Dodge v. Grain Shippers' Mutual Fire Insurance Ass'n
| Citation | 157 N.W. 955,176 Iowa 316 |
| Decision Date | 13 May 1916 |
| Docket Number | 29886 |
| Parties | C. S. DODGE, Appellant, v. GRAIN SHIPPERS' MUTUAL FIRE INSURANCE ASSOCIATION, Appellee |
| Court | United States State Supreme Court of Iowa |
Appeal from Ida District Court.--M. E. HUTCHISON, Judge.
ACTION to recover amount alleged to be due upon a policy of insurance. Policy issued to insure plaintiff's interest as mortgagee in the property insured. Cause tried to the court without a jury. Judgment for the defendant, dismissing plaintiff's petition. Plaintiff appeals.--Reversed.
Reversed and Remanded.
Charles S. Macomber, McWhinney & Brown and Miller & Wallingford, for appellant.
Johnston Bros., for appellee.
This is an action to recover an amount alleged to be due on a certain policy of insurance executed and delivered by the defendant to the plaintiff to secure the plaintiff's interest in certain property as mortgagee. The uncontroverted evidence discloses the following facts:
The plaintiff resides in Lowell, Massachusetts, and was a resident of that city at the time the policy was issued. He held two mortgages on certain buildings and additions owned by the North Ontario Reduction & Refining Company, situated at Sturgeon Falls, Ontario, Canada. Plaintiff's interest in the property consisted of the two mortgages, one of about $ 4,000 and the other about $ 5,000, with interest, amounting in all to about $ 10,000. These mortgages were subsisting valid liens upon the land and improvements at the time the policy was issued, and at the time the fire occurred which destroyed the property. The evidence disclosed that the buildings were partially completed at the time the policy was issued. The end of the building containing the engine and generator was not completed, bricked in, and it was contemplated that the engine house should be joined to the main building, and the main building would have to be opened to a certain extent, to enable this to be done. Besides, considerable machinery had not been placed in the building. The lower portion of the building was boarded up, and the doors locked as a matter of protection, owing to the numerous articles of machinery that were loose in the building, and as a matter of protection against loss or injury. The reason for the delay in completing the building seems to be that a roaster placed in the building, while being tested, did not work satisfactorily. The new roaster was to be obtained and placed in the building at an expense of about $ 2,000. Negotiations were being carried on with a view of procuring a suitable roaster. This was the condition of the building since the February preceding, and at the time the policy was issued. The business for which the building was constructed was not being carried on at the time. It does not affirmatively appear that any business had been conducted in the building prior to the issuing of the policy. It continued in that condition, without a watchman, from the date of the issuance of the policy until the destruction of the building by fire. The policy was issued on the 23d of August, 1909. The building was destroyed on the 1st day of November, 1909.
At the time plaintiff secured his policy of insurance covering his interest under the two mortgages, hereinbefore referred to, the building was covered by a prior mortgage in favor of some third parties, for about $ 30,000. Plaintiff's policy provided for the payment of $ 1,000 in case of loss; that is, plaintiff insured his interest in the property to the amount of $ 1,000. It is to recover this $ 1,000 that suit is brought. Upon the happening of the fire, due proofs of loss were made, and the defendant refused to pay.
The defendant for answer admits that it is a domestic corporation organized under and by virtue of the laws of this state, for the purpose of writing fire insurance, and its principal place of business was at Ida Grove, Iowa; admits that it issued the policy to the plaintiff; admits that it refused to settle with the plaintiff. The defendant further says and alleges the fact to be that, if said property was totally destroyed by fire, as claimed by the plaintiff, the value of said property would not exceed the value of the interest of the first mortgage, and says that plaintiff had no insurable interest in the property at the time of loss. Defendant further says that plaintiff misrepresented the fact at the time he applied and obtained the insurance, in that he represented the building and fixtures therein contained as being "in the course of construction," and said policy was issued to the plaintiff as a builder's risk; whereas, in truth and in fact, said property, at the time of the issuance of said policy, and during all times thereafter, had been abandoned, and the windows were boarded up, and the doors locked, and all workmen withdrawn, and no watchman was placed in charge of the building; that, instead of being a builder's risk, the property had been abandoned and deserted. Defendant further says that there was a provision in the policy reading as follows:
"This policy shall be void if the insured has concealed or misrepresented any material fact or circumstance concerning this insurance, or the subject thereof, or if the interest of the insured in the property shall not be truly stated herein, . . . or if the subject of the insurance ceased to be operated for more than 10 days consecutively, or if the hazard be increased by any means within the control or knowledge of the insured, or if any change other than the death of the insured take place in the interest, title or possession of the subject of insurance, or if the building described be or become vacant or unoccupied, and so remains for 10 days."
That, notwithstanding the terms and provisions of the policy, the plaintiff concealed and misrepresented to the defendant the fact that, at the time said policy was issued, said building was vacant and unoccupied, and was in no manner a builder's risk, or in process of construction; that after the issuance of the policy, and notwithstanding its terms and provisions, said plant, its operation and construction, ceased for more than 10 days. The defendant further says, as a matter of defense, that the policy of insurance, among other things, contained this provision:
"If the hazard be increased by any means within the knowledge or control of the insured, the entire policy shall be void."
That, notwithstanding this provision, the property became encumbered by the filing of mechanics' liens; that said liens increased the hazard of the risk. Defendant further says that the policy contained a provision:
"If, with the knowledge of the insured, foreclosure proceedings are commenced, or notice given of sale of any property covered by this policy by virtue of any mortgage or trust deed, then the entire policy shall be void."
That, with the knowledge of the plaintiff, foreclosure proceedings had been instituted against the property mentioned and described in the policy.
Upon the issues thus tendered, the cause was tried to the court, jury being waived, and judgment entered for the defendant, dismissing plaintiff's petition. From this, plaintiff appeals.
I. The contention of plaintiff on this appeal is that the evidence was wholly insufficient to justify the court in entering judgment against the plaintiff; that there was no evidence to support the defendant's contention. Other specific errors are assigned, but they do not appear in the original argument, and are raised for the first time in the reply. These, we do not consider.
There is practically no dispute in the evidence. Our duty is to determine what the rights of the parties are under a record in which there is no substantial dispute touching any fact material to a proper determination of these rights. The determination of the case, therefore, involves the application of the law to the facts.
We recognize the rule that, in all law actions in which a jury is waived and the cause tried to the court, the finding of the court upon disputed facts has the same force and effect as is given to the verdict of a jury, and it will not be disturbed unless the finding is clearly against the evidence.
We divide the consideration of this case into five parts, and these several parts involve, we think, all the controversy that this record provokes: (1) Does the record show that the property destroyed by fire was not in excess of the first mortgage, and that, therefore, plaintiff had no interest in the property to be damaged by the destruction of it? (2) Does the record show fraud and misrepresentation on the part of the plaintiff as to the character of the risk insured? (3) Does the record show that the buildings in controversy became vacant and unoccupied and remained so for a longer period than 10 days, in violation of the terms of the policy, and did the policy on account thereof become void? (4) Had the buildings been abandoned in such a sense that, under the provision of the policy, the 10 days' limit applied, rendering the policy void? (5) Did the filing of the mechanics' lien and the commencement of foreclosure proceedings under the first mortgage render the policy unenforceable and void under the terms of the policy?
On the first proposition, touching the value of the property covered by this policy, the record discloses that the plaintiff's testimony was taken. He testified:
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