Bardwell v. Commercial Union Assur. Co., Ltd.

• Court: Vermont Supreme Court
• Writing for the Court: GRAHAM, J.
• Citation: Bardwell v. Commercial Union Assur. Co., Ltd., 105 Vt. 106, 163 A. 633 (Vt. 1933)
• Decision Date: 04 January 1933
• Parties: BARDWELL et al. v. COMMERCIAL UNION ASSUR. CO., Limited.

163 A. 633

BARDWELL et al.

v. COMMERCIAL UNION ASSUR. CO., Limited.

Supreme Court of Vermont. Essex.

Jan. 4, 1933.

Exceptions from Essex County Court; Allen R. Sturtevant, Judge.

Action by Ned Bardwell and others against the Commercial Union Assurance Company, Limited. Judgment for plaintiffs, and defendant brings exceptions.

Affirmed.

Argued before POWERS, C. J., and SLACK, MOULTON, THOMPSON, and GRAHAM, JJ.

Searles & Graves, of St. Johnsbury, Leon D. Ripley, of Colebrook, N. H., and Clarence A. Warren, of Boston, Mass., for plaintiffs.

Shields & Conant, of St. Johnsbury, and Thorp & Branch, of Manchester, N. H., for defendant.

GRAHAM, J.

This action is brought on an insurance policy. The plaintiff Bardwell is named as the insured in the policy, and by rider attached the loss is made payable to Farmers' & Traders' National Bank of Colebrook, N. H., and H. C. Taylor, plaintiffs herein, "as mortgagee as interest may appear." Seven other actions were brought by these plaintiffs on separate insurance policies. The cases were tried together by the court, and, on the findings of fact, judgment was rendered for the plaintiffs in each case. The cases are before us on defendants' bill of exceptions, which presents the same questions in each case, and in the discussion of these questions the cases are treated as one. An action by these plaintiffs based upon another policy is now ponding in Washington county court, which, by stipulation of the parties, is to abide the result of these cases.

The property named in all the policies was a dance pavilion with restaurant attached, situated at Lemington, Vt., and known as the "Bluebird." The property was totally destroyed by fire on September 17, 1931.

On August 5, 1931, Taylor, a former owner, sold the property to one Mike Husson, but the deed named Ned Bardwell of Lowell, Mass., a cousin of Husson's, as grantee. The conveyance was thus made at the direction of Husson and "for business reasons." As part of the purchase price, Taylor received a note for $7,500, which was secured by a mortgage on the premises. The note and mortgage were executed by Bardwell, but the court expressly finds that "Bardwell paid no part of the purchase price for said property and bad no real interest therein, although he was given the legal title to same by being named as grantee in the deed. * * * Said Husson furnished the money to finance the purchase of this property and was the equitable owner of the same."

The insurance was issued in two groups or sets of policies (the first group consists of four policies, dated August 8, 1931, and amounts to $7,500; the second group consists of five policies, dated August 22, 1931, and amounts to $7,500), and was procured by Husson through one F. E. Marshall of Colebrook, N. H., who was an insurance broker, and the holder of a broker's license issued by the insurance department of this state. Marshall placed the insurance through Morrill & Hawkinson, agents of the defendant companies in St. Johnsbury, Vt. Marshall was informed as to the facts of ownership, but, after an examination of the deed, he informed Taylor and Husson that, the title being in Bardwell, the insurance should be taken in his name. Neither Taylor nor Husson gave any instructions to Marshall about how the policies should be written. These matters were left to him. The insurance provided by the first set of policies was ordered by Marshall by letter to Morrill & Hawkinson, dated August 8, 1931, which did not disclose the facts of ownership which had been communicated to him, but in which he stated: "Insurance to be written in the name of Ned Bardwell payable to H. C. Taylor, mortgagee." The insurance provided by the second set of policies was requested by Marshall by letter to the same agents, dated August 19, 1931, in which he asked them to issue additional policies amounting to $7,500 to cover the same property "in the name of Ned Bardwell, payable in case of loss to H. C. Taylor as his interest may appear."

The court failed to find essential facts shown by the exhibits, including the policies in suit; it made the facts shown by the exhibits a part of the findings only by reference. We have repeatedly held that the findings cannot be supplemented in this manner. Powell v. Merrill, 92 Vt. 124, 130, 103 A. 259; Hooper, Tr. v. Kennedy, 100 Vt. 376, 378, 138 A. 778; People's Nat. Bank v. Brunelle, 101 Vt. 42, 45, 140 A. 160; Firestone Tire & Rubber Co. v. Hart's Estate, 104 Vt. 100, 104, 158 A. 90, 92; Louden Machinery Co. v. Day (Vt.) 162 A. 370. But, to save a reversal for this omission, counsel upon argument conceded that all facts shown by the exhibits might be taken by us as facts found. That the real merits of the questions argued may be decided, we shall so treat and consider those facts.

