Cox v. Home Insurance Co.

• Decision Date: 03 September 1932
• Docket Number: No. 30100.,30100.
• Parties: FRANK COX v. HOME INSURANCE COMPANY OF NEW YORK, Appellant.
• Court: Missouri Supreme Court

52 S.W.2d 872

FRANK COX v. HOME INSURANCE COMPANY OF NEW YORK, Appellant.

No. 30100.

Supreme Court of Missouri, Division 1.

September 3, 1932.

Appeal from Barry Circuit Court. — Hon. Chas. L. Henson, Judge.

AFFIRMED.

E.L. Snider and Farrington & Curtis for appellant.

A provision in an insurance policy that the company shall not be liable for a greater proportion of any loss on the described property than the amount hereby insured shall bear to the whole insurance whether valid or not covering said property, is a valid and enforceable provision and limits the maximum loss on the barn in this case to $750. Mays v. National Union Fire Ins. Co., 257 S.W. 141; 26 C.J. par. 464, pp. 362, 363; Turnbull v. Ins. Co., 5 S.W. 542; Webb v. Ins. Co., 132 N.W. 523, 36 L.R.A. (N.S.) 350; Verdier v. Ins. Co., 35 Mich. 395; Cassiday v. Ins. Co., 65 Miss. 49; Bateman v. Lumberman Ins. Co., 42 Atl. 184; Grady v. Orient Co., 29 S.E. 655; Southern National Ins. Co. v. Barr, 148 S.W. 845; Parks v. Hartford Ins. Co., 100 Mo. 373.

D.S. Mayhew for respondent.

A provision in the policy that the company shall not be liable for a greater proportion than the amount shall bear to the insurance does not apply in this case. There was no other insurance on the property, as a lapsed policy is a dead policy and is never restored to life unless payment on lapsed policy is made, which was never done in this case. 26 C.J. sec. 231, p. 190; German Ins. Co. v. Hayden, 21 Colo. 127, 40 Pac. 453; Hartford Fire Ins. Co. v. McKinley, 186 Fla. 186, 77 So. 226; Farbusch v. Ins. Co., 4 Gray, 337.

STURGIS, C.

This is a suit on a policy of cyclone and windstorm insurance issued by defendant, in which suit the plaintiff recovered damages for the destruction of his barn in the amount of $1,450 and for injury to his dwelling house in the amount of $150 caused by a violent windstorm. The policy on the barn is for $1,500 and on the dwelling house for $1,350, together with certain amounts on other buildings not injured by the storm. The case was tried by the court as a jury and in fixing the amount of the damage for destruction of the barn the court deducted $50 as the value of the salvage and fixed the amount of damage to the dwelling house at $150. From the judgment for plaintiff for $1,600 rendered at the June term, 1928, of the Barry County Circuit Court, defendant appealed to the Springfield Court of Appeals. That court reversed the judgment of the trial court and remanded the case, but one of the judges dissented, and deeming the majority opinion to be in conflict with the decision of this court in the case of Wilson Company v. Hartford Fire Ins. Co., 300 Mo. 1, 254 S.W. 266, the case has been certified to this court.

The decision of the Court of Appeals, including both the majority and dissenting opinions, is reported in Cox v. Home Insurance Co., 19 S.W. (2d) 297, where a fuller statement of the facts and issues will be found and need not be repeated here. The case is here for review the same as if the appeal had been to this court in the first instance, but it will suffice to say, without copying same, that on reading the record and briefs, we approve and adopt the rulings of the Court of Appeals except on the one point on which the judges of that court differed.

The point for our consideration calls for the construction, as applied to the facts here, of the clause of the policy sued on which reads:

"In case there shall be any other insurance against tornado, windstorm or cyclone on the property herein named, whether valid or not, the assured shall be entitled to recover of this company no greater proportion than the sum herein named bears to the whole amount of insurance."

The present policy was issued on May 26, 1927, and the loss occurred on July 16, 1927. The Court of Appeals properly held, and we are holding, that this policy was a valid and existing policy at that date. Defendant's contention is that at the time of the loss there was other insurance against tornado and windstorm on this same property and that under the provisions of its policy just quoted, it is liable for only its pro rata share of the loss, regardless of plaintiff's ability to recover judgment against the other company.

