Barnard v. National Fire Ins. Co. of Hartford

• Decision Date: 06 June 1887
• Parties: HENRY S. BARNARD, Respondent, v. NATIONAL FIRE INSURANCE COMPANY OF HARTFORD, Appellant.
• Court: Kansas Court of Appeals

27 Mo.App. 26

HENRY S. BARNARD, Respondent, v. NATIONAL FIRE INSURANCE COMPANY OF HARTFORD, Appellant.

Court of Appeals of Missouri, Kansas City.

June 6, 1887

APPEAL from Buchanan Circuit Court, HON. JOSEPH P. GRUBB, Judge.

Reversed and remanded.

The case is stated in the opinion.

B. R VINEYARD, for the appellant.

I. The policy purported to insure Daniel Ransom against loss by fire " on his two-story brick, shingle-roof building." The acceptance of the policy thus worded, with the condition therein that, " if the assured is not the sole, entire and unconditional owner of the property insured, and (if a building is insured) of the land on which the building stands, by a sole, unconditional, and entire ownership, and title in fee-simple, * * * without being specified in the written portion of said policy, * * * then, and in every such case, this policy shall be null and void," amounts to a declaration, on the part of the assured, that his interest is an absolute one, qualified only by the interest which might appear to be in H. E. Barnard, the plaintiff, as trustee for the Phœ nix Mutual Life Insurance Company. Mers v Insurance Co., 68 Mo. 127; Lasher v. Insurance Co., 86 N.Y. 423; Southwick v. Insurance Co., 133 Mass. 457; Clay Insurance Co. v. Huron Mf'g Co., 31 Mich. 346, 356.

II. A policy like the one in this case, insuring a certain person loss, if any, payable to another, as his interest may appear, confers on such other only a derivative right, which cannot exceed that of the party through whom the right comes. Bidwell v. Ins. Co., 40 Mo. 46-7; Grosvenor v. Ins. Co., 17 N.Y. 391; Carpenter v. Ins. Co., 16 Pet. 495; Foster v. Ins. Co., 2 Gray 216; Hine v. Woolworth, 93 N.Y. 75.

III. Under the clause of the policy above stated, a failure on the part of the assured, if not to have had endorsed upon the policy, at least to have stated to defendant's agent his real interest in the property, if he was not the sole and unconditional owner thereof, was such a misrepresentation as to avoid the policy. Reithmueller v. Ins. Co., 20 Mo. 246; Insurance Co. v. Lawrence, 2 Pet. [U. S.] 25; Warner v. Ins. Co., 21 Conn. 444; Leathers v. Ins. Co., 24 N.H. 259; Ins. Co. v. Barnett, 73 Mo. 367.

IV. Instead of Ransom being the " sole," etc., " owner," he had sold it, by a contract in writing, duly executed by the parties thereto; had placed the purchaser in possession; had executed a deed to him, and placed it in escrow as security for the purchase money, all of which was unknown to the insurer. Ransom was, therefore, not the owner, but held the legal title for the purchaser (Sheldon), who was the owner. Ins. Co. v. Mf'g Co., 31 Mich. 357; Hough v. Ins. Co., 29 Conn. 19; Gaylord v. Ins. Co., 40 Mo. 13; Martin v. Ins. Co., 44 N.J. Law, 275; Lingenfelter v. Ins. Co., 19 Mo.App. 268; Ins. Co. v. Martin, 40 N.J. Law, 570; Ins. Co. v. Tyler, 16 Wend. [N. Y.] 396.

V. But, independent of the deed of trust, wherein Barnard, the plaintiff, was trustee, under the provisions of the policy sued on (which are more restrictive than in most policies), it is submitted that neither Sheldon nor Ransom, under the allegations in the parts of the answer stricken out, was " sole, unconditional, and entire" owner of the building insured, by " title in fee-simple," and especially was this so as to the title of Ransom. " A fee-simple is the largest possible estate that a man can have in lands, being an absolute estate in perpetuity." Jecko v. Taussig, 45 Mo. 169; 1 Washb. on Real Prop. 76-7. " A fee-simple is a freehold estate of inheritance, free from conditions and of indefinite duration." Tiedeman on Real Property, sect. 36. Nor was Ransom's ownership " unconditional," " sole," or " entire." As between him and Sheldon, he had only a partial, or conditional interest, subject to be extinguished on payment of the balance of the purchase money.

VI. The court erred in striking out that part of defendant's amended answer relating to other insurance taken out on the property, without defendant's consent, mentioned in or endorsed on the policy sued on. The policy, by its terms, was to be void " if the assured, or any other person or parties interested" should have other insurance, without such consent. The part stricken out showed Sheldon's connection with Ransom, and Sheldon's interest in the property, and Ransom's assent and authority in the procurement of additional insurance, it being charged that both of the said last-named policies covered the interest insured by the policy sued on. Obermayer v. Ins. Co., 43 Mo. 573; Thomas v. Ins. Co., 119 Mass. 121; Gee v. Ins. Co., 55 N.H. 65; Gale v. Ins. Co., 41 N.H. 176; Jackson v. Ins. Co., 23 Pick. [[[[Mass.] 418; Lindley v. Ins. Co., 65 Me. 368; Hutchinson v. Ins. Co., 21 Mo. 97; Deitz v. Ins. Co., 38 Mo. 83.

