Everett v. Mut. Fire Ins. Co.

• Decision Date: 11 June 1928
• Docket Number: No. 16320.,16320.
• Court: Missouri Court of Appeals
• Parties: W.H. EVERETT, RESPONDENT, v. PATRONS AND FARMERS MUTUAL FIRE INSURANCE COMPANY OF JACKSON COUNTY, MISSOURI, APPELLANT.<SMALL><SUP>*</SUP></SMALL>

7 S.W.2d 463

W.H. EVERETT, RESPONDENT, v. PATRONS AND FARMERS MUTUAL FIRE INSURANCE COMPANY OF JACKSON COUNTY, MISSOURI, APPELLANT.^*

No. 16320.

Kansas City Court of Appeals. Missouri.

June 11, 1928.

Appeal from the Circuit Court of Jackson County. — Hon. E.E. Porterfield, Judge.

AFFIRMED.

Hogsett & Boyle for respondent.

John A. Sea and Kitt & Marshall for appellant.

ARNOLD, J.

By this action plaintiff seeks to recover on a policy of fire insurance issued January 31, 1921, by defendant, a mutual company organized under section 6464, Revised Statutes 1919, having its office and agent in Jackson county, Missouri, whereby it insured plaintiff's frame dwelling which was located on his land near Raytown in said county, against loss or damage by fire and lightning in the amount of $1000, for a period of five years. On July 24, 1925, during the life of the policy, the house was totally destroyed by fire. Defendant was notified of the loss by letter and thereupon the secretary and agent of defendant examined the ruins and reported to defendant's board of directors. Thereafter liability was denied and this suit followed.

The petition is formal and has attached thereto a copy of the policy; alleges payment of all assessments and that the property was totally destroyed by fire on the date above mentioned; that at the time of the fire the property was owned by plaintiff and that plaintiff had performed all conditions of the said policy incumbent upon him; that payment has been demanded but defendant has vexatiously refused to pay said loss. Judgment is sought for the face of the policy, interest thereon from November 27, 1925, ten per cent statutory penalty and twenty-five dollars attorney's fee.

The second amended answer alleges that defendant is duly incorporated under section 6464, Revised Statutes 1919, for the sole purpose of mutually insuring the property of its members and paying losses by assessment as provided by its constitution and by-laws; admits the issuance of the policy as alleged in the petition and states that on or about December 23, 1924, there was a mortgage clause placed upon the policy which provided that any loss or damage under the said policy should be payable to the Missouri Savings Association of Kansas City, Missouri, beneficiary or its assigns as their interest might appear; that said mortgage, or deed of trust, was unpaid at the time of the fire and that there is a defect in the parties plaintiff and a non-joinder of a necessary party plaintiff, to-wit, the Missouri Savings Association.

Further answering, defendant asserts that at the time of making the contract the subject of insurance covered by the policy was a dwelling house and that long prior to the date of the loss the said dwelling house had been so changed, torn down, dismantled and removed by plaintiff as to have lost its identity as a dwelling and all possibility of its being so used; that a year or more before the loss plaintiff had torn down the walls of practically all the first story of the house and had removed the material, or a great part thereof, and used the same in the construction of a new foundation a short distance away; that at the time of the loss and for a long time prior thereto the building in question had no chimney; and that the insured house had been so torn down, dismantled and changed by plaintiff that it had lost its identity as a dwelling house and that it had been abandoned for a long time prior to the alleged loss.

The answer states the defendant had no information of such change, dismantling and abandonment until after the alleged loss; that because of the matters and things stated in the answer the plaintiff had forfeited and lost all rights of recovery and the policy thereby became void; that the property alleged to have been destroyed and for the loss of which this action is prosecuted is not the property upon which the policy was issued; that the same was worthless and of no cash value.