The facts in regard to there being other cyclone insurance on this same property so as to limit defendant's liability to only its pro rata share of the loss, are that in April, 1925, plaintiff had taken out a cyclone and windstorm policy in the Springfield Fire & Marine Insurance Company, which we will call the Springfield Company, on this same property and in the same amounts as the present policy. That was a five-year policy and had it been kept in force by payment of premium, would have been valid at the time of this loss. One year's premium was paid in advance, keeping it in force till April 1, 1926, and plaintiff gave his note, payable in installments, for the balance of the premium, one installment being due April 1st of each year, and when paid kept the insurance in force for another year. As to payment of premium, that policy contained this provision:

"But it is expressly agreed that this Company shall not be liable for any loss or damage that may occur to the property herein mentioned while any promissory note or obligation, or part thereof, given for the premium remains past due and unpaid. When said premium note or obligation is paid this insurance shall again attach from the date of receipt of such payment by the Manager." That policy also contained this clause: "If the assured, without written consent hereon, has now, or shall hereafter procure any other contract of insurance, whether valid or not, on any of said property ... then in each and every one of the above cases this policy shall be null and void."

It is conceded that plaintiff did not pay the premium installment which came due April 1, 1927, and that the Springfield policy then lapsed. There was a mortgage or deed of trust on this property held by the Deming Investment Company and a mortgage clause in favor of the mortgagee was attached and the policy was held by the mortgagee. When plaintiff defaulted in the payment of the premium installment, the Springfield Company notified both the mortgagee and the plaintiff and his agent of that fact. Plaintiff's agent, having the matter in charge, for some cause decided to take out a new policy rather than revive the lapsed policy in the Springfield Company, and applied for and took out the policy now sued on. The lapsed policy in the Springfield Company was a combined fire and cyclone policy, while the present policy is for cyclone insurance only and with a much lower rate of premium. There is nothing whatever in the record to indicate that plaintiff intended to keep both policies in force. He considered it purely optional with him to continue the Springfield policy in force by paying the annual installments of premium as they came due or to let the policy lapse. It is true, under the law, that the Springfield Company might have forced plaintiff to pay the premium installment after default and thus might have revived such policy, but nothing of that kind was attempted. When the loss occurred, there was and now is no chance whatever for plaintiff to recover on the Springfield policy. Defendant argues that the Springfield policy was at the time of the loss merely a lapsed policy and not a cancelled policy, but however that may be it was a dead policy, and if plaintiff is compelled to prorate his loss between the two companies, it merely means that he can collect only half his loss.

The policy in the Springfield Company was at the time of the loss void and non-enforceable for another reason than the failure to pay the installment of premium when due. That policy, as we have noted, contained a provision that same would become void if the assured obtained, without its consent, which was not given, any other contract of insurance, whether valid or not, on the same property; so that the issuance of the policy now sued on ipso facto rendered the Springfield policy, null and void, and it was not merely a lapsed policy subject to being revived by paying the past due premium, if that fact would make any, difference.

The plaintiff in his application for the policy sued on stated that there was no other insurance on the property in question. He warranted this statement to be true and agreed that the insurance to be issued should be predicated on such statement. If the abated policy in the Springfield Company, made void by the issuance of this policy, constituted "insurance" as that term is used in the present policy, then the plaintiff made a false representation in this respect. However, the defendant does not claim that there was such a false representation in this respect as to render the present policy void. It merely claims that it effects a pro rata reduction of the loss.

[1] The general rule, though the decisions are conflicting, seems to be that in order to constitute a false representation as to there not being other or existing insurance on the same property, such other or existing insurance must be valid and enforceable. In 26 Corpus Juris, 189, section 230, this is said: "If the prior policy is wholly invalid before the issuance of the policy in suit, it cannot be regarded as constituting an insurance which must be disclosed, in the absence of a specific requirement as to the disclosure of insurance whether valid or not; although it has been held that if the policy is valid on its face, it should be disclosed... . A provision in the policy requiring all the insurance `whether valid or not' to be disclosed is valid, and a failure to mention a former policy apparently valid on its face, but in fact void, will vitiate the insurance. Some authorities, however, have held that notwithstanding such provisions the existence of a void policy will not defeat a subsequent policy." Cases are cited sustaining all these propositions.

So,...