Born v. Home Ins. Co. of New York

• Decision Date: 27 January 1900
• Citation: Born v. Home Ins. Co. of New York, 81 N.W. 676, 110 Iowa 379 (Iowa 1900)
• Parties: HENRY BORN, Appellant, v. HOME INSURANCE COMPANY OF NEW YORK
• Court: Iowa Supreme Court

81 N.W. 676

110 Iowa 379

HENRY BORN, Appellant, v. HOME INSURANCE COMPANY OF NEW YORK

Supreme Court of Iowa, Des Moines

January 27, 1900

Appeal from Cedar District Court.--HON. M. J. WADE, Judge.

ACTION to recover upon a policy of insurance against loss by fire. The defense relied upon are that the policy had been suspended before the loss, for nonpayment of the premium, and that the policy was rendered void by the execution of chattel mortgages upon personal property covered by the policy without the knowledge or consent of the defendant. At the close of all the testimony each party moved for a verdict. The motion of the plaintiff was overruled, and the motion of the defendant sustained, and verdict and judgment rendered accordingly. Plaintiff appeals.

Reversed.

W. G W. Geiger and Smith, Kirk & Smith for appellant.

Thos A. Cheshire, McVey & McVey, and E. M. Brink for appellee.

GIVEN J. GRANGER, C. J., not sitting.

OPINION

GIVEN, J.

I.

The defendant issued to the plaintiff its two policies of insurance on certain real and personal property, each running from May 22, 1893, to May 22, 1896; the one in suit, being No. G. F. 94,403, insuring against loss by fire or lightning, and the other, A 36,125, against loss by tornado, cyclone, or wind storm. In consideration of this insurance the plaintiff paid to defendant eight dollars in cash on account of premium on the fire policy, and executed and delivered his one promissory note for sixty-six dollars, payable on or before the first day of May, 1894, "in payment of the premium of policy No. G. F. 94,403, A 36,125." On the twenty-fourth day of March, 1894, the defendant mailed, by registered letter, notice, under chapter 210, Laws Eighteenth General Assembly, to the plaintiff, which he received on the second day of April, 1894. On the eleventh day of March, 1895, the plaintiff's barn and part of the personal property covered by the fire policy was destroyed by fire. Plaintiff made no response to the notice by registered letter, and has never paid any part of said promissory note, and defendant's contention is that by reason thereof the policy sued upon became and was suspended long before the loss occurred. Plaintiff insists that said notice was not as required by said chapter 210, in that it did not designate the amount to be paid on account of the policy in suit, or state the customary short rates thereon. The notice informed the plaintiff that "your note for insurance under Policy No. G. F. 94,403, A 36,125, falls due on the first day of May, 1894;" that the amount of the note was sixty-six dollars, amount of interest, four dollars and eighty-four cents,--total, seventy dollars and eighty-four cents; also, that "the amount required to cancel your contract, in case you so elect, is forty dollars and ten cents, being our customary short rates and expenses;" and that, "unless payment is made within thirty days, your policy will be suspended." These amounts include the entire note and the short rates thereon, and plaintiff insists that, to be valid, it should have included that part of the note given for premium on the policy in suit, and the short rates on that amount. Defendant contends that the note was a single transaction, and that it was its privilege "to suspend this note; not half of it, but all of it." This contention is answered in Smith v. Insurance Co., 108 Iowa 382, 79 N.W. 126. The only distinction between that case and this is that in it two notes were executed for the aggregate premium to be paid, while in this there was but one. Following that case, we hold that the notice was insufficient to entitle the defendant to cancel the policy in suit.

II. The policy sued upon insures the plaintiff to the amount of four thousand dollars as follows: Four hundred dollars on dwelling house; two hundred dollars on contents; six hundred dollars on barn and sheds attached, marked "No. 1" on diagram; barn and shed marked "No. 2" on diagram harness, etc.; two hundred dollars on farm implements, granary, and crib; four hundred dollars on grain; two hundred dollars on hay; seven hundred and fifty dollars on horses, mules, and colts; nine hundred dollars on cattle; fifty dollars on sheep; and three hundred dollars on hogs. The barns and a considerable portion of this personal property were destroyed by fire. The plaintiff gave several chattel mortgages on parts of this personal property without the knowledge or consent of the defendant, wherefore the defendant claimed that there was a forfeiture of the entire policy. The plaintiff insists that the forfeiture clause only relates to the real estate; that, if it relates to both, he had the right to sell the personal property; that mortgaging was one form of selling; and that, if these positions are not tenable, still he is entitled to recover the value of the barn and other property that was not mortgaged or incumbered. We must look to the terms of this policy to see whether, notwithstanding the premium is a gross sum, it does not limit forfeiture on account of mortgaging to the mortgaging of all of the property. The policy contains the following: "This indemnity contract is based upon the valuations and representations contained in the assured's application and diagram of even number herewith, which the assured has signed, and permitted to be submitted to the company, and which are hereby made a warranty, and a part thereof; and it is stipulated and agreed that, if any false statements are made in said...