Harwood v. National Union Fire Ins. Company

• Citation: 156 S.W. 475,170 Mo.App. 298
• Parties: W. E. HARWOOD, Respondent, v. NATIONAL UNION FIRE INSURANCE COMPANY, Appellant
• Decision Date: 07 April 1913
• Court: Court of Appeals of Kansas

156 S.W. 475

170 Mo.App. 298

W. E. HARWOOD, Respondent, v. NATIONAL UNION FIRE INSURANCE COMPANY, Appellant

Court of Appeals of Missouri, Kansas City

April 7, 1913

Appeal from Johnson Circuit Court.--Hon. A. A. Whitsett, Judge.

Judgment reversed.

E. H McVey, N. M. Bradley and Clyde Taylor for appellant.

(1) There is no question of waiver of the violation of the concurrent insurance clause in the case. (a) The case was not tried below upon the theory of waiver. (b) Moreover, there was no proof of waiver. Patterson v. Ins. Co., 164 Mo.App. 163; Rogers v. Ins. Co., 155 Mo.App. 276. (2) The court should have given defendant's peremptory instruction on the theory that plaintiff's admitted violation of the concurrent insurance agreement as a matter of law avoided the policy. (a) Concurrent insurance provisions are reasonable and valid. Rogers v. Ins Co., 155 Mo.App. 280; Hutchinson v. Ins. Co., 21 Mo. 97; Aloe v. Ins. Co., 147 Mo. 579; Barnard v. Ins. Co., 27 Mo.App. 334; 19 Cyc. 703. (b) The policy was void whether the admitted breach did or did not materially affect the risk. Hoover v. Ins Co., 93 Mo. 119; Matthews v. Ins. Co., 236 Mo. 326; State v. DeLay, 93 Mo. 99. (3) Even if it were the law of the case that plaintiff's violation of the contract after the same was made must materially affect the risk before it avoided the policy, yet the court should have declared as a matter of law that the admitted breach thereof did materially affect the risk and that the policy was void. Rogers v. Ins. Co., 155 Mo.App. 280; Barnard v. Ins. Co., 27 Mo.App. 35; Ins. Co. v. Manning, 160 F. 385; Dolan v. Ins. Co., 88 Mo.App. 673; Kenefick v. Ins. Soc., 205 Mo. 304; 2 Cooley, Briefs on the Law of Insurance, 1163; Moore v. Ins. Co., 56 Mo. 345; Hutchinson v. Ins. Co., 21 Mo. 97; Aloe v. Ins. Co., 147 Mo. 579; 2 Cooley, Briefs on the Law of Insurance, 1442. (4) The admission of the so-called expert testimony concerning the materiality of the breach of contract was error. Hoover v. Ins. Co., 93 Mo. 119; Matthews v. Ins. Co., 236 Mo. 326; State v. DeLay, 93 Mo. 99; Rogers v. Ins. Co., 155 Mo.App. 280; Barnard v. Ins. Co., 27 App. 35; Ins. Co. v. Manning, 160 F. 385; Dolan v. Ins. Co., 88 Mo.App. 673; Kenefick v. Ins. Co., 205 Mo. 304; 2 Cooley, Briefs on the Law of Insurance, 1163.

J. W. Suddath & Son for respondent.

(1) Defendant answers, states no defense, because it fails to allege that the warranties set up therein were material to the risk and but for which the policy would not have been issued--or if issued would have been cancelled as soon as the company learned of it. Dolan v. Ins. Co., 88 Mo.App. 666; Christian v. Ins. Co., 143 Mo. 460; Summers v. Ins. Co., 90 Mo.App. 690. (2) Sec. 7025, R. S. 1909, makes all warranties in fire insurance policies, which are not material to the risk, insured against, representations only, whether they refer to conditions precedent or subsequent to issue of policy. Burge Bros. v. Ins. Co., 106 Mo.App. 244. (3) Only when the risk is undoubtedly affected by the additional insurance, does it become a question of law and require the court to so instruct. Dolan v. Ins. Co., 88 Mo.App. 666; Kenefick H. Co. v. Ins. Co., 205 Mo. 294; White v. Ins. Co., 93 Mo.App. 282. (4) When the amount of the loss is to be determined or limited by the cash value of the property at the time it is destroyed, then the condition as to additional insurance becomes immaterial, as a matter of law. Burge Bros. v. Ins. Co., 106 Mo.App. 244; Ramsey v. Ins. Co., 71 Mo.App. 380; Dolan v. Ins. Co., 88 Mo.App. 666; Lee v. Ins. Co., 11 Cush. (Mass.) 324. (5) The expert testimony as to materiality was not error, but was proper: (a) The question to them was in proper form. (b) And insurance agents are competent witnesses. Hanna & Co. v. Ins. Co., 109 Mo.App. 152; Kern v. Ins. Co., 40 Mo. 19. (6) The question of whether any fact (for example, the taking of other insurance) is material to the risk, is a question of fact for the jury. Dolan v. Ins. Co., 88 Mo.App. 666; Hanna v. Ins. Co., 109 Mo.App. 152; Kern v. Ins. Co., 40 Mo. 19; Boggs & Leath v. Ins. Co., 30 Mo. 63; Schroeder v. Ins. Co., 46 Mo. 174; Schultz v. Ins. Co., 57 Mo. 331. (7) The test of "materiality" to be given to a jury, is, would the fact considered, cause the risk to be rejected, or call for a higher premium (just as in instructions 7 and 8)? If it would it is material, if not it is immaterial. Boggs & Leath v. Ins. Co., 30 Mo. 63; Moore v. Ins. Co., 56 Mo. 343; 2 Cooley's Briefs on Law of Ins., 1163.

