Farmers' Conservative Mut. Ins. Co. v. Neddo

• Decision Date: 24 March 1942
• Docket Number: 16635.
• Parties: FARMERS CONSERVATIVE MUT. INS. CO. v. NEDDO.
• Court: Indiana Appellate Court

40 N.E.2d 401

111 Ind.App. 1

FARMERS CONSERVATIVE MUT. INS. CO. v. NEDDO.

No. 16635.

Appellate Court of Indiana, in Banc.

March 24, 1942

Arnold Chipman & Degnan and Robert Zimmerman, all of South Bend for appellant.

Hammerschmidt & Johnson, of South Bend, for appellee.

BEDWELL Presiding Judge.

In this action the appellee, Frank I. Neddo, recovered a judgment in the amount of $1,540 against the appellant, Farmers Conservative Mutual Insurance Company, on a policy of fire insurance. The appellant is relying upon the overruling of its motion for a new trial for reversal. Under proper specifications in such motion it claims error in the following particulars, namely:

(1) Refusal of the trial court to give its Instruction No. 1 directing the jury to find for the appellant. It contends that this instruction should have been given because the evidence, without dispute, showed a violation by appellee of the "vacancy provision" contained in the policy sued upon and that there was no evidence sufficient to establish waiver of such provision.

(2) That the trial court erred in giving to the jury its Instruction No. 2. It contends that this particular instruction was erroneous because a portion thereof permitted the jury to determine whether or not the appellant had specifically waived the vacancy clause of the fire insurance policy sued on when there was no evidence to support waiver.

(3) That the trial court erred in giving to the jury its Instruction No. 3. The portion of such instruction complained of advised the jury that: "In determining whether or not the issuance of said policy of insurance pursuant to a written application therefor containing said words 'these buildings may be moved on account of railroad back 50 ft.' amounted to a waiver of the provisions of said policy suspending its operation and coverage if said premises were left vacant for a period of longer than ten days, you may take into consideration the length of time that might reasonably be required to effect a removal of the buildings described in said insurance policy 'back 50 ft.' also you may take into consideration the reasonableness or unreasonableness of said buildings being necessarily vacant or not during the period of time required to effect the removal of said buildings 'back 50 ft.'."

(4) Error of the trial court in giving to the jury its Instruction No. 5 and Instruction No. 9 tendered by appellee because such instructions submitted to the jury for determination the question of whether an appraiser selected by appellant was disinterested.

(5) That the verdict of the jury in favor of the appellee was not sustained by sufficient evidence. It contends that the evidence was insufficient to sustain the verdict because it showed, without contradiction, that appellee had violated the fire insurance policy sued upon by permitting the insured property to become vacant for more than ten days.

For an understanding of the legal propositions asserted by appellant, we state the following concerning the pleadings and the evidence:

On October 5, 1938, appellee filed his complaint against appellant to recover damages alleged to have occurred on the 22nd day of April, 1937, because of the destruction by fire of a dwelling house insured for $1,500, certain household furniture therein insured for $300, and family provisions and produce therein insured for $100 by a policy of fire insurance issued by appellant to appellee on the 5th day of March, 1936. The policy was made a part of the complaint which alleged that the plaintiff had performed all the conditions thereof on his part to be performed.

The appellant filed answer in three paragraphs, the first being in general denial; the second quoting the vacancy provision of the fire insurance policy and alleging violation thereof by the appellee in that he permitted the dwelling house destroyed by fire to become and remain vacant and unoccupied from March 1, 1937, to and including April 22, 1937; and the third setting forth a provision of the policy providing for the appointment of appraisers, one of whom should be selected by the insurer and the other by the insured, and providing for an appraisement of the loss by such appraisers and an umpire selected by them. This paragraph further alleged that on the 22nd day of July, 1937, the appellant, by notice in writing, notified the appellee of an appraiser selected by it and requested the appellee to select an appraiser, but that the appellee failed, refused and neglected to appoint an appraiser in accordance with the provisions of the policy.

