time was, as to make it necessary to move it to places of safety. In doing so plaintiffs were damaged.

M. H. Carden and J. F. Monday were agents of the defendant at Russellville. The evidence does not show what they were authorized to do, except they had one of the premium notes for collection.

All the premium notes were due before the fire occurred, and at least a part of one was not paid until after the fire.

Harris one of the plaintiffs, testified as follows: "The last note Mr. Carden presented to me myself, and I paid $ 20 on it. I asked Mr. Carden to extend the time of...