Avery v. Mechanics' Ins. Co. of Philadelphia.

• Decision Date: 09 May 1927
• Docket Number: No. 15943.,15943.
• Citation: 295 S.W. 509
• Parties: AVERY v. MECHANICS' INS. CO. OF PHILADELPHIA.
• Court: Missouri Court of Appeals

295 S.W. 509

AVERY v. MECHANICS' INS. CO. OF PHILADELPHIA.

No. 15943.

Kansas City Court of Appeals. Missouri.

May 9, 1927.

Rehearing Denied June 6, 1927.

Appeal from Circuit Court, Buchanan County; Sam Wilcox, Judge.

"Not to be officially published."

Action by John Avery against the Mechanics' Insurance Company of Philadelphia. Judgment for plaintiff, and defendant appeals. Reversed and remanded.

John S. Boyer and Crow & Newman, all of St. Joseph, for appellant.

Landis & Duncan, of St. Joseph, for respondent.

BLAND, J.

This is an action in two counts, each upon a fire insurance policy. There was a verdict and judgment in favor of plaintiff in the total sum of $800.00 together with $80.00 penalty and $350.00 attorney's fees for vexatious refusal to pay. Defendant has appealed.

The first count of the petition is upon a policy dated September 29, 1923, insuring for a period of three years a one-story frame building, with rubberoid roof, in the sum, of $500.00 and a shed in the sum of $100.00, located at 6503 Brown street, in the city of St. Joseph, Missouri. The second count covers a policy dated February 5, 1924, insuring for a period of three years in the sum of $300.00 the same house but containing no insurance on the shed. The petition alleges that plaintiff at the time of the issuance of these policies "was the owner of the house and shed mentioned in the policy." The petition further alleges that on July 24, 1924, the house and shed were totally destroyed by fire. However, plaintiff's evidence shows that the house was totally destroyed but not the shed. Each count of the petition asks for the total amount of the policy covered by it, together with the statutory penalty and attorney's fees for vexatious refusal to pay.

The amended answer pleads violations of two clauses of each policy, providing that if the insured be not the sole, absolute and unconditional owner of the property, the policy should be void, and that the entire policy should be void if the subject of the insurance be a building on ground not owned by the insured in fee simple. The answer further alleges that—

"Defendant states that at the time of the issuance of the policy and at the time of the fire plaintiff was not the owner of said real estate in fee simple and had no interest therein."

The answer further pleads that on March 27, 1925, defendant paid to the clerk of the court "the full amount of premium received by it from plaintiff, together with all the costs that had accrued to date of the payment to the clerk of the amount, and all of said amount was paid to the clerk as a tender to plaintiff."

The reply pleads that at the time plaintiff made application for the insurance he advised and notified defendant of the exact nature of his ownership of the property, stating to it that he was purchasing said property "upon a contract and that upon complying with certain conditions of said contract he would receive a warranty deed to said property." The reply further alleges that there was insurance upon the dwelling house and shed, both located upon the same tract of ground, and that the dwelling house was destroyed by fire but the shed was not destroyed, and that after defendant denied liability upon the policy, it did not demand a return of the policy for cancellation as to the remaining portion of the property insured therein; that said policy is now in force and effect upon such remaining property. The reply further alleges that on or about the 27th day of July, 1924, defendant became advised of all the circumstances and conditions surrounding the fire and that it did not tender or return to the plaintiff the premiums paid to it until the 27th day of March, 1925, and pleads a waiver and estoppel to rely upon the defenses pleaded, by reason of the knowledge of the defendant of the nature of plaintiff's ownership and its failure to cancel the policy as to the remaining portion of the property insured and on account of its failure to tender to plaintiff the premiums paid to it within a reasonable time after it refused to pay the loss.

All of the evidence in the case was introduced by plaintiff, defendant failing to introduce any evidence after its demurrer to the plaintiff's evidence was overruled.

