Farmers' Mut. Fire Ins. Co. of Laporte Cnty. v. Olson, 10442.

• Decision Date: 17 December 1920
• Docket Number: No. 10442.,10442.
• Citation: 74 Ind.App. 449,129 N.E. 234
• Parties: FARMERS' MUT. FIRE INS. CO. OF LAPORTE COUNTY v. OLSON.
• Court: Indiana Appellate Court

74 Ind.App. 449

129 N.E. 234

FARMERS' MUT. FIRE INS. CO. OF LAPORTE COUNTY

v.OLSON.

No. 10442.

Appellate Court of Indiana, Division No. 2.

Dec. 17, 1920.

Action by Oscar E. Olson against the Farmers' Mutual Fire Insurance Company of Laporte County, Ind. Judgment for plaintiff, and defendant appeals. Reversed.

Former opinion (127 N. E. 848) superseded.

H. W. Sallwasser, Earl Rowley, and Lemuel Darrow, all of Laporte, for appellee.

NICHOLS, J.

This action was by appellee against appellant on a Farmers' Mutual fire insurance policy to recover damages for loss by reason of the destruction by fire of a frame farm residence and household goods therein. There was a trial by jury, and a verdict of $450 in favor of appellee; a judgment followed the verdict from which, after motion for a new trial was overruled, this appeal is prosecuted.

The only error relied upon for reversal that is properly assigned is the action of the court in overruling the motion for a new trial.

By section 20 of the by-laws of appellant that were made a part of the contract of insurance, which contract was made a part of the complaint and was also read in evidence, it is provided:

“If without the consent of the company in writing the property insured shall be sold or conveyed, or the interest of the parties therein be changed in any manner, whether by act of the parties or by the operation of law, then in every such case and in either of said events the policy shall cease to be in force and effect.”

It is claimed by appellant that after the policy was issued appellee sold the property to one Meyer and placed such purchaser in possession thereof, and that thereby the policy ceased and became of no force and effect.

It appears by the undisputed evidence in this case that on March 12, 1917, appellee's wife and Henry C. Meyer and wife met at the People's Trust & Savings Bank of Laporte, Ind., at which time H. H. Keller, secretary-treasurer of that institution, wrote for them a contract for the sale of the real estate upon which the building involved in this controversy was located, the consideration therefor being $3,800. This contract is not in evidence, though it was made in duplicate and left in the control of the parties involved in the real estate deal; one copy being made for the Olsons and one for the Meyers. It appears that one of the copies, or another copy, was kept with Keller in the bank. It does not appear by the direct evidence that this contract was signed by appellee. It does appear, however, that such contract was accepted by appellee, for at the time that the same was prepared a deed of conveyance was prepared, and, having been signed by appellee's wife, it was sent to appellee for execution, and on April 9, in a letter inclosing it to Mr. Keller who was acting for both parties, he stated that he understood that the interest on the deferred payments started from the date that the contract was made, or date of sale. On said March 12, 1917, Mr. Meyer, appellee's grantee in the deed, stated that “after we come to an agreement I left $600 for good faith.” The $600 referred to was left in the form of a certificate of deposit which was made “payable to the order of O. E. and May Olson on return of this certificate properly indorsed.” At the time that the $600 certificate of depositin form aforesaid was left with Mr. Keller, Meyer stated that he owned a property in Kewanee, Ill., which, if he could sell, would enable him to make an additional payment of $1,200, which with the $600 already paid would make $1,800, in which event the mortgage to be given would be for $2,000. After this date, the Meyers sold the Kewanee property and left with Keller a certificate of deposit for $1,200 “payable to the order of O. E. and May Olson on the return of this certificate properly endorsed.” At the time that such certificate was left with Keller, to wit, April 4, 1917, a mortgage in the sum of $2,000 signed by said Meyer and wife dated April 1, 1917, and acknowledged April 4, 1917, was left by Meyer with Keller. While we are unable to give the terms of the contract of sale in full, it is clear that it was of such absolute character that, coupled with the transactions hereinbefore set out, said Meyer and wife, grantees in the deed, on the faith of such contract and transactions moved from Kewanee, Ill., into the dwelling house involved, which was located upon the real estate conveyed on April 2, 1917.

It seems that an abstract was furnished by appellee to the purchasers, and that it was in their possession at the time of the fire and was destroyed by fire. It does not appear that this abstract in any way figured further in the deal. It will be observed that the deed and mortgage, both duly executed and acknowledged, and the $1,800 subject to the order of appellee, were all in the hands of the common agent before the time of the fire. There was nothing further to be done, and nothing further was done, except to deliver the papers and money to the respective parties entitled thereto. This was done some time after the fire. On April 9, 1917, said Keller, agent as aforesaid, stated in his letter to Mrs. Olson that the Meyers had a sick child at their house, and that it might be about two or three days before he could get them again, and that he would close the matter as soon as possible. In the same letter he requested that the insurance policy be sent, and that they should take care to sign the assignment part of the policy which was upon the back of it. The house involved was destroyed by fire April 14, 1917, at which time Meyer and his wife were in full possession thereof, while the insurance policy unassigned was in the possession of appellee.

Keeping before us the provision of the policy that if the property insured be sold or conveyed, or if the interest of the parties therein be changed in any manner, the policy should become void and of no effect, we proceed to determine as to whether the transaction hereinbefore set out constituted such a change of interest of the parties as to make the policy without force and effect.

In the case of Brickell v. Atlas Assurance Co., 10 Cal. App. 17, 101 Pac. 16, it was held that where under a policy of fire insurance providing that the policy shall be void if any change takes place in the interest, title, or possession of the subject of insurance, the contract for the sale and purchase of the insured premises transferring possession to the purchaser under fixed terms of payment, without any transfer or assignment of the insurance policy, or without the consent of the insured, vitiates the policy and no recovery can be had thereon. The court in its discussion of the case says that there is a distinction between the word “interest” and the word “title,” the word “interest” being broader and more comprehensive.

In Fire Ass'n of Philadelphia v. Perry (Tex. Civ. App.) 185 S. W. 374, it was held that under a policy of fire insurance a conditional sale was such a change in the interest, title, and possession of the insured property as to avoid the policy and defeat the insured's recovery thereon.

The case of Wiley v. London & Lancashire Fire Ins. Co., 89 Conn. 35, 92 Atl. 678, holds that a provision avoiding a policy in case of change of the insured's interest is valid, being reasonable because affecting the moral hazard.

Phœnix Ins. Co. of Bklyn. v. Quinett, 36 Okl. 384, 128 Pac. 722, holds that a conditional sale of an insured stock of merchandise reserving the title until the price is paid is a change of interest within the provision avoiding the policy in case of such change.

In the case of Gibb v. Fire Ins. Co., 59 Minn. 267, 61 N. W. 137,...