VII. The court erred in overruling defendant's motion to strike out part of plaintiff's reply, and in permitting plaintiff to prove that powder and petroleum were usually kept in a general store, and in refusing defendant's third instruction. The policy exempted the company from damage, where these articles were " deposited, used, or kept." The policy, in the case of Archer v. Insurance Co. (43 Mo. 439), exempted the company from liability under like circumstances, " unless otherwise expressly provided." No such qualification is in the policy sued on here. Macomber v. Ins. Co., 7 Gray 257; Wetherell v. Ins. Co., 16 Gray 276; Lancaster Fire Ins. Co. v. Leuheim, 89 Pa.St. 497; Birmingham Fire Ins. Co. v. Kroegher, 83 Pa.St. 64; Steinbach v. Ins. Co., 13 Wall. 183; Cerf v. Ins. Co., 44 Cal. 320.

VIII. The petition charged that the building insured was " totally destroyed by fire." The answer admitted partial, but denied total destruction. The evidence showed that the brick walls were left standing, and that part of the brick were cleaned and used in another building. The court refused to permit defendant to prove the value of the walls and brick left after the fire. It also refused to give defendant's second instruction, seeking to defeat plaintiff's right of recovery if the brick walls remaining after the fire were of any material value. There was no proof whatever as to the value of the building insured. The amount insured cannot be taken (Rev. Stat., secs. 6009 and 6010), as the value of the building, unless it is " wholly destroyed." The burden of proof to establish this was on the plaintiff.

IX. The fifth part of the amended answer stricken out by the court, sought to limit defendant's liability, as provided in the policy, to the loss which Ransom as mortgagee (as he was here directly charged to be) might sustain, after enforcing his claim against the lot on which the building stood. Sheldon, according to the allegations in the parts of the answer stricken out, was the equitable owner of the property. Ransom, subject to the claim of Barnard, trustee, held the legal title to secure the money Sheldon was to pay him. Hence Ransom occupied the relation to Sheldon, and to the title of said lot, of mortgagee. Dick v. Ins. Co., 81 Mo. 103; S. C., 10 Mo.App. 376. Where the trustee, as mortgagee, is vested with only a qualified interest in the policy, the party in whose name the insurance is effected is the proper party plaintiff in a suit for the loss. 1 Jones' Mort., sect. 408; Ins. Co. v. Davenport, 37 Mich. 609. The court erred in striking out the fifth part of answer, as defendant would have been entitled, under the facts there stated, to be subrogated to the rights of Ransom against the lot on which the building stood--Sheldon, the equitable owner, being no party to and having no interest in the policy sued on. Ins. Co. v. Woodruff, 26 N.J. Law, 555-6; Ins. Co. v. Tyler, 16 Wend. 397; Harris v. Ins. Co., 9 R.I. 207.

H. K. WHITE, for the respondent.

I. The court did not err in striking out the first part of defendant's answer, for Ransom had a right to insure to the full value of the perishable improvements, or at least to the amount of selling price, and the insurance money collected would have operated as a credit upon the purchase price agreed to be paid by Sheldon. Chamberlain v. Ins. Co., 55 N.H. 249.

II. The court did not err in striking out the second defence in defendant's answer. This fact, taken in connection with the first and third parts stricken out, shows that in law Ransom was still owner of the land in feesimple. (1) Because the contract and deposit of the deed in escrow did not change the title. 3 Wash. on Real Prop. 302; Frost v. Beekman, 1 Johns. Ch. 297; Jackson v. Rowland, 6 Wend. 666; Dyson v. Bradshaw, 23 Cal. 528. (2) Because his ownership was still entire, sole, unconditional by a title in fee-simple. Ins. Co. v. Kelly, 32 Md. 436-450; Williams v. Ins. Co., 107 Mass. 377; Vogel v. Ins. Co., 9 Gray 23; Pollard v. Ins. Co., 42 Me. 221; Phillips v. Ins. Co., 10 Allen 113; Ice Co. v. Ins. Co., 12 Allen 381.

III. The court did not err in striking out the third and fourth parts of defendant's answer, because it was not alleged that Ransom or Barnard were interested in the policies referred to, but it is shown that they were policies in which Sheldon alone was interested. Tyler v. Ins. Co., 16 Wend. 385; Rowley v. Ins. Co., 3 Keyes [N. Y.] 558; Bank v. Ins. Co., 31 Conn. 518.

IV. The fifth defence was properly stricken out, as there was no claim made in any pleading that Ransom was insured as a mortgagee.

V. There was no error in the court's action as to the motion of defendant to strike out parts of plaintiff's reply relating to keeping of coal oil, or in refusing defendant's third instruction relating to the same point. Archer v. Ins. Co., 43 Mo. 439; Pindar v. Ins. Co., 36 N.Y. 648.

VI. The instructions were correct as to the measure of damages. There was proof that the...