Froehly v. North St. Louis Mut. Fire Ins. Co.

• Decision Date: 13 November 1888
• Citation: 32 Mo.App. 302
• Parties: MARY FROEHLY et al., Respondents, v. NORTH ST. LOUIS MUTUAL FIRE INSURANCE COMPANY, Appellant.
• Court: Missouri Court of Appeals

32 Mo.App. 302

MARY FROEHLY et al., Respondents, v. NORTH ST. LOUIS MUTUAL FIRE INSURANCE COMPANY, Appellant.

Court of Appeals of Missouri, St. Louis.

November 13, 1888

Appeal from the St. Louis City Circuit Court --HON. SHEPARD BARCLAY Judge.

REVERSED AND REMANDED.

Kehr & Tittmann, for the appellant.

The charter provides that the policy shall be void unless the assured states his true title in the application. Joseph Froehly insured the property as his, whereas it was not his and in his application, which is part of the policy, stated his title to be in fee-simple, whereas he had no title in fee-simple or otherwise to the property insured. The policy therefore, was void from its inception, and the risk never attached. Loehner v. Ins. Co., 17 Mo. 247; Koontz v. Ins. Co., 42 Mo. 126; Mers v. Ins. Co., 68 Mo. 127, 131; Ins. Co. v. Barnett, 73 Mo. 364, 367; Milling Co. v. Ins. Co., 25 Mo.App. 259, 264; Roberts v. Ins. Co., 26 Mo.App. 92, 98; Ins. Co. v. Montague, 38 Mich. 548. It is settled law that a policy void in its inception is not vitalized and rendered valid by a subsequent assignment with the assent of the company. Eastman v. Ins. Co., 45 Me. 307; Ins. Co. v. Doll, 35 Md. 89; May on Insurance [2 Ed.] sec. 382, p. 573. If it were true, as claimed by respondents, that the policy was assigned to Mrs. Froehly, in due form with the assent of the company and a full knowledge on its part of the true state of the title, it would not better her position; for, as assignee, she stands in the shoes of her assignor, and can recover only if he could. Her right is wholly derivative. As the policy was void as to him it was void as to her. Bidwell v. Ins. Co., 40 Mo. 42, 46; Archer v. Ins. Co., 43 Mo. 434, 442. Persons entering into a written or printed contract are bound to examine and ascertain its contents; and if they accept it without objection they are bound by its terms, in the absence of frand or imposition. Brown v. Railroad, 18 Mo.App. 568; Moore v. Henry, 18 Mo.App. 35; Rothschild v. Frensdorf, 21 Mo.App. 318; O'Bryan v. Kinney, 74 Mo. 125; Railroad v. Cleary, 77 Mo. 634; Ins. Co. v. Fletcher, 117 U.S. 519, 31; Ins. Co. v. Buffum, 115 Mass. 343, 345; Pindar v. Ins. Co., 47 N.Y. 114, 118. The indorsement of December 22, 1880, " loss, if any, payable to Mrs. Mary Froehly as her interest may appear," has a well-defined meaning. It is an order for the proceeds in case Joseph Froehly sustains the loss insured against, leaving the relation of insurer and insured to continue unimpaired between the company and Joseph Froehly. Griswold v. Ins. Co., 1 Mo.App. 97, 100; S. C., 70 Mo. 654; Fogg v. Ins. Co., 10 Cush. 337, 346; May on Ins. [2 Ed.] sec. 378, p. 566; Bates v. Ins. Co., 10 Wall. [U. S.] 33. The indorsement must be construed according to its legal effect. It is clear that the company made and intended to make no new contract of insurance. The insurer makes no other contract than that contained in the policy. Tesson v. Ins. Co., 40 Mo. 33. By the charter every person insuring in the company becomes a member thereof, " and shall at all times be included and bound by the provisions of the act." The company is a mutual insurance company, the officers of which cannot waive an essential condition of insurance. There is a marked difference in this respect between a stock and a mutual company. May on Ins. [2 Ed.] secs. 146, 147, pp. 169, 70; Mulrey v. Ins. Co., 4 Allen 116, 118; Hale v. Ins. Co., 6 Gray 169; Gibbs v. Ins. Co., 9 Daly 203, 205; Walsh v. Ins. Co., 30 Iowa 134, 144.

Fisher & Rowell, for the respondents.