The answer further alleges that plaintiff secured from defendant a vacancy or unoccupancy permit on April 1, 1925, expiring October 1, 1925, and in order to obtain said permit and as a condition precedent, agreed that the said property would be kept closed to prevent trespassing or entrance thereto by unauthorized persons. The answer asserts that at the time said permit was issued and attached to the policy defendant thought it was issuing same for the dwelling house insured and had no knowledge or information that the same had been dismantled, as alleged in the answer; that the part of the building which remained was open and that such facts were not made known to defendant and were purposely and intentionally concealed by plaintiff; that said parts of the building were continuously open before and from the date of the issuance of said permit, up to and including the time of the alleged loss and were not kept closed and secured. The answer pleads section 2 of the by-laws of the defendant company, as follows:

"In case of direct loss or damage by fire or lightning to any building or other property insured in the company, the owner thereof. his agent or attorney, within ten days thereafter shall file with the secretary of the company his written statement of said loss or damage, setting forth whether by fire or lightning, how the same occurred (so far as is known) and the extent of loss or damage, all to be verified by oath and attested by two disinterested witnesses, also under oath authorized by law. In case of direct loss or damage on livestock by lightning, the same shall be reported to an officer or director of the company within seventy-two hours after the same has occurred, and failure to make such a report in said time shall bar any claim against the company."

And the answer states that neither plaintiff nor anyone for him gave notice as provided in said section; that the application, policy, constitution and by-laws all constitute the contract of insurance and provide that in the event of loss the liability of defendant shall not exceed the actual cash value of the property; that plaintiff's application, upon which the policy was issued, provides:

"It is expressly understood and agreed by and between the parties to this contract that in the event of loss under the policy issued on this application the limit of claim against the company will not exceed the actual cash value of the property at the time of such loss."

And the policy sued upon contains the following provision:

"The amount of loss or damage to be estimated according to the actual cash value of the property at the time of the loss, and to be paid after receipt of proper proofs of the same required by the company, which shall have been made by the assured and received at the office of the company and the loss shall have been ascertained and proved in accordance with the terms and provisions of the constitution and by-laws of the company."

That sections 3 and 8 of the by-laws provide:

"In no case will more insurance be paid on any one article, class, animal or building, than the actual cash value at time of loss."

"This company will not insure vacant or unoccupied farm buildings, and will not be liable for or pay any losses on any farm building which has been vacant or unoccupied seven days previous to the occurrence of the loss; unless consent thereto be endorsed on the policy by the company."

And the answer further states that section 8 of said by-laws also provides:

"Failure of the assured to notify this company of any change of the flue risk, increasing the hazard, shall render his or her insurance void."

And that, under this section, the tearing down and dismantling of the flue or chimney, as alleged in the answer, increased the hazard and thereby rendered the contract of insurance void. These allegations in the answer are followed by a general denial of all allegations of the petition not specifically admitted therein.

Tender is pleaded in the answer, as follow:

"Defendant further says that plaintiff, W.H. Everett, at the time of making the application and issuance of the policy in question, paid to the defendant the sum of $4, and since the issuance of said policy has paid to the defendant four assessments, to-wit: Assessment No. 9, $3.34; assessment No. 10, $3.34; assessment No. 11. $5, and assessment No. 12, $3.33, amounting to in all the sum of $19.01, which, together with the interest thereon, defendant tenders to the plaintiff W.H. Everett and pays the same into this court and into the hands of the clerk of this court for the plaintiff, W.H. Everett."

The reply is a general denial. A jury trial resulted in a verdict for plaintiff in the sum of $876, including interest. Judgment was entered accordingly. Motions for a new trial and in arrest were ineffectual and defendant appeals.

It is charged the court erred in refusing defendant's instructions in the nature of demurrers offered at the close of plaintiff's case and at the close of all the evidence. Eight points are raised by defendant in its brief, of which the following appear not to be refuted: (1) There is but one provision of statutory law applicable to defendant company, i.e., section 6464, Revised Statutes 1919. (2) Members of a mutual insurance company are presumed to know the provisions of its articles of incorporation and by-laws. (3) The charter and by-laws being a part of the policy will be construed with it. (4) The measure of loss is not the value of the thing destroyed at the time of the loss and is not to be based upon the cost of replacing the thing destroyed. (5) A policy of insurance upon a building is an insurance upon the building as such, and not upon the material of which it is composed.

These points must be construed as general statements of the law to which plaintiff does not object, and while defendant furnishes citations in support of the same, we think it unnecessary to consider them in detail and they will be considered only in...