Gitz Sash Factory, Inc. v. Union Ins. Soc. of Canton, Ltd

• Decision Date: 04 January 1926
• Docket Number: 25432
• Citation: 107 So. 232,160 La. 381
• Court: Louisiana Supreme Court
• Parties: GITZ SASH FACTORY, Inc., v. UNION INS. SOC. OF CANTON, Ltd

107 So. 232

160 La. 381

GITZ SASH FACTORY, Inc., v. UNION INS. SOC. OF CANTON, Ltd

No. 25432

Supreme Court of Louisiana

January 4, 1926

Rehearing Denied February 1, 1926

Appeal from Civil District Court, Parish of Orleans; Wynne G Rogers, Judge.

Action by the Gitz Sash Factory, Inc., against the Union Insurance Society of Canton, Limited. From a judgment for defendant plaintiff appeals.

Reversed and rendered.

John J. Reilley, of New Orleans, for appellant.

Spencer, Gidiere, Phelps & Dunbar, of New Orleans, for appellee.

LAND, J. O'NIELL, C. J., dissents. ROGERS, J., recused.

OPINION

LAND, J.

On November 10, 1920, plaintiff insured its machinery and office furniture and fixtures in defendant company for the amount of $ 5,700 for the term of one year, and paid to defendant company its premium in the sum of $ 96.90.

On April 23, 1921, plaintiff's place of business was destroyed by fire, as well as all of the property covered by the policy issued by defendant company. After notification by plaintiff to defendant company of the fire and of the loss sustained as a result thereof, defendant company refused to pay said loss, for the reason that, at the time of the happening of the fire, the property described in the policy was incumbered by a chattel mortgage, in violation of a clause contained in the policy. Plaintiff then instituted the present suit on the policy, alleging its compliance with all of the provisions of the same; and averring that the action of defendant company in refusing to pay the loss on the grounds stated would amount to a fraud upon plaintiff's rights, if said defense should prevail, for the reason that defendant company had full knowledge of the existence of said chattel mortgage at the time that the policy issued, and its conduct and action were such as to honestly lead plaintiff to believe that it would not insist upon a forfeiture because of the existence of the chattel mortgage.

Plaintiff charges in its petition that the conduct and action of defendant company in reference to the chattel mortgage condition in the policy operated as a waiver by said company of said condition, and that said company is now estopped from urging, as a defense to this suit, that provision of the policy, and demanding the forfeiture of the policy.

Defendant insurance company filed an exception of no right or cause of action to plaintiff's petition, which was referred to the merits by the trial judge, and pleaded in its answer that the policy sued upon had been breached, avoided, and annulled by the following clauses contained in the policy issued, to wit:

"This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void * * * if the subject of insurance be personal property and be or become encumbered by a chattel mortgage.

"This policy is made and accepted subject to the foregoing stipulations and conditions, together with such other provisions, agreements or conditions as may be indorsed hereon or added hereto, and no officer, agent or other representative of this company 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 indorsed hereon, or added hereto, and as to such provisions and conditions no officer, agent or representative shall have such power, or be deemed or held to have waived such provisions, unless such waiver, if any, shall be written upon or attached hereto, nor shall any privilege or permission affecting the insurance under this policy exist or be claimed by the insured unless so written or attached."

The demand of plaintiff was rejected by the court below, and plaintiff has appealed.

1. Objection was made by defendant insurance company to the parol testimony offered by plaintiff to prove knowledge upon the part of the local agent of said company of the existence of the chattel mortgage upon this property at the time the policy issued. This objection is based upon the ground that the avoidance of a policy of insurance by a chattel mortgage on the property insured cannot be waived, under the terms of the policy, except in writing, added to or indorsed on the policy.

The testimony was admitted, however, by the trial judge, as going to the effect, and not to the admissibility, of the evidence.

It is to be observed in this connection that the policy in dispute was issued by James A. Ross, the duly authorized agent in New Orleans of defendant, the Union Insurance Company of Canton, Limited.

This policy is countersigned by F. J. Hauler, as the agent of James A. Ross. Hauler admits in his testimony in the case that he was at the time the assistant manager of the fire department in the local agency of James A. Ross. While Hauler denies that he had any knowledge as to the existence of a chattel...