Antell v. Pearl Assur. Co.

• Decision Date: 03 April 1958
• Docket Number: No. 37205,37205
• Citation: 252 Minn. 118,89 N.W.2d 726
• Parties: Elmer D. ANTELL, Respondent, v. PEARL ASSURANCE CO., Ltd., Appellant.
• Court: Minnesota Supreme Court

Page 726

89 N.W.2d 726

252 Minn. 118

Elmer D. ANTELL, Respondent, v.PEARL ASSURANCE CO., Ltd., Appellant.

No. 37205.

Supreme Court of Minnesota.

April 3, 1958.

Rehearing Denied April 29, 1958.

Syllabus by the Court.

1.If person has reasonable prospect of becoming owner of insurable property and in good faith takes out policy of fire insurance thereon and thereafter, before loss occurs, acquires insurable interest which subsists and time of loss, that policy is binding.

2.The record supports the trial court's findings that no statements or representations is writing had been made by plaintiff prior to or at the time of the issuance of the policy; that plaintiff did not make any attempt to defraud defendant either before or after loss; and that he duly complied with all provisions of policy respecting proof of loss.

Thomas, Bradford, King & Collatz, St. Paul, John Jenswold, Duluth, of counsel, for appellant.

A. Blake MacDonald, Duluth, Richard J. O'Brien, Minneapolis, of counsel, for respondent.

NELSON, Justice.

Elmer D. Antell brings this action to recover on a valued fire insurance policy written by defendant, Pearl Assurance Company, Ltd., insuring a house located in the Indian village of Onigum on the Leech Lake Reservation in Minnesota.The trial court ordered judgment in plaintiff's favor for the amount of the policy, and this appeal follows from the court's order denying defendant's motion for a new trial.

Since the plaintiff prevailed in the court below, our recital of the facts will be presented in the light most favorable to his position as the prevailing party.

Plaintiff is a Chippewa Indian enrollee.He is past 56 years of age and of three eighths Indian blood and has been a resident of Minneapolis, Minnesota, since 1920.Prior to the time of trial he was engaged in selling real estate.Before becoming a real estate salesman, he had been employed with the World Tool & Engineering Company for several years.Plaintiff's brother-in-law, Rev. William B. Rice, had been a resident of Onigum for a number of years.While at the home of Rev. Rice in Onigum in late 1953, plaintiff became interested in acquiring a building located in Onigum, a 2 1/2-story structure with dimensions of approximately 40 by 45 feet, commonly known as the Mercer House.Plaintiff had plans to use the building as a resort or lodge if he could move it to a suitable location in the vicinity.The Minnesota Chippewa Tribe owned the building but not the land upon which it was located.

The Minnesota Chippewa Tribe had at the time the following governmental structure: The tribe itself had its own constitution and bylaws and operated under a charter issued by the Secretary of the Interior.The governmental divisions of the tribe are known as bands.Each band operates under a charter issued under authority possessed by the Chippewa Tribe.The constitution provides that each district or band shall elect two members to act on a tribal executive committee, which is empowered to conduct the business of the tribe.Onigum village is a part of the Leech Lake Band.Under the charter issued by the Chippewa Tribe to the Leech Lake Band, it is authorized to organize its own tribal subdistricts.Four subdistricts were organized and one of these is entitled the Onigum subdistrict.Joe Vizenor occupied the position of manager of the Minnesota Chippewa Tribe and received his authority from the tribal executive committee.Joe Vizenor in whose office the tribal records were kept informed the plaintiff that the Mercer House among other buildings had been transferred to the Onigum Tribal Council, then the governing body of the Onigum subdistrict.It appears that the transfer was made by the Federal government in 1940.Being so advised, plaintiff contacted officers of the Onigum Tribal Council, who at the time were Percy Lyons, chairman; Sara Lyons, treasurer; and Rev. Rice, acting secretary.Plaintiff met with the Onigum Council late in 1953, at which time he offered to purchase the house for $300, which offer the Onigum Tribal Council later accepted.

Three sets of minutes relating to a meeting of the Onigum Tribal Council held March 8, 1954, were received by the court and each set of minutes contained a statement to the effect that plaintiff had offered to purchase the house.The first set of minutes indicates that plaintiff offered $100 for an option to purchase the house.The second set of minutes states that plaintiff offered $300 as a total purchase price, $100 in advance as earnest money with balance upon approval and acceptance, and records the council's action in approving the offer.The third set of minutes contains the statement that plaintiff had deposited $100 in advance, as a downpayment, balance to be paid upon delivery of a bill of sale, and records the action of the council in approving the plaintiff's offer.

