Hart v. Home Mut. Ins. Ass'n of Iowa
| Decision Date | 24 September 1929 |
| Docket Number | 38758 |
| Citation | 226 N.W. 781,208 Iowa 1030 |
| Parties | WILLIAM S. HART, Appellee, v. HOME MUTUAL INSURANCE ASSOCIATION OF IOWA et al., Appellants |
| Court | Iowa Supreme Court |
Appeal from Allamakee District Court.--H. E. TAYLOR, Judge.
Defendant Union Mutual Fire Insurance Association issued to plaintiff in November, 1921, a fire insurance policy, and later reinsured in and turned over its business to the defendant Home Mutual Insurance Association. Action is now brought on this policy. The court directed verdict in favor of plaintiff. Defendants appeal.
Reversed.
Mears Lovejoy, Jensen & Gwynne and H. Haehlen, for appellants.
Hart & Hart and A. E. Sheridan, for appellee.
MORLING J. ALBERT, C. J., and DE GRAFF, KINDIG, and WAGNER, JJ concur.
The insured property was a barn situated on a farm of 1,800 (the application says 1,600) acres. There was a mortgage of $ 10,000 on the entire farm at the time the insurance sued for was written. Plaintiff did not produce the policy, for the reason, as he testified, that he was unable to find it, and did not know what became of it. He said his recollection was that he had the policy at the time the barn was burned; that the policy was just the same as another policy which was produced, except difference in description, name of the insured, amount of insurance, and date. This latter policy, as set out in the abstract, does not show copy of application attached. Plaintiff testified that "no application for insurance was attached to the policy sued upon." Defendant produced plaintiff's application. The application was for $ 4,000 on the barn "while located" on a particularly described quarter section. Following this description, the application proceeded:
* * *"
Defendant offered, but was denied the right, to prove that there were mortgages on tracts of the farm other than the quarter section particularly described. Defendant contends: 1. That the incumbrance was thereby misrepresented. 2. That a new mortgage of $ 12,000 which, after the issuance of the policy, was placed upon the entire farm, in lieu of the $ 10,000 mortgage shown in the application, voided the policy. 3. That the policy was voided because of failure of assured to pay assessments.
I. As the judgment must be reversed on another ground, and new trial may possibly follow, we refrain from commenting on the question whether a copy of the application is shown to have been or not to have been attached to the policy, further than to say that the evidence on neither side is, from the viewpoint of the appellate court, convincing.
As we construe the application, however, the representation as to the incumbrance related only to incumbrance upon the particular quarter section on which the buildings were located. The rejection of the evidence of the existence of mortgages on other tracts was, therefore, not error.
II. It is undisputed that the mortgage, at the time the policy was issued, was for $ 10,000, and that, after it was issued, the $ 10,000 mortgage was replaced by one for $ 12,000. The policy declares that, unless otherwise provided, it shall be void if the subject of insurance be or become incumbered by lien, mortgage, or otherwise, created by voluntary act of the insured, or within his control. Plaintiff argues that the new mortgage did not increase the incumbrance, because, as he asserts in argument, the new mortgage included past-due interest and taxes, which brought the original incumbrance up to $ 12,000. The evidence, however, does not bear out this contention. Plaintiff testified that the mortgage for $ 12,000 was a renewal of the $ 10,000 mortgage; that, at the time he filled out the application, he He also testified that he could not He says nothing about taxes. Prima facie, the execution of the $ 12,000 mortgage was a violation of the condition of the policy, and invalidated it. Lee v. Agricultural Ins. Co., 79 Iowa 379, 44 N.W. 683; 26 Corpus Juris 246; State Cent. Sav. Bank v. St. Paul F. & M. Ins. Co., 184 Iowa 290, 299, 168 N.W. 201; Sections 8981, 9018, Code of 1927.
Thus it became incumbent on plaintiff to show that the new incumbrance was not, as it purported to be, for an increased amount, and therefore not an increase of hazard. Even if full effect be given to plaintiff's testimony, the existing incumbrance amounted to only $ 11,000, while the new one was for $ 12,000.
Plaintiff further argues that John J. Hart was the agent of the company, and knew of the making of the $ 12,000 mortgage; that the company is chargeable with his knowledge; and that, with such knowledge, the company, instead of canceling the policy, collected and retains assessments, without offer to refund them. The only evidence of the agent's knowledge is the testimony of the plaintiff that:
"I knew that John J. Hart, the agent, knew of that $ 10,000 at the time I got the insurance, and I knew that he knew of the new mortgage to the Land Bank Company, and I knew he had collected premiums, as agent of that company, after he knew of the new mortgage."
Defendants made proper motion to strike the statement with reference to what plaintiff knew that the agent knew, but the motion was overruled. While error in this ruling is not assigned, yet, in view of the new trial, and also for a complete discussion of the question under consideration, it is proper to say that the testimony was incompetent, and should have been stricken.
John J Hart, though a witness for plaintiff, did not testify to having the knowledge which plaintiff imputes to him, nor to collecting assessments from plaintiff. In reference to his authority, he testified, in substance, that his authority was to solicit insurance, to take and send in applications, deliver policies, and collect premiums, but that he did not think he had any general authority from the home office to collect premiums; that...
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