Grabbs v. Farmers' Mut. Fire Ins. Ass'n

• Decision Date: 05 December 1899
• Citation: 125 N.C. 389,34 S.E. 503
• Court: North Carolina Supreme Court
• Parties: GRABBS et al. v. FARMERS' MUT. FIRE INS. ASS'N.

34 S.E. 503

125 N.C. 389

GRABBS et al.

v.FARMERS' MUT. FIRE INS. ASS'N.

Supreme Court of North Carolina.

Dec. 5, 1899.

Insurance—I nsurable Interest—Instructions—Forfeiture—Waiver—Evidence.

1. Since partners transacting business as an unincorporated company and purchasing land in the company's name have an insurable interest in such property, where plaintiffs composed an unincorporated company, to which a deed conveying the property had been delivered, they had an insurable interest therein, and were its owners.

2. A fire policy provided that it should be void if assured's interest was not properly stated therein, or should be other than unconditional and sole ownership, and that no agent had power to waive any of its provisions except in writing. The agent of an unincorporated company fully informed the assurer's agent as to the ownership of the property, who thereupon insured it in the agent's name. Held that, since the conditions in a policy working forfeiture are matters of contract, and may be waived, and the knowledge of a local agent issuing a policy is the knowledge of the insurer, the members of the company were entitled to recover for a loss under the policy, though no waiver affecting title was indorsed thereon.

3. Admission of testimony of assured's agent as to statements made by him to assurer's soliciting agent respecting ownership of property insured was proper where assurer's agent filling out the policy had previously testified that he filled it from memoranda furnished by such soliciting agent.

Appeal from superior court, Stokes county; Shaw, Judge.

Action by V. T. Grabbs and others against the Farmers' Mutual Fire Insurance Association to recover on a fire policy. From a judgment in favor of plaintiffs, defendant appeals. Affirmed.

J. T. Morehead, for appellant.

Jones & Patterson and A. M. Stack, for appellees.

