Gabriel v. Farmers Mut. Fire Ins. Co.

• Decision Date: 14 September 1937
• Docket Number: No. 23905.,23905.
• Citation: 108 S.W.2d 628
• Parties: GABRIEL et al. v. FARMERS MUT. FIRE INS. CO. OF ROCK TP., JEFFERSON COUNTY.
• Court: Missouri Court of Appeals

108 S.W.2d 628

GABRIEL et al. v. FARMERS MUT. FIRE INS. CO. OF ROCK TP., JEFFERSON COUNTY.

No. 23905.

St. Louis Court of Appeals. Missouri.

September 14, 1937.

Appeal from Circuit Court, Jefferson County; John H. Reppy, Special Judge.

"Not to be published in State Reports."

Action by Rudolph Gabriel and another against the Farmers Mutual Fire Insurance Company of Rock Township, Jefferson County. Judgment for plaintiffs, and defendant appeals.

Remanded with directions if plaintiffs file a remittitur, and otherwise reversed and remanded for a new trial.

R. E. Kleinschmidt, of Hillsboro, for appellant.

Edgar & Matthes, of De Soto, for respondents.

HOSTETTER, Presiding Judge.

This suit originated in the circuit court of Jefferson county on the 4th day of April, 1935, being an action on a fire insurance policy for $1,000 issued by defendant, a farmers' mutual insurance company, incorporated under the provisions of article 15, chapter 37, R.S.Mo.1929, § 6056 et seq. (Mo.St.Ann. § 6056 et seq., p. 4604 et seq.).

The petition was in conventional form, setting out that defendant by its policy insured plaintiffs against loss by fire and lightning on their described frame dwelling house, which was located on a five-acre tract in the town of Barnhart in Jefferson county, for a period of five years, beginning September 25, 1934, and that the same was totally destroyed by fire on January 17, 1935, and that plaintiffs had complied with all the terms and requirements of the policy and the by-laws of defendant, and that the house destroyed was at all times worth more than $1,000.

Defendant by its answer admitted its corporate existence and the execution and delivery of the policy and denied all other allegations contained in the petition, and, after setting out certain portions of its by-laws, which were a part of the policy, charged that plaintiffs in their application for the insurance falsely and fraudulently stated that the insured property was not subject to any mortgages or incumbrances, whereas it was subject to the lien of two deeds of trust aggregating $2,100 and subject to two judgments, and that, after the issuance of the policy, plaintiffs permitted the holder of one of said deeds of trust to obtain a policy for $1,000 from the Westchester Fire Insurance Company, and that the proceeds of the collection of said last-mentioned policy was used to discharge a portion of plaintiffs' debt to such mortgage holder, and that such action of plaintiffs was in violation of the two-thirds of value limitation clause contained in the policy sued on, which rendered the same null and void, and that plaintiffs have no legal capacity to sue and there is a defect of parties plaintiff, and that they had no insurable interest in the property, and that they are estopped from asserting any cause of action against defendant and that it had, on March 25, 1935, offered to return to plaintiffs all assessments theretofore paid to defendant, and that being refused, the same was tendered into court for plaintiffs' use.

Plaintiffs in their reply denied having made any false and fraudulent representations in their application in respect to their being the sole and unconditional owners of the property or in respect to the nonexistence of liens or incumbrances on the property, and averred that defendant's agent, who took the application for such insurance on said property, failed to make inquiry as to whether the title to the property was incumbered by mortgage or otherwise, and failed to inquire as to the true ownership of the property, and that all questions propounded by defendant's agent were truthfully answered, and that the answers were written into the application by defendant's agent, and that the application was prepared by the agent, and that as no questions were propounded to plaintiffs or either of them, defendant is estopped from asserting that plaintiffs made false and fraudulent representations as to the ownership of said property, or as to incumbrances which might have been thereon, and is estopped from denying liability on account of such incumbrances.

They further replied that after the property was destroyed by fire and defendant, after having ascertained the condition of the title as to incumbrances thereon, did not deny liability on the policy for any reason other than its claim that plaintiffs had purchased other insurance on the property, and that defendant is thereby estopped from denying liability on account of the existence of incumbrances thereon.

They further denied any defect of parties plaintiff or their alleged want of legal capacity to sue, and denied the charge that they permitted the holder of a deed of trust on the property insured, to obtain a policy of insurance on same from the Westchester Fire Insurance Company or from any other insurance company, and averred that they had no knowledge of same until after their property had been destroyed by fire, and therefore section 3 of defendant's by-laws cannot be invoked as a defense against them.

Plaintiff Rudolph Gabriel testified in general to the matters set up in the petition and in the reply. He specifically testified that Mr. Raebel, the agent who solicited the insurance, made no inquiry of him concerning mortgages on the property, while the agent testified that he did, and that Mr. Gabriel's answer was, "No." However, the application which was in evidence disclosed merely a blank space for the answer to this printed question without the "no" written in. Witness Gabriel further testified that he had no knowledge of the policy of insurance issued by the Westchester Insurance Company on the property until after the fire, and in this he was corroborated by witness Taylor, who then held the $2,100 deeds of trust, who testified that he took out and paid for the $1,000 insurance and said nothing to plaintiffs about having done so until after the house was destroyed by fire nearly four months later, and that he collected the $1,000 insurance from the Westchester Insurance Company and credited that amount on the mortgage debt.

The agent of the Westchester Insurance Company, to whom Taylor applied for the insurance, corroborated his version of the transaction.

The original application, which was signed by Rudolph Gabriel, contained an indorsement on the back thereof showing that the reason for the company's refusal to pay was because of such other insurance on the property, and the president of defendant insurance company testified that the only reason the company refused payment was because of such other insurance.

The jury returned a verdict in favor of plaintiffs for $1,000, which was followed by the rendition of a judgment thereon by the court on the 11th day of June, 1935, and the defendant, after an ineffective motion for a new trial, brings the cause to this court by appeal for review.

The defendant's first assignment of error, to the effect that the trial court should have given its proffered instruction, in the nature of a demurrer to the evidence, cannot be upheld. Under the well-recognized rule that in considering the demurrer we must take as true all the testimony adduced by plaintiff supporting his case and ignore all conflicting testimony adduced by the defendant, and give plaintiff the benefit of all reasonable and legitimate inferences arising from the testimony and also give him the benefit of all favorable testimony adduced by his adversary, we have no hesitation in approving the action of the trial court in refusing to give defendant's proffered demurrer to the evidence.

Defendant's second assignment of error, which, in effect, is that the rule that a farmers' mutual insurance company is exempted under the statute from the rule relating to waiver and estoppel, likewise cannot be upheld. An officer or authorized agent of a farmers' mutual insurance company may waive any provision of a by-law relating to matters which might void the policy the same as such officers and agents of any other insurance company. Everett v. Patrons & Farmers Mutual Fire Ins. Co., 222 Mo.App. 1010, 7 S.W.(2d) 463, loc. cit. 468; State ex rel. Williams et al. v. Daues, (Mo.Sup.) 292 S.W. 58; Ceresia v. St. Giuseppe Mutual Aid Ass'n (Mo.App.) 211 S.W. 81; Ormsby v. Laclede Farmers' Mutual Fire & Lightning Ins. Co., 98 Mo.App. 371, 72 S.W. 139; Rickey v. Mutual Fire Ins. Co., 79 Mo.App. 485; 26 C.J. p. 279, notes 15 and 16.

The contention urged by defendant that the failure of the insured to disclose the existence of mortgages and incumbrances on the property would void the policy may be considered under certain circumstances as correct, but in the instant case, according to the testimony of plaintiff he answered all questions propounded by the agent, who took the...