The transfer of the policy to Mary Froehly, made on the face of it by the secretary of defendant, was, under the circumstances as shown by the evidence, a good and valid transfer, and made the policy good to her, with the right to collect for the loss; was in fact a new contract of insurance and re-delivery of the policy. Griswold v. Ins. Co., 1 Mo.App. 97; S. C., 70 Mo. 654; Soloms v. Ins. Co., 3 Keys [N. Y.] 416; Titus v. Ins. Co., 81 N.Y. 418; Frost v. Ins. Co. 5 Denio [N. Y.] 154; Plinkington v. Ins. Co., 52 Mo. 181; Landers on Ins. 100, 103, and notes; Ins. Co. v. Robinson, 56 Penn. 267; Ins. Co. v. Kittle, 39 Mich. 51; Gaus v. Ins. Co., 43 Wis. 110; Hough v. Ins. Co., 22 Conn. 575; Northrop v. Ins. Co., 47 Mo. 435; Breckenrdge v. Ins. Co., 87 Mo. 62. The court properly ruled out the alleged by-laws of defendant when offered in evidence. The assignment of the policy in suit by the consent of, in fact, by the defendant's proper officers, in writing " loss if any, payable to Mary Froehly," and passing the policy over to her, amounted to a contract of insurance between her and the company. The company thereby insured her in the amount of the policy on the property covered by it, and according to the terms of the policy. Such is the legal effect of such an assignment. And the assignee can sue in her or his name on the policy. Griswold v. Ins. Co., 1 Mo.App. 97; S. C., 70 Mo. 654. And as the officers of the defendant were aware of the condition of the title at the time they made the assignment to Mary Froehly, and retained and made and collected assessments on the premium note afterwards, they will be held to have waived any defects then existing in the policy and are estopped from avoiding it now. Northrop v. Ins. Co., 47 Mo. 435. The act of the defendants here amounted to an engagement on their part that they would retain the unearned premium and regard the policy as valid, and pay the loss, if any, to the parties designated. In this case, as we set out in our reply, the defendant's officers knew at the time of the assignment of the existence of the facts upon which they sought to avoid the policy. Hayward v. Ins. Co., 52 Mo. 181; Hough v. Ins. Co., 29 Conn. 10; Pelkington v. Ins. Co., 55 Mo. 172.

OPINION

ROMBAUER P. J.

The action is on a fire insurance policy issued by the defendant which is a mutual insurance company created by special statute. The policy sued on purports to insure Joseph Froehly in the sum of fifteen hundred dollars, against loss by fire on the following property, to-wit: On frame house A., twelve hundred dollars, on frame house B., one hundred and fifty dollars, on frame stable, one hundred dollars, on store fixtures and shelving, fifty dollars.

The plaintiff Mary Froehly brings the suit as assignee of the policy, her husband Joseph being joined with her for conformity under the provisions of the practice act. The cause was tried before a jury who rendered a verdict for plaintiff in the sum of $1737.75, being total amount of insurance with interest.

The evidence adduced by the plaintiff, taken in connection with admissions contained in the pleadings, tended to show the following facts: The land whereon the buildings insured were situated was, at the date of the policy, the property of Mary Froehly; she held the legal title in fee-simple at that date, and continued to hold it until the date of the fire. Joseph Froehly had no title to the land, nor had he any insurable interest in the houses except such as resulted from the fact that they were built with his means, and that he was in possession as husband. In the written application for insurance which forms part of the policy, Froehly stated his title as being one in fee-simple, and signed and gave his premium note to the company for two hundred and twenty-five dollars, on which he paid at that date, March, 1879, $22.50, and on June 1, 1881, $33.75. In December, 1880, Froehly called at defendant's office and told its assistant secretary that the title to the land was always in his wife; that he had transferred whatever interest he had in the buildings to her, and wanted the policy to be transferred to her. The following indorsement was thereupon made on the policy by said assistant secretary: " St. Louis, Mo., December 22, 1880, loss if any, payable to Mrs. Mary Froehly, as her interest may appear." With this indorsement the policy was re-delivered to Joseph Froehly. The fire occurred March 19, 1884, and the property insured was totally lost.

As the principal defenses interposed depend on the proper construction to be given to certain provisions of defendant's charter, these provisions are set out in full.

The first section of the act provides that the corporators and their successors are incorporated for the purpose of insuring their respective dwelling-houses, stores, shops, and other buildings, household furniture and merchandise.

The second section provides: " All and every person who shall at any time become interested in said company, by insuring therein, and all their respective heirs, executors and assigns continuing to be insured therein, as hereinafter provided, shall be deemed and taken as members thereof for and during the time specified in their respective policies and no longer."

The fifth section provides: " The directors may extend the insurance of said company to every part of the United States on real and personal property within the same, with the exceptions and provisions hereinafter enacted. Insurance shall be made in all cases upon the representation of the assured contained in his application therefor, and signed by him or them, their attorney or agent, which representation shall, in fairness and good faith, state all the material circumstances within his or their knowledge which affects the risk."

The eighth section provides: " Every member of the company shall be, and is hereby bound to pay his proportion of all losses and expenses happening or accruing in and to said company, and all buildings and other property, real or personal, insured by and with said company, together with all right, title and interest of the assured to the lands on which they stand shall be pledged to said company, and the said...