DOUGLAS, J. This is an action brought upon a policy of insurance containing the following stipulations: "This entire policy shall be void * * * if the interest of the insur ed in the property be not truly stated herein, * * * or if the interest of the insured be other than unconditional and sole ownership, or if the subject of insurance be building on ground not owned by the insured in fee simple, * * * and no officer, agent, or other representative of this association 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 or conditions, unless such waiver, if any, shall be written upon or attached hereto." The defendant contends that these conditions have been violated, inasmuch as V. T. Grabbs, to whom alone the policy was nominally issued, was not sole owner of the property, which stood in the name of the King's Cabin Farmers' Alliance Tobacco Manufacturing Company, which was not incorporated, and that no waiver affecting the title is indorsed on the policy. It also claims that the insured forfeited the policy by failing to pay his dues to the association, which appears to be purely mutual. The plaintiffs contend that they have not forfeited their membership, and that the association issued the policy with full knowledge, through its agent, of all material facts connected with the title to the property, thereby waiving the conditions now set up in defense. The issues and answers thereto are as follows: "(1) Did defendant execute and deliver to V. T. Grabbs the contracts of insurance referred to in the pleadings? A. Yes. (2) Did defendant waive the condition in the policy as to the sole ownership of the property by V. T. Grabbs? A. Yes. (3) Are the plaintiffs the owners of the property destroyed, as alleged in paragraph 2 of complaint? A. Yes. (4) Did the defendant insure said buildings in the name of V. T. Grabbs for the use and benefit of plaintiffs as alleged? A. Yes. (5) Had V. T. Grabbs forfeited his membership in defendant, company at the time of the alleged fire, as alleged in defendant's answer? A. No. (6) Did plaintiffs make proper proof of loss in accordance with the terms of said policy? A. Yes. (7) Did the defendant waive its right to arbitrate the alleged loss under said policy? A. Yes. (8) What damages, if any, are plaintiffs entitled to recover? A. Eight hundred dollars, with interest at 6 per cent. from 18th April, 1896." There was evidence tending to establish the plaintiffs' contentions on all the issues. The plaintiff Grabbs testified in part as follows: "When Vest brought the policy, he told me he would have to issue it in my name; that it could not be done in any other way. I told him it did not belong to me. I don't know that I called off every name. I told him that I was not the sole owner of it; that I was looking after it." J. L. Vest, a witness for defendant, testified that "he brought the policy to V. T. Grabbs; put the memoranda at the bottom of the policy. I didnot waive any conditions of the policy except one, entered at the bottom of the policy. I did not know that any one but Grabbs was the owner of the property. Question of ownership was not raised." But on cross-examination the same witness testified as follows: "I was agent of the company. I went to Grabbs because J. C. Wall had taken a memorandum of the insurance. I don't know whether Wall was agent. He was advertiser and solicitor for defendant company. Grabbs told me, some weeks before I delivered the policy, he was not the sole owner. I told him he could insure the property in his name. His character is good. I knew these men had built this Alliance factory. Wall's business was to solicit insurance for the defendant company, and the memoranda he took had the name, post office, and description of property. I filled out the policy from this memoranda. I got 20 per cent. of premium paid by Grabbs. Some weeks before this I was talking to Grabbs as agent of the company, and he told me he was not the sole owner of the property, but had charge of the property. I told him he was the proper party to have it insured. I never knew the names of all the stockholders. I knew J. W. Kruger, Kiger, and Grabbs." Grabbs, being recalled, testified under exception, as follows: "J. C. Wall came, and wanted to insure the property. I told him all we had to insure was the factory, and he went and looked at the factory, and came back, and said he could insure it in my name. I told him to whom it belonged. Wall went off with his memoranda, and Vest came in a few days with the policy." The following is taken from the statement of the case: "Among other things, the court charged the jury upon the second issue as follows: 'The contract of insurance in this case provides that the policy shall be void if the interest of the insured be other than unconditional and sole ownership, unless the waiver of this condition be indorsed on the policy. The court charges you that, if you believe the evidence in this case, V. T. Grabbs, the insured, named in said policy, was not the sole owner of the property insured, and that the waiver of this condition is not indorsed on the policy, and the plaintiffs cannot recover in this action unless the jury further finds from the evidence that the defendant company through its agent waived this condition. As to the waiver, the court charges you that If you find upon the evidence that V. T. Grabbs, before receiving the policy, honestly, frankly, and fully disclosed to the agent of defendant company the real facts in regard to the ownership of said property, and that said Grabbs was informed by said agent that it was proper to take out the policy in his own name, and that said Grabbs was induced to take out said policy in his own name, and to pay the premium thereon, by the assurance of the agent that this was the proper way to do, then the defendant waived the aforesaid condition in his policy, and the jury should an swer the second issue yes. (Defendant excepted to the above charge.) The burden is upon the plaintiff to show by preponderance of evidence that the defendant waived said condition, and, if the plaintiff has not shown it by a preponderance of the evidence, the jury should answer the second issue no.' Upon the third issue the court charged the jury that if they found from the evidence that the plaintiffs were members of the King's Cabin Farmers' Alliance Tobacco Manufacturing Company, and composed said company, and that Spainhour and wife executed and delivered to said company the deed offered in evidence, so far as this action is concerned, they had an insurable interest in said property, and were the owners of said property, and they should answer the third issue yes. The defendant excepted. The court charged the jury fully upon all the issues, and there was no exception to any part of said charge except as above stated."

We are of opinion that there was no error either in the admission of testimony or the charge of the court. The deed of Spainhour to the King's Cabin Farmers' Alliance Tobacco Manufacturing Company, made upon a valuable consideration, conveyed at least an equitable title in the land to the individuals composing the partnership. Murray v. Black-ledge, 71 N. C. 492; Simmons v. Allison, 118 N. C. 763, 776, 24 S. E. 716; Bates, Partn. § 296; George, Partn. p. 112. Having thus an equitable, if not a legal, title to the land, they had an insurable interest therein. 1 May, Ins. §§ 86, 87; Wood, Ins. § 257 et seq.; 2 Beach, Ins. § 863; Ostr. Fire Ins. § 60. The last-named author says on page 209: "Any person may insure who has an estate in the property subject to damage or destruction by fire. An insurable interest does not necessarily imply ownership." In the well-considered case of Berry v. Insurance Co., 132 N. Y. 49, 30 N. E....