Franklin Fire Ins. Co v. Bolling

• Decision Date: 12 June 1939
• Citation: 3 S.E.2d 182
• Court: Virginia Supreme Court
• Parties: FRANKLIN FIRE INS. CO. v. BOLLING.

3 S.E.2d 182

FRANKLIN FIRE INS. CO.

v.BOLLING.

Supreme Court of Appeals of Virginia.

June 12, 1939

.

Rehearing Denied Sept. 19, 1939.

Error to Circuit Court, Buchanan County; Alfred A. Skeen, Judge.

Action on fire policy by Anne Boiling against the Franklin Fire Insurance Company. To review the judgment, the Franklin Fire Insurance Company brings error.

Affirmed as amended.

Argued before CAMPBELL, C. J., and HOLT, HUDGINS, GREGORY, BROWNING, EGGLESTON, and SPRATLEY, JJ.

George C. Peery, of Tazewell, and Alexander H. Sands, of Richmond, for plaintiff in error.

Roland E. Chase and S. H. & Geo. C. Sutherland, all of Clintwood, for defendant in error.

HOLT, Justice.

This case is before us on a writ of error to a judgment of the Circuit Court of Buchanan county. That judgment, supported by a jury's verdict, rests upon a fire insurance policy issued to plaintiff by the defendant company.

Henry Boiling and his son, Clarence, conducted a general merchandise business at Pound in Wise county. A part of their stock in trade they carried to Bull creek in Buchanan county, and in June, 1936, went into that business in that place also. Clarence, who was the son of Henry, was the husband of Anne. Their domestic relations were unsatisfactory, and they separated in August, 1936. That separation resulted in a divorce in January, following. Property rights were adjusted. Clarence turned over to Anne his interest in this stock of goods, as did his father. Title to the storehouse was in the father and continued in him. Anne, who in that manner came into complete control, wished to take out fire insurance which would completely cover her undertaking. The amount thereof finally settled upon was $1,200 on the building, $1,200 on furniture and fixtures, and $6,000 on her stock of goods. This insurance was distributed among seven companies and includes the policy in judgment. It bears date as of December 2, 1937, and was delivered to the insured on December 14th, following. Fire, which resulted in a total loss, broke out at about 1:30 A. M. on December 25, 1937. This policy covered $200 on the building, $860 on the stock in trade, and $200 on the furniture and fixtures. Loss was complete. In plaintiff's proof of loss she valued the building at $4,000, merchandise at $9,000 and furniture and fixtures at $2,138.

Among other policy stipulations are these:

"This entire policy shall be void, unless otherwise provided by agreement in writing added hereto,

"Ownership, etc. (a) if the interest of the insured be other than unconditional and sole ownership; or (b) if the subjectof insurance be a building on ground not owned by the insured in fee simple; or (c), if, with the knowledge of the insured, foreclosure proceedings be commenced or notice given of sale of any property insured hereunder by reason of any mortgage or trust deed; or (d) if any change, other than by the death of an insured, take place in the interest, title or possession of the subject of insurance (except change of occupants without increase of hazard); or (e) if this policy be assigned before a loss."

The validity of these provisions cannot be questioned. Westchester Fire Ins. Co. v. Ocean View Pleasure Pier Co., 106 Va. 633, 56 S.E. 584; Palmetto Fire Ins. Co. v. Fansler, 143 Va. 884, 129 S.E. 727; North River Ins. Co. v. Belcher, 155 Va. 588, 155 S.E. 699; Home Ins. Co. v. Miller, 163 Va. 231, 175 S.E. 746. Waiver of them, except under certain circumstances, is prohibited by the policy itself:

"Waiver. No one shall have power to waive any provision or condition of this policy except such as by the terms of this policy may be the subject of agreement added hereto, nor shall any such provision or condition be held to be waived unless such waiver shall be in writing added hereto, nor shall any provision or condition of this policy or any forfeiture be held to be waived by any requirement, act or proceeding on the part of this Company relating to appraisal or to any examination herein provided for; nor shall any privilege or permission affecting the insurance hereunder exist or be claimed by the insured unless granted herein or by rider added hereto."

