Bellevue Roller-Mill Co. v. London & L. Fire Ins. Co.

• Decision Date: 04 February 1895
• Citation: 4 Idaho 307,39 P. 196
• Parties: BELLEVUE ROLLER MILL COMPANY v. LONDON AND LANCASHIRE FIRE INSURANCE COMPANY
• Court: Idaho Supreme Court

39 P. 196

4 Idaho 307

BELLEVUE ROLLER MILL COMPANY v. LONDON AND LANCASHIRE FIRE INSURANCE COMPANY

Supreme Court of Idaho

February 4, 1895

INSURANCE-MANUFACTURING ESTABLISHMENT-OPERATION CLAUSE-VACANT AND UNOCCUPIED CLAUSE-FORECLOSURE PROCEEDING CLAUSE-WAIVER.-A policy of fire insurance on the flouring-mill of the plaintiff, the Bellevue Roller Mill Company, dated September 9, 1893, for one year provided as follows: "This policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void if the subject of insurance be a manufacturing establishment and cease to be operated for more than ten consecutive days." It appeared that said mill was compelled to suspend operations during a portion of each year because of the water freezing in the millrace which conducted it to the mill, and that the agent of the insurance company knowing this fact, had granted repeated renewals of the insurance on said mill for periods upward of one year, and that on the 9th of September, 1893, the policy sued on was issued as a renewal, for one year, of a former policy without written application and received the premium therefor. On December 9, 1893, the mill closed down and so remained until May 10, 1894, when the loss occurred. Held that under the facts of this case the insurance company had waived the provision of the policy above quoted. Said policy contains the following provision: "This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void if a building herein described, whether intended for occupancy by owner or tenant, be or become vacant or unoccupied and so remain for ten days." Held, under the facts of this case that the mill building did not become "unoccupied" within the meaning of that word as used in said policy. Said policy contains the following provision: "This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void if, with the knowledge of the insured, foreclosure proceedings be commenced or notice given of sale of any property covered by this policy by virtue of any mortgage or trust deed." Held, that as the foreclosure proceedings complained of were not commenced with the knowledge of the insured, said provision of the policy had not been violated.

(Syllabus by the court.)

APPEAL from District Court, Logan County.

Judgment affirmed, with costs in favor of respondents.

W. E. Borah, for Appellant.

In the body of the insurance policy sued on in this action is found the following provision: "1. This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void if the subject of insurance be a manufacturing establishment and cease to be operated for more than ten consecutive days." If the mill ceased to operate for ten consecutive days the policy would be avoided, even if the agent of the company knew it was in the habit of closing down during certain seasons, or that it had ceased to operate under prior policies. (Stone v. Insurance Co., 153 Mass. 475, 27 N.E. 6; Day v. Insurance Co., 70 Iowa 710, 29 N.W. 443; Dover Glass Works Co. v. Insurance Co., 1 Marv. 32, 65 Am. St. Rep. 264, 29 A. 1039; Keith v. Insurance Co., 10 Allen, 228; Herrman v. Insurance Co., 85 N.Y. 162, 39 Am. Rep. 644; England v. Insurance Co., 81 Wis. 583, 29 Am. St. Rep. 917, 51 N.W. 954.) The policy expressly provided that no agent could waive or be deemed to have waived any of the provisions of the policy, and the insured could not claim a waiver except the same be made in writing and be indorsed upon the policy. (Enos v. Insurance Co., 67 Cal. 621, 8 P. 379; Gladding v. Insurance Co., 66 Cal. 6, 4 P. 764; McCormick v. Insurance Co., 66 Cal. 361, 5 P. 617; Shuggart v. Insurance Co., 55 Cal. 408; West Coast Lumber Co. v. Insurance Co., 98 Cal. 502, 33 P. 258; Moore v. Insurance Co., 141 N.Y. 219, 36 N.E. 191; Hankins v. Insurance Co., 70 Wis. 1, 35 N.W. 34; Kyte v. Insurance Co., 144 Mass. 43, 10 N.E. 518; Martin v. Insurance Co., 85 N.Y. 278; Cleaver v. Insurance Co., 65 Mich. 527, 8 Am. St. Rep. 908, 32 N.W. 660; Gould v. Insurance Co., 90 Mich. 302, 51 N.W. 455; O'Reilly v. Insurance Co., 101 N.Y. 575, 5 N.E. 568; Burr v. Insurance Co., 84 Wis. 76, 36 Am. St. Rep. 905, 54 N.W. 22; Universal Ins. Co. v. Weiss, 106 Pa. St. 20; Hutchinson v. Insurance Co., 21 Mo. 97, 64 Am. Dec. 218, and note.) The policy sued upon provides: "This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void if a building herein described, whether intended for occupancy by owner or tenant, be or become vacant or unoccupied and so remain for ten days." To constitute occupancy under this clause, a building must be used in the manner and for the purpose incident to such building and to constitute occupancy of a building for manufacturing purposes there must be some practical use or employment of the property. Its use as a place of storage merely is not sufficient. (England v. Insurance Co., 81 Wis. 583, 29 Am. St. Rep. 917, 51 N.W. 954; Halpin v. Insurance Co., 118 N.Y. 165, 23 N.E. 482; 120 N.Y. 73, 23 N.E. 989; Ashworth v. Insurance Co., 112 Mass. 422; Limburg v. Insurance Co., 90 Iowa 709, 48 Am. St. Rep. 468, 57 N.W. 626; Continental Insurance Co. v. Kyle, 124 Ind. 132, 19 Am. St. Rep. 77, 24 N.E. 727; Reed v. Lancashire Insurance Co., 19 Hun, 284; Hartshorne v. Insurance Co., 50 N. J. L. 427, 14 A. 615; Home Insurance Co. v. Scales, 71 Miss. 975, 42 Am. St. Rep. 512, 15 So. 134.) "This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto shall be void, if with the knowledge of the insured foreclosure proceedings be commenced or notice given of sale of any property covered by this policy by virtue of any mortgage or trust deed." The courts have held that this is a fair, reasonable and binding provision, the violation of which avoids the policy. (Titus v. Glen Falls Co., 81 N.Y. 410; Quinlan v. Washington Ins. Co., 133 N.Y. 356, 28 Am. St. Rep. 645, 31 N.E. 31; Meadows v. Hawkeye Ins. Co., 62 Iowa 387, 17 N.W. 600; McIntire v. Insurance Co., 102 Mass. 230, 3 Am. Rep. 458; Moore v. Insurance Co., 141 N.Y. 219, 36 N.E. 191; West v. Insurance Co., 10 Utah 442, 37 P. 685; Merchants' Ins. Co. v. Brown, 77 Md. 79, 25 A. 992.)

