Artificial Ice Co. v. Reciprocal Exchange
| Decision Date | 25 October 1921 |
| Docket Number | 34236 |
| Citation | 184 N.W. 756,192 Iowa 1133 |
| Parties | ARTIFICIAL ICE COMPANY, Appellant, v. RECIPROCAL EXCHANGE, Appellee |
| Court | Iowa Supreme Court |
REHEARING DENIED JANUARY 17, 1922.
Appeal from Woodbury District Court.--C. C. HAMILTON, Judge.
ACTION at law, to recover upon policies of insurance. There was a trial to the court without a jury. Judgment for the defendant, and plaintiff appeals.
Reversed.
Sears Snyder & Glysteen, Vail E. Purdy, and H. C. Harper, for appellant.
Henderson Fribourg & Hatfield and D. V. Howell, for appellee.
The plaintiff is the owner of an extensive ice plant at Sioux City, Iowa. The Reciprocal Exchange, named as defendant herein, is a voluntary association of insurers, organized under the terms of Chapter 180, Acts of the Thirty-seventh General Assembly of Iowa. On June 30th, defendant issued its policy of insurance to the plaintiff on said ice plant and property for the sum of $ 11,000, for the term of one year from said date. Later, on July 31, 1918, defendant issued to plaintiff another policy of like character upon the same property for $ 13,000, for the term of one year from that date. Each policy contained a provision reading as follows:
"In consideration of the acceptance by the insured of a reduction in premiums from the established rate of . . . . per cent to 1.1222 per cent, it is agreed that the insured shall maintain insurance during the life of this policy upon the property insured to the extent of at least ninety per cent of the actual cash value thereof at the time of the loss and that failing to do so the insured shall be a co-insurer to the extent of such deficit."
Each policy also contained another clause, as follows:
In addition to this insurance, plaintiff was carrying policies in several other companies. A fire occurred on October 17, 1918, injuring or destroying the insured property to the extent of $ 30,443.77, and this action was begun by plaintiff to recover the amount or proportion of such loss or damage which is alleged to be properly chargeable to defendant.
Defendant does not deny the issuance of the policies, but rests its defense upon the proposition that such insurance had been canceled before the loss occurred. In support of its plea of cancellation of the policies, the defendant produced evidence substantially as follows: After the issuance of these policies, and prior to September 11, 1918, a representative of the defendant company visited Sioux City and, after inspection of the insured property, advised or recommended certain changes or improvements, to decrease the fire hazard; and upon his report, defendant requested or demanded that the specified improvements be made. This not meeting with a satisfactory response, the following correspondence ensued. Under date last named, defendant wrote plaintiff as follows:
On September 30, 1918, plaintiff returned said letter to the defendant, writing or indorsing thereon its answer, as follows:
Thereafter, under date of October 8, 1918, defendant addressed a letter to the plaintiff as follows:
While this letter is dated October 8, 1918, it is shown quite conclusively, and the trial court finds, that it was not mailed until October 15th and was received by plaintiff on October 16, 1918. On October 15th, defendant wrote another letter, as follows:
The foregoing communication was not received by plaintiff until October 17, 1918, the date upon which the loss occurred. On October 16th, after the receipt of the letter purporting to have been written on October 8th, the plaintiff's president phoned a message to its insurance agents in Sioux City, ordering insurance upon the ice plant to the amount of $ 24,000, and received answer that the policies therefor would be issued. At the same time, the agents, in accordance with the admitted custom or usual manner of transacting such business, issued so-called "binders" or "binding slips," by virtue of which plaintiff obtained temporary insurance for the amount named, to cover the period required for preparation of the policies. As the fire occurred on the following day, the policies thus ordered do not appear to have been delivered before the loss was suffered; but, so far as appears, none of said companies contested their liability to contribute to the indemnity. At the date of the loss, plaintiff held (including those issued by defendant) 13 policies or binders, issued by 12 different insurers, aggregating a total of $ 60,500 of insurance; or, excluding the defendant's policies, the undisputed insurance was $ 36,500. The value of the property immediately before the fire, as adjusted with the insurers other than the defendant, was $ 47,294.29, and the loss by the fire was $ 30,443.77. Within a very short time after the fire, representatives of the insurers, 11 in number, not including the defendant, met in Sioux City, and, after negotiating with plaintiff, and after having estimated the loss as above stated, undertook the preparation of a schedule of apportionment of such loss to the several companies. The defendant, insisting that its policies had been duly canceled before the fire, denied all liability for the loss, and took no part in the conferences or negotiations between the plaintiff and the other insurers. The first schedule prepared included the policies issued by defendant, estimating the contribution due from that company upon its two policies at $ 12,076.85. To this the plaintiff's president objected; because, in view of defendant's action in giving notice of a cancellation and denying all liability, plaintiff was uncertain as to its rights, and if it should finally be determined that defendant was not liable, the proposed schedule would throw upon plaintiff a loss in excess of its proper proportion as a co-insurer. This question was finally settled between the conferees as follows: A schedule was made, apportioning the loss between the 11 insurers and plaintiff, as a co-insurer; and in consideration thereof, plaintiff executed a written agreement with each of said insurers, to the effect that, if the plaintiff should succeed in enforcing its claim against the defendant, it would pay to each of said insurers a sum representing the difference between the amount of the apportioned liability to such insurer without contribution by defendant, and the proper amount of such apportionment on the basis of the validity of the disputed policies. Under the adjustment thus made, the damage or loss sustained by the plaintiff was taken at $ 30,443.77, of which plaintiff, as a co-insurer, bore $ 4,105.01, while the other insurers (not including defendant) contributed $ 26,338.76. By an amendment to the petition, plaintiff sets out said adjustment, and alleges that it is suing in this case in the interest of its co-insurers, as well as in its own.
In pleading and in argument, the appellee not only rests its defense upon the right of cancellation reserved in the insurance contract, a right which it claims to have exercised, but insists also that, as the plaintiff had acted upon the notice of cancellation and at once procured other insurance upon the property, its action constitutes a waiver of its right to the contract or statutory period of five days, and a consent to immediate cancellation. It also pleads a tender made to the plaintiff one year after this action was...
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Artificial Ice Co. v. Reciprocal Exch.
... 192 Iowa 1133 184 N.W. 756 ARTIFICIAL ICE CO. v. RECIPROCAL EXCHANGE. No. 34236. Supreme Court of Iowa. Oct. 25, 1921 ... Appeal from District Court, Woodbury County; C. C. Hamilton, Judge. Action at law to recover upon policies of insurance. There was a trial to the court without a jury. Judgment for the defendant, and plaintiff appeals. Reversed. [184 N.W ... ...