Of course a company may waive provisions which it had inserted in the policy for its own protection, and this plainly it may do through an accredited agent. Ordinary fire insurance company agents, with power to select risks and to issue policies, are within prescribed territorial limits general agents and may waive unconditional ownership in the insured. Union Mutual Life Ins. Co. v. Wilkinson, 13 Wall. 222, 20 L.Ed. 617; Georgia Home Ins. Co. v. Kinnier's Adm'x, 69 Va. 88, 28 Grat. 88; Nat'l Liberty Ins. Co. v. Jones, 165 Va. 606, 183 S.E. 443.

"The well-established rule, in cases such as this, is that, where, prior to the issuance of a policy containing the provisions hereinabove quoted, the insurer, or its agent, has knowledge, actual or imputed of facts which under the express terms of the policy render it void or unenforceable from its inception, and then issues the policy, it is equivalent to an assertion by the insurer that such facts do not invalidate the policy, and, if the insured has acted in good faith, the insurer is hereby estopped, after loss, from claiming that such facts avoid its liability thereunder." North River Ins. Co. v. Belcher, supra [155 Va. 588, 155 S.E. 703]. See, also, Sands v. Bankers' Fire Ins. Co, 168 Va. 645, 192 S.E. 617.

The right to rely upon estoppel in these circumstances has not been abrogated by the act of 1928, entitled "An Act to prescribe the form and require the use of a standard fire insurance policy in the State of Virginia." Acts 1928, pages 763-766, chapter 256, Code, section 4305a. Of course the disclosure must be complete before it can be invoked. To mention one defect and not another is not enough. North River Ins. Co. v. Belcher, supra; Home Ins. Co. v. Miller, supra.

Anne Boiling testified that she told the insurance agent, W. Clyde Dennis, before the policy issued, that she did not own the storehouse building but that it was owned by her father-in-law. Mr. Dennis' evidence is to the effect that she did not, and he tells us that it was not until the 24th of December that he found out what the situation was. A jury question was thus presented, and we are bound by its verdict.

When we come to deal with furniture and accessories, the situation is somewhat different.

There was a meat case, a meat slicer and a McCaskey register valued in proof of loss at $1,320. As we have seen, there were seven policies and in each these three articles were covered to the extent of $200. The meat case was purchased from the C. Schmidt Company of Cincinnati; the meat slicer was bought through Harry Baldwin of Bluefield, West Virginia, who represented some unnamed company. The record does not show from whom the cash register came. All were held under conditional sales contracts and had not been fully paid for when the policy was written, although payments due seem to have been made, unless it be that there was something in arrears on the meat slicer. There appears to have been due on the cash register $160 and on the meatcase three installments of $36.40 each. If these articles were held under conditional sales contracts, then Anne Boiling was not their unconditional owner. But it is said that the reservation as to the meat case is in an Ohio contract and is therefore, in substance, but a chattel mortgage; and we are referred to 55 C.J., p. 1194, and to Code, section 6192a. If we accept this textbook's statement of the law as evidence, the situation would not change. In Corpus Juris it is said: "In many jurisdictions, it is held that the security so retained is a lien, or in the nature of a lien." Among the authorities cited to sustain this statement is Parker Appliance Co. v. Cooperative Mach. Co., 110 Ohio St. 255, 143 N.E. 891. There the right to maintain a suit in equity to foreclose with such a lien is sustained. Reference, however, is made to Rev.St.Ohio, sec. 4155-3 (now section 8570, General Code), which gives to the vendor the right of repossession, provided there is refunded to the purchaser a percentage of the amount paid that is to say, in Ohio these transactions may be treated as chattel mortgages or as conditional sales. This is in principle the law in Virginia. Repossession may be sought or a suit in equity may be instituted to foreclose the lien. Lloyd v. Federal Motor Truck Co., 168 Va. 72, 190 S.E. 257.

In Virginia Fire & Marine Ins. Co. v. Lennon, 140 Va. 766, 125 S.E. 801, 38 A.L.R. 186, it was held that while as between vendor and vendee a conditional sales contract may be but a short form of chattel mortgage, yet that this is not always true when we come to consider the effect of the sole ownership clause in insurance policies. The insured is not, within the meaning of the policy contract, an unconditional owner.

Moreover, there are no copies of the contracts dealing with the meat slicer and the McCaskey register in the record. All that appears is in this excerpt from it:

"By Mr. Peery:

"I think one or perhaps both are docketed in the clerk's office. As I...