George H. Stewart and R. F. Buller, for Respondents.

Policies of insurance are written for the purpose of indemnity and that they should be construed in favor of the assured. (Wallace v. German-American Ins. Co., 41 F. 742; Pennsylvania Mut. Co. v. Wiler, 100 Ind. 92, 50 Am. Rep. 769; Friezen v. Allemania Fire Ins. Co., 30 F. 352; 1 May on Insurance, sec. 175.) Where the policy is issued containing conditions inconsistent with the facts, and the agent knew the facts when the policy was issued, the conditions are waived, so far as they conflict with the facts known to the agent. (De Puy v. Delaware Ins. Co., 63 F. 680; Mesterman v. Insurance Co., 5 Wash. 524, 34 Am. St. Rep. 877, 32 P. 458.) The insurance company contended that as the property insured was located on leased land, the same being school land, that the policy was avoided under the condition that the title should be that of absolute owner, and the court holds that the company is estopped from denying the ownership of the assured, the same being facts known to the solicitor at the time the policy was written by him, notwithstanding a clause in the policy that no person, unless authorized in writing, shall be deemed the agent of the company. (Brandup v. Insurance Co., 27 Minn. 393, 7 N.W. 735; First Nat. Bank v. American etc. Ins. Co., 58 Minn. 492, 60 N.W. 345; American etc. Ins. Co. v. McCrea, 8 Lea, 513, 41 Am. Rep. 647; Farnum v. Phoenix Ins. Co., 83 Cal. 246, 17 Am. St. Rep. 233, 23 P. 869.) As to the question of occupancy we cite Herrman v. Merchants' Ins. Co., 81 N.Y. 184, 37 Am. Rep. 488. As the insurance company prepares the contract, and embodies in it such conditions as it deems proper, it is in duty bound to use language so plain and clear that the insured cannot mistake or be misled as to the burdens and duties thereby imposed upon him. (Wood on Insurance, 140, 141; Fisher v. Crescent Ins. Co., 33 F. 549; 1 May on Insurance, sec. 175; Resident etc. Ins. Co. v. Hannowld, 37 Mich. 103.)

Action by the Bellevue Roller Mill Company, a corporation, and the First National Bank of Idaho a corporation, against the London and Lancashire Fire Insurance Company, a corporation, on a policy of insurance. Verdict for plaintiffs, and judgment thereon. Motion for new trial made and denied. Defendant appeals. Affirmed.

The facts are substantially as follows: This action was brought to recover $ 1,250, with interest--the amount of a policy of insurance issued on September 9, 1893, to the plaintiff, the Bellevue Roller Mill Company, on a certain flouring mill situated at the town of Bellevue, Logan county. The plaintiff, the First National Bank of Idaho held a mortgage against said roller mill company, on said mill and the machinery therein, to secure the payment of a certain $ 7,000 promissory note. Said mortgage bears date October 11, 1892 and said note became due and payable on July 10, 1893. Said policy of insurance was made payable to said First National Bank of Idaho as its interest might appear, and placed in its possession by the appellant. The policy of insurance was a renewal of another policy, and renewals had been made for each of several years preceding the renewal of September 9, 1893, sued on herein. No formal application had been made for any of such renewals. It was the custom of Lemmon & Boone, the resident agents of the defendant corporation, at the expiration of each policy, to issue a new policy of renewal upon said property without a written application...