Great American Ins. Co. v. Dover

• Decision Date: 25 April 1929
• Docket Number: 6 Div. 89.
• Citation: 219 Ala. 530,122 So. 658
• Parties: GREAT AMERICAN INS. CO. v. DOVER ET AL.
• Court: Alabama Supreme Court

122 So. 658

219 Ala. 530

GREAT AMERICAN INS. CO. v. DOVER ET AL.

6 Div. 89.

Supreme Court of Alabama

April 25, 1929

Rehearing Denied June 13, 1929.

Appeal from Circuit Court, Blount County; W. J. Martin, Judge.

Action on a policy of fire insurance by Perry Dover and E. L. Dover against the Great American Insurance Company. Judgment for plaintiffs, and defendant appeals. Reversed and remanded.

P. A Nash, of Oneonta, and Coleman, Coleman, Spain & Stewart, of Birmingham, for appellant.

J. T Johnson, of Oneonta, for appellees.

SAYRE J.

Action on a policy of fire insurance.

The pleas were: General issue; that one of the plaintiffs willfully burned the property insured; in several different forms that plaintiffs had breached a warranty against any flue built of brick on edge. To pleas 3 and 5 of the last-named class the court sustained demurrers. Plea 2 alleged a willful burning by one of the plaintiffs. Plea 6 alleged a breach of the warranty as to the flue and that the breach increased the risk of loss. Plaintiffs replied specially as follows:

"2. The defendant, with full knowledge of the alleged breach of the conditions of the said policy, agreed and promised to pay after the loss the full amount due on said policy, to-wit: eighteen hundred dollars."

To this replication, after demurrer overruled, defendant rejoined, setting up the following stipulation of the policy:

"This policy is made and accepted subject to the foregoing stipulations and conditions, and to the foregoing stipulations and conditions printed on back hereof, which are hereby specially referred to and made a part of this policy, together with such other provisions, agreements, or conditions as may be endorsed 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 endorsed 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, nor shall any privilege or permission affecting the insurance under this policy exist or be claimed by the insured unless so written or attached."

Demurrer to this rejoinder was sustained.

The indicated rulings on the pleadings are assigned for error by the defendant company, which appeals from an adverse judgment.

Section 8364 of the Code provides as follows:

"No written or oral misrepresentation, or warranty therein made, in the negotiation of a contract or policy of insurance, or in the application therefor or proof of loss thereunder, shall defeat or void the policy, or prevent its attaching unless such misrepresentation is made with actual intent to deceive, or unless the matter misrepresented increase the risk of loss."

Plaintiff's demurrer to these pleas was properly sustained for that they failed to allege that plaintiff's alleged breach increased the risk of loss. That these pleas set up a breach of warranty cannot well be denied. Brotherhood, etc., v. Riggins, 214 Ala. 79, 107 So. 44. That a breach of a warranty constitutes a good defense was the law before the enactment of section 8364 of the Code. Kelly v. Life Ins. Co., 113 Ala. 453, 21 So. 361. This court has held that the section changes prior principles governing the law of insurance no further than its terms plainly import. Sovereign Camp, W. O. W., v. Hutchinson, 214 Ala. 543, 108 So. 520. The presently important effect of the section is to render warranties of no importance, save only when they relate to matters increasing the risk of loss. The court is wholly unable to say that a flue made of bricks on edge is more dangerous than a flue in which the bricks are laid flat. It follows that the trial court committed no error in sustaining the demurrers to pleas 3 and 5. In plea 6 the defect in pleas 3 and 5 was corrected and left it with the jury under the evidence to say whether or no this warranty of the policy had been breached.

We have stated replication 2 and defendant's (appellant's) special rejoinder. It will be noted the replication alleges a promise to pay, made after the loss, by the "defendant"-not an agent-with full knowledge of the breach of the conditions of the policy, meaning breach of the warranties of the policy. If the promise alleged be treated as a new promise, it was not the promise made by the policy of insurance alleged in the complaint, and, of course, did not answer the intervening plea in the absence of a new consideration. If it be treated as a waiver-that is, as abandonment of defendant's right to defeat a suit on the policy by reason of the fact that the property insured, a dwelling, had a flue constructed of brick laid on edge-it was inoperative. In view of defendant's objection-demurrer-it was necessary to allege either that the promise was supported by a new consideration-that is, a consideration other than that which the complaint, in Code form, must be taken to imply, viz. the original premium paid or promised for the policy-or it was necessary to allege facts which would estop defendant to set up the warranties in question. No new consideration is alleged. No facts are alleged which would estop defendant to deny the binding effect of the new...