Fireman's Fund Ins. Co. v. Rowland Lumber Co.

• Decision Date: 17 October 1923
• Docket Number: 224.
• Parties: FIREMAN'S FUND INS. CO. v. ROWLAND LUMBER CO.
• Court: North Carolina Supreme Court

119 S.E. 362

186 N.C. 269

FIREMAN'S FUND INS. CO. v. ROWLAND LUMBER CO.

No. 224.

Supreme Court of North Carolina

October 17, 1923

Appeal from Superior Court, Duplin County: Calvert, Judge.

Action by the Fireman's Fund Insurance Company against the Rowland Lumber Company. Judgment for plaintiff, and defendant appeals. No error.

That insurer of tobacco might have successfully contested claim of insured and relieved itself of liability by reason of a stipulation for "unconditional and sole ownership," did not affect its right of subrogation to the rights of the insured against one negligently causing the fire.

Civil action tried upon the following issues:

"(1) Was the tobacco belonging to J. A. Ricks and tenant, J. S Wagstaff, burned by the negligence of the defendant, as alleged in the complaint? Answer: Yes.

(2) Did J. A. Ricks and J. S. Wagstaff, jointly, insure said tobacco and, if so, was it under the six insurance policies offered in evidence? Answer: Yes.

(3) What amount, if any, is the plaintiff entitled to recover of the defendant? Answer: $2,181.95 and interest from date that insurance was paid."

Judgment on the verdict in favor of plaintiff. Defendant appealed assigning errors.

R. D. Johnson and Stevens, Beasley & Stevens, all of Warsaw, for appellant.

H. D. Williams, of Kenansville, D. L. Carlton, of Warsaw, and Geo. R. Ward, of Wallace, for appellee.

STACY J.

J. A. Ricks, J. S. Wagstaff, and P. L. Page owned some tobacco, which had been cured and stored in a pack barn, located on certain leased premises. On September 23, 1919, this tobacco was destroyed by fire. Defendant's liability for the fire is established by the present verdict. The tobacco in question was insured by plaintiff against loss or damage to the extent of $3,000. Following its destruction by fire, plaintiff paid to Ricks, Wagstaff, and Page $2,181.95, the actual loss sustained, and it now brings this suit to recover said amount from the defendant, alleging that, by reason of the provisions, contained in the several policies and payments thereunder, plaintiff has become and is now subrogated, to the extent of such payments, to all the rights of recovery existing in favor of J. A. Ricks, J. S. Wagstaff, and P. L. Page, and against the defendant, on account of the wrongful, careless, and negligent burning of said tobacco. For this position plaintiff relies upon the following authorities: Insurance Co. v. Railroad, 132 N.C. 75, 43 S.E. 548; Cunningham v. Railroad, 139 N.C. 434, 51 S.E. 1029, 2 L. R. A. (N. S.) 921; Fidelity Co. v. Grocery Co., 147 N.C. 513, 61 S.E. 375; Insurance Co. v. Railroad, 165 N.C. 136, 80 S.E. 1069, and cases there cited. See, also, Powell v. Water Co., 171 N.C. 290, 88 S.E. 426, Ann. Cas. 1917a, 1302; U.S. v. Amer. Tob. Co., 166 U.S. 468, 17 S.Ct. 619, 41 L.Ed. 1081.

Defendant seeks to avoid liability to the plaintiff in the present suit, not because of any want of negligence on its part in setting out the fire, but because of a stipulation in each of the policies to the effect that the insurance company shall not be liable for loss or damage occurring, "if the interest of the insured [in the property] be other than unconditional and sole ownership." The policies were taken out in the name of J. A. Ricks, as sole owner; whereas his tenant, J. S. Wagstaff, and P. L. Page each owned an interest in the property, and this fact was known to the plaintiff's agent at the time of the issuance and delivery of said policies. Indeed, when plaintiff made settlement for the loss, the money was divided and paid to the different owners according to their respective interests. Hence the stipulation of "unconditional and sole ownership" was waived by the insurance company, making its liability absolute under the policies. The rule applicable is stated by Douglas, J., in Horton v. Insurance Co., 122 N.C. 503, 29 S.E. 945, 65 Am. St. Rep. 717, as follows:

"It is well settled in this state that the knowledge of the local agent of an insurance company is, in law, the knowledge of the principal; that the conditions in a policy working a forfeiture are matters of contract and not of limitation, and may be waived by the insurer; and that such waiver may be presumed from the acts of the agent"--citing a number of authorities.

See also, Johnson v. Insurance Co., 172 N.C. 147, 90 S.E. 124; Robinson v. B. of L. F. & E., 170 N.C. 548, 87...