The facts in relation to plaintiff's title show that upon May 18, 1923, one Charles Hovey entered into a written contract with John C. Landis, Jr., of St. Joseph, for the purchase of the real estate upon which the house and shed covered by the insurance were located. This contract recited that the purchase price of the property was to be $200.00, payable in monthly installments of $10.00 each; that the purchaser should pay promptly all taxes, assessments, liens and charges that should become due or be charged upon the property after the execution of the contract, and that the purchaser should keep the buildings fully insured; that the purchaser should be entitled to immediate possession of the premises as tenant of the seller and, until the deed therein mentioned was made, all payments should be taken as ground rent for the premises; that if the buyer should fail to make any payments when due or in any manner fail to keep or perform his contract, the contract should be void; that when the buyer should pay the sum of $200.00, the seller would execute and deliver to him a good and sufficient warranty deed for the premises if the terms of the contract were fully complied with; that the buyer should execute a note and deed of trust upon the premises for the unpaid purchase price "until the sum of two hundred dollars, the purchase price of said property, shall be fully paid."

The evidence shows that subsequent to the execution of the contract it was assigned by Hovey to one Biles to secure him in the furnishing of lumber that was ordered for the purpose of erecting buildings upon one of the lots mentioned in the contract, but no point is now made in reference to this matter. The assignment to Biles by Hovey was dated July 26, 1923, and an endorsement on the contract recites that on February 7, 1924, the contract was assigned to plaintiff by Hovey. The contract also recites an assignment from plaintiff to Biles, which the evidence shows was made on July 3, 1924. The assignment from plaintiff to Biles was likewise to secure the latter for lumber furnished plaintiff. Plaintiff contends that the date of the assignment appearing on the contract from Hovey to plaintiff is not the true date and we will hereinafter discuss this contention of plaintiff in connection with defendant's claim that plaintiff had no insurable interest in the property at the time the policies were issued.

The testimony further shows that after procuring the contract and possession of the house plaintiff made some improvements, lining the house and building an additional room; that he told defendant's agent, Neidorp, of this when he secured the second policy, which was taken out because the witness thought that he needed more insurance by reason of these improvements. The lumber for these changes was procured by plaintiff from Biles. Plaintiff further testified that from the time he acquired the rights under the contract of purchase for the lots mentioned therein, he had been in continuous and undisturbed possession of the property and had been making the payments as provided for by the contract; that no one other than himself had ever claimed to be the owner or entitled to possession of the property; that on July 24, 1924, the house was completely destroyed by fire, but the fire did not touch or in any way injure the frame shed on the rear of the lot which was insured for $100.00 in the first policy issued; that immediate notice of the loss was given to defendant's agent and a few days thereafter defendant's adjuster came to the place where the house had been and was informed of the nature of plaintiff's title. Shortly afterwards the defendant declined to pay the loss, denying liability on account of the condition of plaintiff's title.

Defendant insists that its demurrer to the evidence should have been sustained because the petition pleads that plaintiff was the owner of the building and that he "attempts to recover on an insurable interest in the real estate which is a fatal variance." There is no merit in this contention. If plaintiff was the owner of the contract at the time the policies of insurance were issued, he was the owner of the building within the meaning of the law although he was buying .the property on the installment plan and had not yet received a deed, the contract providing for an absolute and unconditional deed when all the purchase money was paid. Hubbard v. Ins. Co., 57 Mo. App. 1, 5.

It is insisted, however, that plaintiff failed to prove that he had any insurable interest whatever in the property at the time the policies were issued because the endorsement on the contract shows that the contract was assigned to plaintiff on February 7, 1924, while the first policy was issued on September 29, 1923, and the second on February 5, 1924. If the endorsement upon the contract is correct, then there is no question but that plaintiff had no insurable interest in the property at the time the insurance was taken out, that the policies were mere wager or gambling transactions and against public policy and no right could accrue to plaintiff thereunder, either directly or by waiver or estoppel or in any other way. White v. Ins. Co., 93 Mo. App. 282; Cooley's Briefs on the Law of Insurance, pp. 141, 143.

However, there is some parol testimony that possibly may tend to show that the endorsement upon the contract was incorrect. The facts in this connection show that the first policy was solicited by a life insurance agent whose name is not disclosed in the record. Plaintiff testified that he met this man "on the street," and he said to the witness that he had "just come from my house" and wanted to write me some life insurance. Plaintiff replied, ...