Brown v. Commercial Fire Ins. Co.

• Court: Supreme Court of Alabama
• Writing for the Court: CLOPTON, J.
• Citation: 86 Ala. 189,5 So. 500
• Decision Date: 22 February 1889
• Parties: BROWN v. COMMERCIAL FIRE INS. CO.

5 So. 500

86 Ala. 189

BROWN
v.
COMMERCIAL FIRE INS. CO.

Supreme Court of Alabama

February 22, 1889

Appeal from circuit court, Montgomery county; JOHN P. HUBBARD, Judge.

Action by George G. Brown against the Commercial Fire Insurance Company on an insurance policy issued by defendant to one Sage, who assigned it to plaintiff. A demurrer to the pleas was overruled, a demurrer to the replication sustained, and, plaintiff declining to plead further, judgment was entered for defendant. Plaintiff appeals. [5 So. 501]

Gordon MacDonald, Marks & Massie and W. G. Hutcheson, for appellant.

Tompkins, London & Troy, for appellee.

CLOPTON, J.

The material and decisive defense urged to the action, which is founded on a policy of fire insurance, is that the assured failed to disclose the true ownership of the property insured. This defense is set up by several different pleas, varying somewhat in form and particularity of the averments as to the interest and title of the assured, but substantially the same in their legal effect. We shall take for consideration the one which avers the facts in the fullest manner, and with greatest particularity. The plea alleges that the policy contained the following condition and stipulation: "This policy shall become void unless consent in writing is indorsed by the company hereon, in each of the following instances, viz., if the assured is not the sole and unconditional owner of the property, or if any building intended to be insured stands on ground not owned in fee-simple by the assured; or if the interest of the assured in the property, whether as owner, trustee, consignee, factor, agent, mortgagee, lessee, or otherwise, is not truly stated in this policy." The object of such stipulation in a policy is to protect the company against taking risks on property for an amount disproportionate to the value of the interest of the assured, on which the company relies to a great extent as an incentive to use all reasonable precautions to avoid the destruction of the property. Being incorporated in the policy, it is in the nature of a condition precedent, which must be substantially conformed with to entitle the assured to recover. When the true ownership is not required to be fully stated by the conditions of the policy, generally it will be sufficient if the assured has an insurable interest; but when such requirement is the condition of the policy it becomes a material part of the contract, and all rights under it are forfeited by non-compliance. A failure, in such case, to disclose truly the interest in the property cannot be regarded an immaterial circumstance. By express stipulation the parties make it material, and the validity of the contract dependent on a compliance with the condition. The assured, by accepting a policy in which such condition is incorporated, becomes bound thereby, and when he claims to enforce the contract, and receive its benefits, he is estopped from denying his assent to the stipulation. Lasher v. Insurance Co.,86 N.Y. 423; Mers v. Insurance Co., 68 Mo....