OPINION

JOHNSON, J.

--This is an action on a policy of fire insurance. Plaintiff recovered judgment in the circuit court and defendant appealed. By the terms of the policy defendant insured a livery stock owned by plaintiff in Warrensburg in the sum of $ 1000. The policy was issued November 15, 1910, to cover a period of one year from that date, and on its face recited "$ 1500 other insurance concurrent herewith permitted." It was agreed that "this entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void if the insured has or shall hereafter make or procure any other contract of insurance whether valid or not, on the property covered in whole or in part by this policy." Other clauses provided: "This company shall not be liable beyond the actual cash value of the property at the time any loss or damage occurs, and the loss or damage shall be ascertained, or estimated according to such actual cash value with proper deduction for depreciation however caused . . . this company shall not be liable under this policy for a greater proportion of any loss on the described property . . . than the amount hereby insured shall bear to the whole insurance, whether valid or not, or by solvent or insolvent insurers, covering such property."

The evidence of the plaintiff shows that the value of the property was $ 4316.80 and that the loss caused by the fire which occurred September 21, 1911, was $ 3797.80. Defendant refused to pay the loss, the refusal being based partly on the ground of a breach by plaintiff of the stipulation relating to concurrent insurance and this suit followed.

The answer pleads the stipulation and plaintiff's breach thereof as a complete defense to the action but does not allege that the stipulation constituted a warranty material to the risk and but for which the policy would not have been issued. The reply admits the charge of over-insurance but pleads a waiver and denies "that said conditions and agreements were or are material to the risk insured against . . . or that the failure to comply therewith, if plaintiff had so failed, is or would be material to the risk insured against." The cause was tried on the theory that the questions of whether or not the conditions relating to other insurance were in the nature of a warranty and were material to the risk were properly raised by the pleadings. The court, adopting the view of counsel for plaintiff that the condition in question was controlled by the provisions of sections 7024 and 7025, Revised Statutes 1909, permitted plaintiff, over the objection of defendant, to introduce expert evidence to the effect that the over-insurance was not material to the risk and in the instructions to the jury given at the request of plaintiff, submitted the question of the materiality of the over-insurance as an issue of fact. Defendant offered no evidence but stood in the trial court and stands here on its demurrer offered at the close of plaintiff's evidence.

Point is made by plaintiff that the omission of the answer to allege affirmatively that the alleged warranty was material to the risk is fatal to the defense under consideration. The rule we applied in Dolan v. Insurance Co., 88 Mo.App. 666, disposes of the point adversely to the contention of plaintiff: "Defendant's answer fails to allege that the warranties set up therein were material to the risk and but for which the policy would not have been issued. But no objection was made on that account and the case was tried throughout on the theory that the issues were made up. Plaintiff himself, in his instructions, affirmatively submits that question to the jury. It is now too late to insist on such point."

It appears from the evidence that when the policy in suit was issued plaintiff had other insurance of $ 1000. A week later he procured another policy of $ 1000, bringing the concurrent insurance to $ 2000, which was $ 500 in excess of that allowed by the stipulation in question. Plaintiff testified that he informed defendant's agent at the time he agreed to take the policy that he expected to carry other insurance in the amount of $ 2000 but afterward he accepted the policy restricting such insurance to $ 1500 without protest and he did not advise defendant of the procurement of the later policy. The evidence of plaintiff, therefore, fails to support his claim of waiver.

We held in the recent cases of Rogers v. Insurance Co., 155 Mo.App. 276, 136 S.W. 743 and Patterson v. Insurance Co., 164 Mo.App. 157, 148 S.W. 448, that an agreement of the agent of the insurer that a future breach by the insured of one of the stipulations of the policy would be condoned and not allowed to terminate the policy would not constitute a waiver of such future breach. There is no charge of fraud or deceit on the part of the agent and to give effect to such antecedent oral agreement would violate the elementary rule that merges such agreements into the written contract. Since it does not appear that defendant had notice of the procurement of the over-insurance we do not perceive any good reason for the suggestion that it waived any right reserved in the policy by retaining the premium paid by plaintiff. Certainly a breach of a warranty or condition...