The appellee filed a demurrer to the second paragraph of appellant's answer and specified in his memorandum that such answer failed to allege that the appellant returned, or offered to return, all unearned premiums. This demurrer was overruled by the trial court.

The appellee replied to the affirmative paragraphs of answer of the appellant in four paragraphs, first in general denial; the second alleging that the policy of insurance sued upon was issued after written application was made by appellee and that such written application contained the following words: "These buildings may be moved on account of railroad back 50 ft."; that appellee informed the agent of appellant that the buildings covered in such policy would be moved on account of the widening of United States Highway No. 31 at Lakeville, Indiana, and that it would be necessary for appellee to remove his goods from the buildings and the buildings would be unoccupied, and that agent of appellant had advised appellee that the matter would be taken care of in the policy and that the policy would permit the vacancy. By paragraph three of reply the appellee set forth that one W. Leslie Gunnell, who was appointed by appellant as its appraiser, was not a disinterested appraiser; that he was employed by the appellant in the adjustment of losses and that he was a partisan appraiser who was willing and anxious to serve the insurer and that by his appointment the appellant had waived the provision of the policy relied on in his third paragraph of answer. A demurrer was sustained to the fourth paragraph of reply.

At the trial, the evidence disclosed that on March 5, 1936, the appellee was the owner of two dwelling houses and a garage located upon a tract of land that abutted upon a United States and Indiana State Highway known as No. 31 and the Michigan Road; that he then made written application to appellant for a policy of fire insurance to cover such buildings and certain household furniture and provisions that were located in dwelling house number one; that at such time the State of Indiana had condemned the front fifty feet of such tract of land and it was the intention of appellee to move dwelling house number one back from the highway. That when appellee made the written application for fire insurance a description of each of the buildings was set forth therein, and at the close thereof, before the signature of appellee, there was typed the following: "These buildings may be moved on account of railroad back 50 ft." Acting on the written application the appellant, on the same day, issued its policy of insurance covering the three buildings and household goods and family provisions located in dwelling number one. Dwelling number one was insured for $1,500 and at that time was occupied by a son of appellant; dwelling number two was insured for $600 and it was occupied by appellant. The garage was insured for $100; the household goods for $300 and the family provisions for $100. The insurance was written for a term of five years, beginning on the 5th day of March, 1936, at an annual premium of $9.10. Appellee had duly paid the premium covering the first two years.

Before the policy was issued the appellee had moved dwelling number two, and in the spring of 1937 he was preparing to move dwelling number one. The son ceased to occupy the same for living purposes on March 1, 1937, but his household furniture was left therein. The appellee placed some fruit and provisions therein, maintaining a fire therein continuously after March 1, 1937, and was waiting for the ground to settle so that the house could be moved properly when the same and its contents were destroyed by fire on April 22, 1937. At that time the housemover was on the lot with his tools preparing to move the house. Following the fire and within the time provided for by the policy, the appellee made due proof of loss. Within less than a week after the fire the secretary-treasurer of appellant visited the scene of the fire, learned from appellee that the son had moved out of the house during March and was not occupying the same at the time of the fire. The appellee testified that such officer of appellant notified him that the appellant did not owe him anything under the policy. A short time thereafter, and on April 26, 1937, W. Leslie Gunnell, as an agent and adjuster for appellant, visited the scene of the fire, talked to appellee, learned that appellee's son had moved out of the house on March 8, 1937, and that the house was unoccupied at the time of the loss. Such adjuster testified that he told appellee that he had no insurance upon the burned property because his insurance contract had been violated. This adjuster was the same person that was appointed later by appellant as its appraiser.

On July 24, 1937, appellant served a written notice upon appellee which notified him that it had selected W. Leslie Gunnell as a competent and disinterested appraiser to act in its behalf, and requested that he appoint an appraiser as provided for in the policy, and that the two appraisers, and the umpire selected by them, determine the amount of the loss. Such written notice further informed appellee that the...