Higgins v. Insurance Co. of North America

• Citation: 66 A.L.R.3d 871,469 P.2d 766,256 Or. 151
• Parties: , 66 A.L.R.3d 871 Linn D. HIGGINS and Betty J. Higgins, husband and wife, Respondents, v. INSURANCE COMPANY OF NORTH AMERICA, Appellant.
• Decision Date: 21 July 1970
• Court: Supreme Court of Oregon

Page 766

469 P.2d 766

256 Or. 151, 66 A.L.R.3d 871

Linn D. HIGGINS and Betty J. Higgins, husband and wife, Respondents, v. INSURANCE COMPANY OF NORTH AMERICA, Appellant.

Supreme Court of Oregon, In Banc.

Argued and Submitted Sept. 11, 1969.

Decided May 28, 1970.

Rehearing Denied July 21, 1970.

Thomas M. Triplett, Portland, argued the cause for appellant. With him on the briefs were Mautz, Souther, Spaulding, Kinsey & Williamson, Portland,

William E. Flinn, Eugene, argued the cause for respondents. On the brief were Jaqua, Wheatley & Gardner, Eugene.

Before PERRY,* C.J., and McALLISTER, SLOAN, O'CONNELL, GOODWIN,** DENECKE, and HOLMAN, JJ.

McALLISTER, Justice.

This is an action on a fire insurance policy in which the trial court found for plaintiffs and defendant Insurance Company of North America appeals. The principal questions on appeal are whether plaintiffs had an insurable interest in the insured premises, the effect on plaintiffs' claim of other insurance on the same property, whether the filing of a proof of loss was waived, and the amount plaintiffs were entitled to recover under the terms of the policy.

There is little dispute about the facts. John Vickroy owned a house and lot at 943 Lorane Highway in Eugene which he wanted to sell. On April 21, 1966, after some negotiation between the parties, an earnest money receipt was executed by plaintiff Linn D. Higgins and Vickroy by which plaintiffs agreed to buy the property for $8,000 and to pay the purchase price at the rate of $85 month commencing May 15, 1966. The agreement also required four additional payments of $500 each, payable quarterly commencing August 15, 1966.

Plaintiffs did not purchase the property for a home, but intended to renovate it for resale. Within a day or two after the earnest money agreement was signed the plaintiffs took possession of the property and began renovation. Higgins testified that after he took possession he worked evenings and Saturdays on the house doing general cleanup work, painting the exterior, stripping the kitchen and bath and preparing to install new cabinets in the kitchen.

On May 3, 1966, defendant's policy involved in this action was issued to plaintiffs by the Smith and Crakes Agency of Eugene. The policy covered the Lorane Highway property against loss by fire up to $17,000, which Higgins told the agent would be the value of the premises when the house was renovated. The first annual premium was paid. The policy made no mention of Vickroy's interest in the property.

Vickroy had a $10,000 policy of fire insurance covering the premises, also issued by the Smith and Crakes Agency, but in the South Carolina Insurance Company.

On May 15, 1966, the plaintiffs paid Vickroy the $85 payment on the purchase price due on that date. No other payments on the purchase price were made.

On June 4 the house was badly damaged by fire. Smith and Crakes hired an adjuster to adjust the loss on behalf of both the South Carolina Insurance Company and defendant Insurance Company of North America. There was some delay in adjustment while the authorities were investigating the fire, but ultimately the South Carolina Insurance Company paid Vickroy $6,756.55 in settlement under its policy. The defendant did not pay on its policy and plaintiffs brought this action. The trial court found plaintiffs were entitled to recover the policy limit of $17,000, plus $5,000 attorneys' fees, and entered judgment against defendant for $22,000.

The defendant first asserts that the court erred in finding that plaintiffs had an insurable interest in the premises. Since this is an action at law we are bound by the findings of the trial court on issues of fact. We inquire only whether there is evidence to support the findings.

The law is clear that the insured must have an insurable interest in the property, both when the contract of insurance is made and when the loss occurs. Armbrust v. Travelers Ins. Co., 232 Or. 617, 376 P.2d 669 (1962); Yoshida v. Security Ins. Co., 145 Or. 325, 336, 337, 26 P.2d 1082 (1933); Hardwick v. State Insurance Co., 20 Or. 547, 550, 26 P. 840 (1891); Chrisman v. State Ins. Co., 16 Or. 283, 18 P. 466 (1888).