The policy in each case contained the following provision: "This policy is made and accepted subject to the foregoing stipulations and conditions, and to the stipulations and conditions printed on the back hereof, which are hereby made a part of this policy, together with such other provisions, stipulations and conditions as may be endorsed hereon or added hereto as herein provided."

One of the provisions printed on the back of the policy and made a part thereof was the following: "This entire policy shall be void, unless otherwise provided by agreement in writing added hereto, (a) if the interest of the insured be other than unconditional and sole ownership."

The policy also contained the following provision: "This policy shall be void if the insured has concealed or misrepresented any material fact or circumstance concerning this insurance or the subject thereof."

The defendants have pleaded as a defense to liability (a) that the ownership of the insured was other than "unconditional and sole," and therefore the policies were void; and (b) that there was misrepresentation and fraud concerning the business and financial status of Bardwell, and also in representing the Farmers' & Traders' National Bank as a mortgagee. The plaintiffs by their replications denied these allegations, and claimed that the defendants have been fully informed as to the facts, and therefore the forfeiture provisions of the policies had been waived and the defendants were estopped from asserting them.

The defendants bring the cases before us on exceptions to the findings of the court, and to the failure of the court to find as requested. These exceptions are numerous, and many of them raise the same questions, though stated in different form. Since their validity depends upon our holding on three main phases of the case, they may be grouped for convenience and brevity according to subject-matter as follows: (1) To the finding of the court as to conversations of Marshall with defendants' agents; (2) to the failure of the court to find the status of Marshall as an insurance broker, that, when acting as such, he was the agent of the plaintiffs, and that reliance was placed by defendants upon his representations; and (3) to the failure of the court to find the true status of the bank with respect to its interest in the subject-matter of the insurance, and lack of knowledge of defendants that the bank was not a mortgagee.

The condition in the policy as to "sole and unconditional" ownership means that no other person has any interest in the property as owner, and the quality of the estate is not limited or affected by any condition; that the interest of the insured is completely vested and of such a nature that he alone will sustain the entire loss if the property is destroyed. 26 C. J. 172, 173; Rochester German Ins. Co. v. Schmidt, 162 F. 447, 451, 89 C. C. A. 333; 2 Clement on Insurance, p. 152; Hartford Fire Ins. Co. v. Keating, 86 Md. 130, 38 A. 29, 63 Am. St. Rep. 499; Des Moines Insurance Co. v. Moon, 33 Okl. 437, 126 P. 753.

This provision of the contract, unless waived by the insurer, must be given force and effect as an express condition of the validity of the policy. Wilson & Williams v. Commercial Union Assurance Co., 90 Vt. 105, 108, 96 A. 540; Rochester German Ins. Co. v. Schmidt, supra.

Since by the unchallenged findings Bardwell was the holder of a naked legal title to the property, without any beneficial use or interest therein, he was not the solo and unconditional owner thereof, within the meaning of this provision of the policies. Des Moines Insurance Co. v. Moon, supra.

It is unnecessary to decide whether Bardwell had an insurable interest in the property, or to consider the rule urged by the plaintiffs that, if there is no written application and the company issues a policy without one, and without inquiry concerning the insured's interest, and without any representations, oral or written, the policy may be assumed to have been written upon the knowledge of the company or its agent, and in such case the company cannot after a loss set up that the interest of the insured is not correctly stated in the policy. In support of the rule, the plaintiffs cite, among other authorities, 14 R. C. L. 1055. § 231; 26 C. J. 317; 2 Joyce on Insurance, 1224; Glens Falls Insurance Co. v. Michael, 167 Ind. 650, 74 N. E. 964, 79 N. E. 905, 8 L. R. A. (N. S.) 708. But see Parsons, Rich & Co. v. Lane, 97 Minn. 98, 106 N. W. 485, 4 L. R. A. (N. S.) 231, 7 Ann. Cas. 1144. In this case the authorities supporting the rule are reviewed and discussed, and the court holds that the rule requires an unreasonable extension of the doctrine of waiver. It says: "The difficulty with the cases which support the appellant's contention (the rule here stated) is that they raise an estoppel or imply a waiver from conditions of which the insurer had no knowledge. The waiver rests on an implication arising out of an assumption."

The rule, even if we were disposed to adopt it, which we do not decide, has no application to the record before us. The policies were issued upon the express directions of Marshall to have them...