Home Fire Ins. Co. v. Kennedy

• Decision Date: 18 February 1896
• Citation: 66 N.W. 278,47 Neb. 138
• Parties: HOME FIRE INS. CO. v. KENNEDY.
• Court: Nebraska Supreme Court

47 Neb. 138

66 N.W. 278

HOME FIRE INS. CO.

v.KENNEDY.

Supreme Court of Nebraska.

Feb. 18, 1896.

Syllabus by the Court.

1. An insurance company, which, after a loss of the property covered by its policy, with a knowledge of acts amounting to a breach of warranty by the insured, fails to declare such policy forfeited, but, on the contrary, continues to recognize its liability thereon by demanding repeated proofs of loss, and by insisting upon arbitration under a stipulation which applies to the measure of damages only, will be held to have waived all defenses based upon such breach of warranty and resulting forfeiture of the policy.

2. So held notwithstanding the secretary of the defendant company, in returning the proof of loss for correction, added, “This company neither admits nor denies its liability nor waives any of its rights under said policy.”

3. A stipulation for arbitration, which does not provide for submitting the matters in dispute to a particular person or tribunal, but to one or more persons, to be mutually chosen, is revocable by either party, and will not oust the jurisdiction of the courts having cognizance of the subject of the controversy.

4. An insurance company, by denying its liability on the ground of a forfeiture of the policy by reason of a breach of warranty by the insured, waives whatever right it may have had to insist upon arbitration as a means of determining the amount of the plaintiff's damage.

Error to district court, Douglas county; Doane, Judge.

Action by Catherine Kennedy against the Home Fire Insurance Company. There was a verdict for plaintiff, and defendant brings error. Affirmed.J. Fawcett, for plaintiff in error.

Martin Langdon and I. J. Dunn, for defendant in error.

POST, C. J.

This was an action by the defendant in error, Catherine Kennedy, against the plaintiff in error, the Home Fire Insurance Company of Omaha, upon a policy of insurance. The defendant company, for answer, admitted the insuring of the plaintiff's property, to wit, a two-story frame and brick building, and that said building was destroyed by fire within the period covered by said policy. It, however, alleged that said policy was not in force at the time of the loss, for reasons which will be hereafter noticed. A trial was had in the district court for Douglas county, resulting in a verdict and judgment for the plaintiff below, which has been removed into this court for review by the defendant company.

It is first contended that the risk was increased in violation of the policy (1) from the fact that the building described therein was at the time of the loss used and occupied as a tenement house, whereas it was insured as a private dwelling only; (2) by the use and keeping therein of gasoline in excess of the amount permitted by the policy. In support of the first of the alleged violations we are referred to the following questions and answers shown by the application for the policy: “Q. Is the house occupied for private dwelling only? A. Yes. Q. By owner? A. Yes.” And also to the following conditions of the policy: “Or if the risk be increased in any manner without consent indorsed thereon, * * * then this policy shall be null and void.” It is not claimed that the representations of the insured respecting the occupancy of the premises at the date of the policy were false as to any essential facts. The only evidence we discover bearing upon that question is the following testimony of the defendant in error, Mrs. Kennedy: “Q. Who was occupying the house at the time the policy was issued, March 30, 1889? A. I could not say whether there was any one but myself or not. Q. The house was not complete at the time the policy was issued? A. No, sir.” It is, however, contended that the foregoing condition of the policy, in connection with the application, is to be construed as a continuing warranty of affirmative agreement; that the validity of the said policy should depend upon the literal fulfillment of the contract by the insured. Applying the rule thus asserted to the facts disclosed by this record, counsel argue that the policy is void and of no effect, for the reason that there were at the time of the loss, in addition to the family of the insured, consisting of herself and son, three families occupying rooms in said house, although the record is silent respecting the number of such occupants or the character of their tenure. It is deemed unnecessary to review the many authorities cited in support of that contention, since it is, we think, conclusively shown that the defendant company has, by the action subsequent to the loss, waived whatever right it may have had to declare the policy void on account of the facts stated, or by reason of the violation of the condition regarding the keeping of gasoline in the building insured. The company, according to the testimony of its own witnesses, was fully advised of the facts constituting the alleged violation of the contract by the insured five days after the loss, to wit, on March 16, 1891. Fourteen days later, on March 30th, the plaintiff below served upon the defendant what appears to be formal proof of loss, sworn to before a notary public, and attested by two disinterested neighbors in the presence of a justice of the peace. On the same day Mr. Barber, secretary of the defendant company, acknowledged receipt thereof, as follows: “Omaha, Neb., March 30, 1891. Mrs. Catherine Kennedy, Holder of Policy No. 30,715, issued by the Home Fire Insurance Company of Omaha, Nebraska: Papers purporting to be proofs of an alleged loss under said policy have been received, but same are irregular, defective, and deficient, in that they do not comply with the terms of the said policy, in that it requires that proofs duly executed and sworn to by the assured under the said policy be made and furnished the said company. You have been required, and are hereby required, to render, under oath, a particular account of said alleged loss, setting forth the date and circumstances of the same, together with title, occupancy, and other insurance, if any, and itemized estimate of the value of the property destroyed; said proofs to be signed and executed in accordance with the terms of said policy. No estimate of the...