Dwelling-House Ins. Co. v. Johnson

• Decision Date: 09 July 1891
• Parties: THE DWELLING-HOUSE INSURANCE COMPANY v. I. C. JOHNSON et al
• Court: Kansas Supreme Court

27 P. 100

47 Kan. 1

THE DWELLING-HOUSE INSURANCE COMPANY v. I. C. JOHNSON et al

Supreme Court of Kansas

July 9, 1891

Error from Shawnee District Court.

ACTION to recover on a fire insurance policy. Judgment for plaintiffs, Johnson & Williams, at the April term, 1888.

The defendant Company brings the case here. The opinion states the facts.

Judgment reversed and new trial granted.

Rossington Smith & Dallas, and P. L. Soper, for plaintiff in error.

David Overmyer, for defendants in error.

JOHNSTON J. All the Justices concurring.

OPINION

JOHNSTON, J.:

This was an action brought by Johnson & Williams upon a fire insurance policy issued by the Dwelling-House Insurance Company. In their petition they set forth the contract of insurance, the payment of the premium, the destruction by fire of some of the property insured, on December 26, 1886; that the loss sustained was $ 1,600, and that the company had refused to pay the loss, although the plaintiffs had performed all the conditions of the policy incumbent upon them. The defendant answered, admitting the execution of the policy, but alleging a breach of the condition of the same in regard to incumbrances. The company averred that in the written application for insurance, upon the faith of which the policy was issued, Johnson & Williams represented and declared that they were the absolute owners of the property sought to be insured, and that their property was unincumbered, when in fact there was upon the property at the time of the execution of the policy a mortgage lien and incumbrance; and it alleged that there was a provision of the policy to the effect that if the interest of the insured in the property was, at the time of the execution of the policy, or should become, any other or less than a perfect legal and equitable title, free from all liens whatever, except as stated in writing upon the policy, then the policy should be absolutely void. It was further alleged that the insured, without the knowledge or consent of the company, and in violation of the provisions of the policy, executed and delivered another mortgage upon the property, after the execution of the policy, and before the loss occurred. The reply of Johnson & Williams was a denial of the foregoing facts alleged in the answer. The trial resulted in a verdict and judgment against the company, and it complains of the ruling of the court in admitting testimony and in instructing the jury.

On the trial the plaintiffs below were permitted to offer proof tending to establish a waiver of the condition of the policy respecting incumbrances, and such as would estop the company from urging the forfeiture against a recovery on the policy. It is undisputed that at the time the contract of insurance was made there was a mortgage of $ 3,500 upon the property insured, and it had not been discharged when the loss occurred. Testimony was given, over objection, that the agent wrote the answers in the application respecting incumbrances after it had been signed by the assured, and also tending to show that the agent knew of the existence of the mortgage when the contract of insurance was made. The court instructed the jury that--

"As the local agent might by contract indorsed on the policy have waived the answer to the questions with respect to incumbrances, or might have waived the condition concerning the mortgage, so he may, by acts and conduct of dealing with the assured, do that which amounts to such waiver."

Testimony was also introduced concerning a settlement made by one Peck, an adjuster of the company, shortly after the fire occurred, by which it was agreed between the insured and the adjuster that, if a reduction of $ 112 was made from the amount claimed, the loss would be paid at once. In respect to this defense the court charged the jury:

"If you find from the evidence that, after the loss by fire of the insured property, on or about January 22, 1887, Peck, the adjuster of the company defendant, went on the plaintiffs' premises and assisted the plaintiffs to make the proof of loss, and that said adjusting agent had full knowledge of the mortgage on the premises of the plaintiffs if there was a mortgage, and that said adjusting agent of defendant, with full knowledge of all the facts, agreed with the plaintiffs, as a final settlement of the loss, to pay plaintiffs the sum of $ 1,488, as such settlement, and that the plaintiffs agreed with the adjusting agent of defendant to accept $ 1,488 in full satisfaction of the loss under this...