Hartford Fire Ins. Co. v. Haas

• Decision Date: 20 November 1888
• Citation: 9 S.W. 720,87 Ky. 531
• Parties: HARTFORD FIRE INS. CO. v. HAAS et al.
• Court: Kentucky Court of Appeals

9 S.W. 720

87 Ky. 531

HARTFORD FIRE INS. CO. v. HAAS et al.

Court of Appeals of Kentucky.

November 20, 1888

Appeal from circuit court, Daviess county; LUCIUS P. LITTLE, Judge.

M. Haas and her husband instituted an action at law against the Hartford Fire Insurance Company on a policy of insurance issued by defendant to plaintiff. After there had been a trial and verdict for plaintiff, and a new trial had been granted defendant by the trial court, the plaintiffs dismissed their action without prejudice, and this suit in equity was commenced by M. Haas and her children against the Hartford Fire Insurance Company to reform the contract of insurance and to recover thereon. The chancellor, refusing to reform the contract of insurance, dismissed the petition as to Mrs. Haas' children, but rendered judgment for Mrs Haas against the insurance company for $1,364. From this judgment the defendant appealed, and the children have filed a cross-appeal. The opinion below states the facts involved in the controversy.

Haycraft & Slack and E. W. Hines, for appellant.

Owen &amp Ellis, for appellees.

PRYOR J.

Margaret Haas and her children were the owners of a brick building in the town of Owensboro, upon which insurance was obtained by her for the sum of $2,000 in the Hartford Insurance Company. The premium paid was $32, and the insurance was against loss or damage resulting from fire. The fee was in the children of Mrs. Haas, her interest being confined to her dower and a lien for a purchase-money note that had been taken up by her after the death of her husband out of her own means. The policy of insurance is issued in the name of Margaret Haas without reference to her interest or that of her children, and contains a stipulation to the effect that "if the assured is not the absolute and unconditional owner of the property insured, or if said property be a building, and the assured is not the owner of the land in fee-simple on which the building stands, and this fact is not expressed in the written portion of the policy," etc., "then, and in every such case, the policy shall be void." The building was destroyed by fire, and the appellant, the insurance company, contests the right of recovery on two grounds: First. The assured was not the owner in fee of the property insured, and failed to disclose her interest. Second. The house became vacant during the life of the policy, and was unoccupied when destroyed; the policy providing that in such a state of case the liability of the company should terminate. The appellee, Mrs. Haas, ascertaining the character of defense relied on, filed her petition in equity seeking to reform the policy, alleging that the contract of insurance, as made with the agent, was to insure, not only her interest, but that of her children, and, by mistake, the provision for the children was omitted; and seeks to recover such a sum as she may be entitled to under the contract. The averment with reference to the character of the contract, as well as the mistake in its execution, was traversed by the company, and the defenses already alluded to relied on to defeat any recovery. That the appellant supposed she was insuring the interest her children had, as well as her own, is evident; but from the testimony it seems there was nothing said as to the nature and extent of the interest insured, and the chancellor could not well enlarge the liability of the company by inserting a provision in the policy for the benefit of the children, when the only reason assigned for so doing consists in the belief by the mother that she had insured their interest in the property as well as her own.

The question then arises: Is the policy or contract of insurance void, because of the failure of Mrs. Haas to state the real nature of her title? There is no pretense that the assured made any representations, false or otherwise, in regard to the property she was insuring, or her interest in it. She seems to have acted in the best of faith, believing that she had the right to insure the house at its full value, and was entitled to receive from the company its fair cash value in the event it was destroyed by fire during the life of the policy. So we have a case where the assured had an insurable interest; but, having failed to state that she had less than a fee-simple title, it is urged that the entire contract is void. The importance of disclosing the nature of the interest of the assured in the subject-matter insured cannot be overlooked; and such a stipulation in the contract will be enforced, because binding on all the parties, although the assured may have regarded it as non-essential at the time of entering into the contract, or have been ignorant, in the absence of some fraud practiced upon him, that the policy contained such a stipulation. The evidence in this case shows, however, that the assured was an illiterate German woman, unable to write or read the English...