Farmers & Merchants Insurance Company v. Jensen

• Decision Date: 05 October 1898
• Docket Number: 9877
• Citation: 76 N.W. 577,56 Neb. 284
• Parties: FARMERS & MERCHANTS INSURANCE COMPANY v. IVER JENSEN
• Court: Nebraska Supreme Court

76 N.W. 577

56 Neb. 284

FARMERS & MERCHANTS INSURANCE COMPANY v. IVER JENSEN

No. 9877

Supreme Court of Nebraska

October 5, 1898

ERROR from the district court of Saunders county. Tried below before SEDGWICK, J. Reversed.

REVERSED AND REMANDED.

Halleck F. Rose and Wellington H. England, for plaintiff in error:

The pleadings and proof establish a breach of the condition against change of title, and the company is not liable. (Oakes v. Manufacturers Fire & Marine Ins. Co., 131 Mass. 164; Baldwin v. Phoenix Ins. Co., 60 N.H. 164; Langdon v. Minnesota Farmers Mutual Fire Ins Ass'n, 22 Minn. 193; Milwaukee Mechanics Mutual Ins. Co. v. Ketterlin, 24 Ill.App. 188; Milwaukee Trust Co. v. Lancashire Ins. Co., 70 N.W. 81 [Wis.]; Dadmun Mfg. Co. v. Worcester Mutual Fire Ins. Co., 11 Met. [Mass.] 434; Savage v. Howard Ins. Co., 52 N.Y. 502.)

Clark & Allen, contra:

The wife of insured held the naked legal title in trust for him. She held the title subject to his order, and agreed to convey it whenever he so directed. The insurable interest was therefore unaffected by the transfer, and the company is liable on the policy. (Ayres v. Hartford Fire Ins Co., 17 Ia. 178; Sun Fire Office v. Clark, 42 N.E. 248 [O.]; Grable v. German Ins. Co., 32 Neb 645; Bailey v. American Central Ins. Co., 13 F. 254; New Orleans Ins. Co. v. Gordon, 68 Tex. 144; Imperial Fire Ins. Co. v. Dunham, 12 A. 674 [Pa.]; Diehlman v. Dwelling House Ins. Co., 43 N.W. 1045 [Mich.]; Sun Fire Office v. Wich, 39 P. 587 [Colo.]; Continental Ins. Co. v. Ward, 31 P. 1079 [Kan.]; Stephens v. Illinois Mutual Fire Ins. Co., 43 Ill. 328; Dupreau v. Hibernia Ins. Co., 43 N.W. 585 [Mich.]; Rumsey v. Phoenix Ins. Co., 17 Blatch. [U. S. C. C.] 527.)

OPINION

The opinion contains a statement of the case.

RAGAN, C.

This is an error proceeding instituted in this court by the Farmers & Merchants Insurance Company to review a judgment of the district court of Saunders county pronounced against it in favor of Iver Jensen. Jensen in his petition declared upon an ordinary fire insurance policy. The insurer interposed as a defense to the action that the contract of insurance provided that it should cease to be in force "in case any change shall take place in the title * * * of the assured in the above mentioned property" without the consent of the insurer thereto indorsed on the policy; that after the delivery of the policy the insured, his wife joining therein conveyed the real estate on which the insured property was situate, by ordinary warranty deed, to one John H. Jensen, and that the latter afterward by an ordinary warranty deed conveyed the insured property to the wife of the insured, all without the knowledge or consent of the insurer. The insured attempted to meet this defense by a reply admitting the conveyance of the title by the insured to John H. Jensen and by him to the wife of the insured, but alleging that these conveyances were made in pursuance of an agreement between the insured and his wife that the latter should and would hold the title to the property for the use and benefit of the insured and subject to his direction and control.

The judgment of the district court cannot stand. The provision in the policy that it should cease to be in force if a change should take place in the title of the insured without the consent of the insurer is a valid and reasonable provision. An insurance contract is a personal one between the insured and the insurer. An insurance company might be very willing to guaranty A against loss or damage of his property by fire, but unwilling to furnish such a guaranty to A's vendee; and it is for this reason that such a provision as the one under consideration is inserted in fire insurance policies, so that in case the insured shall transfer his title the insurer may have notice thereof and an opportunity to elect whether it will keep the policy in force in favor of the grantee or vendee; and it is because the courts recognize such a provision in an insurance policy to be a personal contract between the insurer and the insured that they hold that the violation thereof by the insured terminates the contract of insurance. (Milwaukee Mechanics' Mutual Ins. Co. v. Ketterlin, 24 Ill.App 188; Langdon v. Minnesota Farmers' Mutual Fire Ins. Ass'n, 22 Minn. 193; Oakes v....