French v. Patriotic Ins. Co. of America, 14876-14879.

• Decision Date: 24 February 1941
• Docket Number: 14876-14879.
• Citation: 107 Colo. 275,111 P.2d 893
• Parties: FRENCH v. PATRIOTIC INS. CO. OF AMERICA and three other cases.
• Court: Colorado Supreme Court

111 P.2d 893

107 Colo. 275

FRENCH v. PATRIOTIC INS. CO. OF AMERICA and three other cases.

Nos. 14876-14879.

Supreme Court of Colorado, En Banc.

February 24, 1941

Error to District Court, Montrose County; George W. Bruce, Judge.

Action by F. C. French against the Patriotic Insurance Company of America on a fire policy, consolidated with actions by the same plaintiff against the South British Insurance Company Limited, of New Zealand, the City of New York Insurance Company, and the Orient Insurance Company of Hartford, Conn. To review judgments for defendants, based on directed verdicts, the plaintiff brings error.

Reversed and remanded.

Paul L. Littler, of Montrose, for plaintiff in error.

Moynihan-Hughes and Harrison Loesch, all of Montrose, and William F. Haywood, of Grand Junction, for defendants in error.

YOUNG Justice.

By agreement of the parties four suits against four different insurance companies were consolidated for trial in the district court. These suits were instituted by plaintiff French to recover on four fire insurance policies, each written in the amount of $2,500, insuring him against loss in case of the burning of his hotel and its contents located at Lake City, Colorado. The policies were written one each by the Patriotic Insurance Company of America, Orient Insurance Company of Hartford, Connecticut, City of New York Insurance Company, and the South British Insurance Company, Limited, of New Zealand, and were standard form policies in which the wording differed in no essential respect. At the close of all the testimony introduced on behalf of both plaintiff and defendants, the court directed verdicts for defendants, and upon such verdicts entered judgments for costs against plaintiff. These judgments in the four cases, consolidated for hearing as in the trial court, are Before us on review.

The evidence clearly establishes that plaintiff was the owner of the building which, with its contents, represented a value greatly in excess of $10,000, which is the aggregate amount of the four policies. It is conceded by defendants that if plaintiff is entitled to any judgments at all they should be for the full amount of each of the policies. While it is not disputed by defendants that plaintiff was the owner of the building and its contents in which he had an insurable interest, they contend that under the evidence--and the court so found--plaintiff was not the owner in fee simple of the ground upon which the building stood. This contention and finding, in our opinion, is supported by the evidence and we shall assume such to be the fact.

Each of said policies contains the provision that it is subject to the stipulations and conditions printed on the back thereof among which, in a page of finely printed stipulations and conditions, is to be found the following: 'This entire policy shall be void, unless otherwise provided by agreement in writing added hereto, (a) if the interest of the insured be other than unconditional and sole ownership; or (b) if the subject of insurance be a building on ground not owned by the assured in fee simple.' This provision was pleaded by the defendants as a bar to plaintiff's recovery, and by replication plaintiff set out, and by testimony established facts which he contends show a waiver by defendants of this condition of the policy. The facts upon which he relies to establish such waiver are as follows: That the policies were written through H. S. Price, an insurance agent at Montrose, Colorado; that each was a renewal of a similar policy written by the same company in the same amount for the previous year upon the same property; that at no time had the defendants or either of them asked for, demanded, or received, a written application from plaintiff for any of said fire insurance policies or renewals thereof; that defendants at no time, either Before or after writing said policies, made any inquiry of plaintiff as to the condition of the title to the land upon which the insured building was situated; that plaintiff made no representations of any kind to defendants with respect to his title to such land; that the property was inspected and examined by defendants, and approved for the purpose of said insurancw.

Whether such facts establish a waiver or estop the defendants to rely on the quoted condition of the policies is the crucial issue presented on this review. There is no suggestion of fraudulent representations or concealment on the part of plaintiff. There is no evidence, that had the true fact with respect to plaintiff's title been declared that defendants would not have approved the risk, written the insurance, or that they would have required a higher premium. There is no claim that the defendants were prejudiced in any manner by the fact that plaintiff did not have a fee-simple title to the land. That the provision of the policy relied upon by defendants to defeat recovery may be expressly waived by the agent for the companies is indicated by the qualification in the policy reciting that it shall be void 'unless otherwise provided by agreement in writing added hereto.'

In any consideration of the question of whether defendants waived the condition, the weight which they attached to the question of title is material. We deem it significant that the daily form reports to the company by Price, the local agent, as to all of the policies involved, save that of the Patriotic Insurance Company, contain certain questions to be answered by the agent with respect to the state of the insured's title. In the daily report form of the Orient Company are the following questions: 'Does the building stand on leased ground? When does the lease expire?' The South British Insurance Company asks its agents as follows: 'What is assured's title to the ground? If lease, when does it expire? Is there any dispute over title?' The City of New York Insurance Company asks the questions: 'Is the building on leased ground? When does lease expire? Has the insured privilege of renewal?' None of these pertinent questions with reference to title were answered by Price in reporting the insurance on this property and yet each one of his reports bears the stamp 'Approved,' and Price the agent, says he never was notified otherwise. In his deposition he stated that in twenty years' experience in writing fire insurance he had never made any inquiry for the information called for in those questions to be answered by him in reporting the writing of a risk, and further that the companies had never required that in his report he answer the questions regarding insured's title. If such is the practice of the companies certainly they do not deem the matter of the state of an insured's title of vital importance in passing upon the risk that issuance of a policy imposes upon them. If when the plaintiff sought from the defendants policies protecting him against loss in the event his building should be destroyed by fire--and that is the only reason men buy insurance--and tendered the premiums therefor the companies did not deem the state of his title material to a determination of whether they should accept his money, but tendered to him policies which they then knew, if their contentions be upheld, were void at the time of issuance if his title was less than fee simple, and no consideration for the premiums which he paid, having received his money, and having lulled him into a sense of security until a loss occurred, they should not now be heard to assert the vital materiality of the state of his title to defeat payment on their part for the loss which it is admitted he sustained. The records in the office of the county clerk and recorder disclosed the state of the title of the land upon which insured's building was located and they were open to the world for inspection, including defendants. If they examined such records and were satisfied with the title when they accepted plaintiff's money for premiums, they should be held to a continuance of satisfaction with that title when an obligation falls upon them. We do not hold that the companies, though privileged so to do, were required to examine the records to ascertain if plaintiff had a feesimple title to the land. They might have inquired of him as to his title and if advised that it was in fee simple they then could have relied upon his representation and issued the policies as they did, without any rider or statement therein as to the title of the land on which the building stood. The companies prepared...