Edwards v. Farmers' Mut. Ins. Ass'n of Ga.

• Decision Date: 16 May 1907
• Citation: 57 S.E. 707,128 Ga. 353
• Parties: EDWARDS et al. v. FARMERS' MUT. INS. ASS'N OF GEORGIA.
• Court: Georgia Supreme Court

57 S.E. 707

128 Ga. 353

EDWARDS et al. v. FARMERS' MUT. INS. ASS'N OF GEORGIA.

Supreme Court of Georgia

May 16, 1907

Syllabus by the Court.

Where a by-law of a mutual co-operative insurance company, which became a part of a policy of insurance issued by it, provided that "liabilities cease at once on dwellings in the association in which seed cotton or loose lint cotton is stored," a violation of such provision avoided the policy, although the storing of the seed cotton was done by a tenant to whom the insured had rented or leased the premises and delivered control, and without the knowledge of the insured.

Notice to the company that the property was rented to a tenant, and its continuing to receive payment of premiums or assessments from the owner, did not operate as a waiver of the terms of the policy prohibiting the storing of seed cotton in the dwelling house.

Error from Superior Court, Walton County; C. H. Brand, Judge.

Action by B. J. Edwards and others against the Farmers' Mutual Insurance Association of Georgia. Judgment for defendant, and plaintiffs bring error. Affirmed.

Ben J Edwards, for plaintiffs in error.

Napier & Cox, for defendant in error.

LUMPKIN J. (after stating the facts).

The defendant is a mutual co-operative insurance company. The by-laws of such a company, adopted in pursuance of the charter and existing at the time of the issuance of a policy become a part thereof, and the assured is presumed to have notice of them. Civ. Code 1895, § 2135. A by-law of this company, in existence when the insurance was effected, declared that "liabilities cease at once on dwellings in the association in which seed cotton or loose lint cotton is stored." The policy on its face provided that "the association and the insured shall be governed by the by-laws of the association." The parties had a right to make the contract of insurance, and to include as one of its terms that the liability on a dwelling house should cease at once upon the storage of seed cotton in the house. The contract was so made, and it was binding. Ostrander on Fire Ins. (2d Ed.) pp. 706, 707. §§ 329, 330. Seed cotton was stored in the house, and it was destroyed by fire while the cotton was there. It was ordinarily used as a residence by a tenant and his family, and was a dwelling, within the meaning of the by-law.

It is contended that because the owner had rented the property reserving no control over it, and the storing of the cotton in the house was the act of the tenant, unknown to the owner, it did not avoid the policy. The exact question has not been decided in this state. In Adair v. Southern Mutual Ins. Co., 107 Ga. 297, 33 S.E. 78, 45 L.R.A. 204, 73 Am.St.Rep. 122, where the policy under consideration provided for a forfeiture "by any change in the use or condition of the building, including additions or repairs, or by the erection of other buildings, or in any other manner by which the degree of the risk is increased, unless due notice is given to the company and a new agreement is entered into," it was held that the words "change in the use or condition" referred to a change of a permanent nature, and not to a mere temporary use. In discussing the question whether the act of the tenant would affect the insurance of the landlord, Mr. Justice Lewis (page 305 of 107 Ga., page 82 of 33 S.E. [ 45 L.R.A. 204, 73 Am.St.Rep. 122]) said: "We are inclined to think,...