Defendant contends that the plaintiffs had no insurable interest because the earnest money receipt was unenforceable. Defendant attacks the earnest money receipt on three grounds: (1) inadequate description; (2) uncertainty as to the amount of the purchase price; and (3) uncertainty as to the parties. Defendant expressly disclaims any reliance on the Statute of Frauds. Its claim is that the terms of the agreement are so indefinite that there is nothing a court could enforce--in effect, that there was no contract.

The earnest mony receipt is a printed form, which was completed in longhand. It states that the subject property is located in Eugene, Lane County, Oregon. In the space provided for a description of the property is written 'description to be furnished. North 70 of description in Title Policy.' According to evidence at the trial, the title policy referred to had been prepared in connection with an earlier sale of the property, and was in the files of the escrow company at whose offices the agreement was prepared and executed, and where Higgins was to make his payments. The title policy is not in evidence.

The fact that the property was not properly described in the writing does not necessarily mean that as between the parties the contract was unenforceable. In deciding disputes between the parties to a land sale contract, courts, including this one, have often held that evidence showing that both parties clearly understood what land was intended, or that the seller had put the purchaser into possession of a particular tract, would cure uncertainties in the contract description of the land. In Guillaume v. K. S. D. Land Co., 48 Or. 400, 86 P. 883, 88 P. 586 (1907), the contract described the property as a tract designated by a number on an unrecorded map on file in the office of the seller. The county, township, and range where it was located were admitted in the pleadings. This court held the description sufficient to allow enforcement of the contract, relying in part on the fact that the purchaser had gone into possession. The opinion stated the applicable rule as follows:

'* * * The rule is quite general that if the description clause of real property as stated in a written instrument is vague, the construction of the language used hat has been placed upon it by the parties may be shown by parol evidence as tending to identify the premises intended * * *. Thus, when possession of real property is taken pursuant to an agreement of the vendor the occupation of the premises by the vendee may render certain what otherwise would have been a vague description of the land intended by the parties * * *.' 48 Or. at 406, 86 P. at 885.

In Richards v. Snider et al., 11 Or. 197, 3 P. 177 (1883), a vendee sought to compel specific performance of a written agreement for the sale of 'lot 8, sec. 19, 4 N., 35 E.' The agreement provided that 'said Richards to be entiled to immediate possession of said lot 8.' The complaint alleged that the language of the description referred to a certain township and range in Umatilla County, and that Richards had received possession from Snider under the agreement. The trial court sustained a demurrer to the complaint, but this court reversed. It was held that the written agreement adequately disclosed the parties' intention to contract with reference to a particular tract and no other.

'* * * It is clearly a case admitting of the identification of the subject of the contract by proof of extrinsic facts * * *. And the facts admissible and effectual for this purpose, which are alleged in the complaint, and admitted by the demurrer, seem ample. The possession alone, taken under the circumstances alleged, and in view of the stipulation for possession in the written agreement itself, should be held a sufficient identification. * * *' 11 Or. at 199--200, 3 P. at 179.

See, also, Skinner v. Furnas, 82 Or. 414, 425, 161 P. 962 (1916); Crawford v. Carter, 72 S.D. 514, 37 N.W.2d 241 (1949); Suchan v. Swope, 357 Pa. 16, 53 A.2d 116 (1947); Thurman v. Trim, 199 Kan. 679, 433 P.2d 367 (1967).

The uncontroverted evidence in this case shows that Vickroy owned a piece of property on the Lorane Highway with a total frontage of 140 feet, that there was a house on the north 70 feet, and that this portion of the property was designated as 943 Lorane Highway. The house had been the Vickroy residence. Higgins offered to buy the north 70 feet, on which the house was located, and his offer was accepted. The earnest money receipt provided that possession was to be delivered to the purchaser on or about April 25, 1966, and Higgins testified that he went into possession and began renovation of the house within a day or two after April 21. He made the first monthly payment, the only one which had become due prior to the fire.

We hold that the property involved in this case was sufficiently identified by the evidence to support the finding that the contract was enforceable.

The contention that the sale price was indefinite is not well taken. The earnest money receipt states that the property is sold to the purchaser 'for the sum of eight thousand 00/100 ($800.00) Dollars'. The $8,000 was

'payable in installments of not less than $85.00, including 7% Interest, monthly, beginning May 15 1966 and the 15th day of each month thereafter until May 15, 1968 at which time the entire unpaid balance, including interest, shall be due and payable; ALSO: beginning not later than Aug. 15, 1966 and each calendar quarter thereafter purchasers shall pay an additional $500.00 on principal until $2000.00 additional has been paid.'

Below Vickroy's signature and immediately above that of Higgins, there is the following:

'I hereby agree to purchase the above property and to pay the price of eight thousand...