There was offered and received in evidence by the court a check for $100 dated February 11, which plaintiff testified he gave to the Onigum Tribal Council about February 11, 1954.It was marked on its face 'Down payment on House.'This check had been endorsed by Percy Lyons, as chairman, and Rev. William B. Rice, as acting secretary.Simultaneously with the delivery of the check the council delivered the keys to the building to plaintiff.At the time the keys were delivered to plaintiff weekly meetings were being held in the building by a government clinic.It was not otherwise being used.

During the time of these negotiations plaintiff was operating a restaurant at 307 University Avenue S. E., Minneapolis.He was carrying insurance at that time with the defendant insurance company.He had obtained said insurance through a a Mr. Holmbeck who was an insurance broker.During the months of December 1953 and January 1954plaintiff had informed Mr. Holmbeck, who would stop in at his restaurant from time to time, of his intentions to establish a lodge in the Leech Lake area, and that he expected to apply for a liquor license in connection with establishing a resort business.He informed Mr. Holmbeck of his negotiations for the Mercer House and that he had bought it; that he was paying $300 for the house, but he made no suggestion to Holmbeck as to the insurable value.He did suggest that he thought the property ought to be insured for $16,000, and he furnished him with a picture.He then asked Mr. Holmbeck if he was going up there, and Mr. Holmbeck answered that he probably would, but he also added that he did not know whether one company would carry that much insurance.This statement by Mr. Holmbeck was made when they were talking about the amount of the insurance.

A fire insurance policy on the Mercer House was issued by the defendant insurance company February 18, 1954, in the form of a valued policy in the amount of $16,000.Mr. Holmbeck placed the insurable value at $20,000 and so entered it in the policy which he signed as agent.It is clear that Mr. Holmbeck who acted as agent for the Pearl Assurance Company, Ltd., did not personally inspect the property and he did not place an order to have the building examined by the Fire Inspection Bureau.It is undisputed that Mr. Holmbeck sold the insurance coverage to the plaintiff and that he became the agent of the defendant insurer in doing so.¹The plaintiff paid the insurance premium in the amount of $149.40.

That an inspection was made by the Fire Inspection Bureau is undisputed.An inspection of the Mercer House was made by the Fire Inspection Bureau in June 1954 and following this report defendant insurer, due to a reported reduction in the premium rate by the Fire Inspection Bureau, refunded to the plaintiff $54.40 from the initial premium.It is only reasonable to infer that the inspection was made pursuant to notice from some reliable source that the building had recently been insured.The evidence does not permit the inference that the plaintiff ordered such inspection.

Plaintiff abandoned his plan to use the Mercer House for a lodge or as resort property.This was due largely to his having difficulty in obtaining a liquor license.He became interested in the manufacture of miniature basketball games and considered using it for that purpose.That plan was abandoned.Later in 1954he contacted some contractors for estimates on the cost of moving the house to other land which the plaintiff could use for his own purposes.During the time the only activity carried on by plaintiff within the building was to enter it for the purpose of cleaning up the premises.January 8, 1955, plaintiff, assisted by two of his friends, began painting a section of the inside.The weather being cold, he installed a cast iron box stove making the necessary connection with the chimney.The rooms which he was painting had been used for a medical clinic.A stove had previously been used and connected with the same chimney.The next day plaintiff returned with his relpers to complete the painting.They built a fire in the stove for the second day and began painting operations during the noon hour.At 2:30 in the afternoon a neighbor informed plaintiff that the house was on fire.It was discovered in an area adjacent to the chimney.Residents of the village joined plaintiff in fighting the fire but means were not adequate in the village to combat it and the house burned to the ground in a couple of hours.

The plaintiff had not paid the balance of the purchase price when the fire occurred.He paid the balance later but received his bill of sale dated January 20, 1955, signed by Percy Lyons, as chairman, and Rev. William B. Rice, as secretary, for the Onigum Council of the Leech Lake Reservation.Percy Lyons testified that he was not the elected chairman of the council at the time of the execution and delivery of the bill of sale, but that the council had instructed him to execute the bill of sale as chairman since he occupied that position when the transaction was initiated in ...