Davis v. Bremer Cnty. Farmers' Mut. Fire Ins. Ass'n

• Decision Date: 06 March 1912
• Citation: 154 Iowa 326,134 N.W. 860
• Parties: DAVIS v. BREMER COUNTY FARMERS' MUT. FIRE INS. ASS'N.
• Court: Iowa Supreme Court

154 Iowa 326

134 N.W. 860

DAVIS

v.BREMER COUNTY FARMERS' MUT. FIRE INS. ASS'N.

Supreme Court of Iowa.

March 6, 1912.

Appeal from District Court, Bremer County; J. J. Clark, Judge.

Action to recover for a loss by fire, alleged to be covered by a policy of insurance in the defendant company. The court sustained a demurrer to the petition, and on the election of plaintiff to stand on his pleading, judgment was rendered for the defendant, from which the plaintiff appeals. Affirmed.Dawson & Wehrmacher, for appellant.

Sager & Sweet, for appellee.

McCLAIN, C. J.

On May 22, 1908, the defendant company executed to Mrs. William Blume its policy of insurance against loss or damage by fire to her dwelling house and farm buildings in the sum of $800. On or about the 26th day of October, in the same year, Mrs. Blume sold and conveyed the real estate on which such buildings were situated to this plaintiff, said conveyance being by warranty deed, and at the same time, and as part of the consideration of the purchase of the property by plaintiff, “it was understood and agreed that he should succeed to and become the owner of said policy of insurance and all the rights, interest, and privileges thereunder, and that plaintiff is now the owner and holder thereof.” The by-laws of the defendant company, which are by reference made a part of the contract of insurance, contain the following article:

“Sec. 18.--The holders of unexpired policies are liable for all assessments. Any member desiring his policy cancelled must return it with the request to cancel to the secretary of the association, who will be governed by article XII of the articles of incorporation. Any member disposing of property insured must have his policy either cancelled or transferred; if a transfer is desired, both seller and purchaser should appear at the office of secretary or assistant secretary, that the transfer be properly made upon register and policy.”

The only written or formal assignment from Mrs. Blume to plaintiff was the printed form of assignment on the back of the policy, filled out to read as follows: “Transfer.--Sumner, Iowa. Trans. Nov. 13-08. Burnt Nov. 9-08. For the consideration of the payment of present dues I hereby transfer the within policy to W. E. Davis. [Signed] Mrs. Wm. Blume. In the presence of J. A. Lease, Assistant Secretary.”

It does not appear that, prior to this formal assignment, the policy had been delivered to plaintiff; but it does appear “that, on account of the absence of the assistant secretary, the formal transfer of the policy was not indorsed thereon until on or about the 13th day of November, 1908, at which time said policy was presented to the said assistant secretary,” and that information was then given him of the purchase of the property by plaintiff and the assignment of the policy to him, and that “thereupon the said assistant secretary duly indorsed and consented to the transfer thereof, thereby ratifying and confirming the assignment and transfer of said policy of insurance to said plaintiff.” On November 9, 1908, there was a complete destruction of the buildings by fire, and on the next day the plaintiff sent to the defendant company certain alleged proofs of loss, in which he described himself as owner and holder of the policy by assignment and delivery to him by Mrs. Blume on October 26, 1908.

The foregoing are the material facts as alleged in the petition, which must be treated as true in passing upon the demurrer, which sufficiently raises the questions whether the absolute sale and conveyance of the property by Mrs. Blume to the plaintiff, prior to the fire, by terminating her insurable interest, terminated, also, her right to recover under the policy, and whether, by the alleged agreement of assignment at the time of the conveyance, and by the formal assignment after loss, plaintiff acquired any right to recover under the policy. The sufficiency of the proofs of loss is also put in issue by the demurrer.

[1][2] 1. If any one proposition can be regarded as having been definitely settled by early adjudications, and as having remained definitely settled, notwithstanding constant modifications of the law on the subject of fire insurance by changes of view on the part of courts and of policy on the part of Legislatures, it is the proposition, made up of three distinct elements working together to one result, that the purchaser of the absolute title and right to property covered by a fire insurance policy is not entitled to the indemnity provided for in the policy on account of a damage to or destruction of the property subsequent to the transfer, unless, by the consent of the insurer, the policy has been assigned to the purchaser by the former owner. The three elementary principles of fire insurance which, working together, bring about this inevitable result are, first, that a policy of fire insurance is a contract of indemnity, and if, at the time of loss, the holder of the policy has no right, title, or interest to or in the property insured he cannot recover anything under his contract of insurance, for the damage to or destruction of the property results in no injury to him; second, that the purchaser of the property, taking it prior to the loss, is not a party to any contract of insurance between the former owner and the insurer, and therefore is not entitled to recover under such contract; and, third, that the contract of fire insurance, being personal in its nature, cannot be transferred by the insured to another, save in accordance with provisions of the contract itself, involving the express or implied assent of the insurer, or a valid contract of the insurer that it shall become liable to the new owner. These elementary propositions are not dependent on any stipulations, conditions, or limitations of the contract itself, but result from the very nature of the contract, though, of course, they may be superseded or waived by provisions in the contract, or by a new valid contract or agreement subsequently made. In support of the general proposition involved, it is sufficient to cite a few authorities, with the suggestion that, so far as they sustain these elementary principles, they have remained unquestioned in any cases to which our attention has been called, or of which we have any knowledge: Ætna Fire Ins. Co. v. Tyler, 16 Wend. (N. Y.) 385, 30 Am. Dec. 90; Lane v. Maine Mut. F. Ins. Co., 12 Me. 44, 28 Am. Dec. 150; Morrison's Adm'r v. Tennessee M. & F. Ins. Co., 18 Mo. 262, 59 Am. Dec. 299;Mutual Protection Ins. Co. v. Hamilton, 5 Sneed (Tenn.) 269; Ayres v. Hartford F. Ins. Co., 17 Iowa, 176, 85 Am. Dec. 553; Simeral v. Dubuque Mut. F. Ins. Co., 18 Iowa, 319;White v. Robbins, 21 Minn. 370;New England Loan & Trust Co. v. Kenneally, 38 Neb. 895, 57 N. W. 759;Insurance Co. of N. America v. Martin, 151 Ind. 209, 222, 51 N. E. 361;Lett v. Guardian F. Ins. Co., 125 N. Y. 82, 25 N. E. 1088; 1 May, Insurance (4th Ed.) § 264, 19 Cyc. 583, 591, 633; 13 Am. & Eng. Enc. (2d Ed.) 100, 184. Unless, therefore, something may be found in the provisions of the contract...