Home Fire Insurance Co. v. Wilson

• Citation: 159 S.W. 1113,109 Ark. 324
• Parties: HOME FIRE INSURANCE COMPANY v. WILSON
• Decision Date: 07 July 1913
• Court: Supreme Court of Arkansas

159 S.W. 1113

109 Ark. 324

HOME FIRE INSURANCE COMPANY v. WILSON

Supreme Court of Arkansas

July 7, 1913

Appeal from Columbia Circuit Court; George W. Hays, Judge; reversed.

Judgment reversed and cause remanded.

T. D Wynne and H. T. Harrison, for appellant.

1. The rights of the appellees were forfeited by reason of the building being unoccupied and vacant, and remaining so for from three to five months prior to the time the fire occurred. The forfeiture became complete when the unoccupied condition of the building extended beyond a period of ten days, as provided for by the terms of the contract itself. 2 Clements, Fire Insurance, 367; 5 So. 768; 42 N.W. 630.

2. There is no merit in the contention that the forfeiture was waived by any act of the agent, Rhea. It is clear both from the language and express terms of the contract and from elementary law that he, a mere local agent, had no power or authority to waive the provisions of the policy against vacancy. 65 Kan. 373; 69 P. 345; 69 S.W. 42; 27 S.W. 122; 19 Cyc. 782, and foot note; 22 P. 1010; 7 N.Y.S. 589.

Appellees were bound by limitations upon the agent's authority as stipulated in the policy. 2 Clements on Fire Ins. 487, and cases cited in foot notes; 133 N.Y. 356; 54 Ark. 75; 32 S.W 582.

There was neither an express nor implied waiver of the provisions against vacancy. It can not be said in this case that the local agent or any one representing the insurance company did any affirmative act which might have caused the insured to believe that the forfeiture would not be insisted upon. 87 Ark. 327; 86 Ala. 424. And it was not necessary to return or offer to return the unearned premium in order to plead the forfeiture as a defense. 87 Ark. 327.

C. W McKay, for appellee.

1. Appellant's local agent at McNeil had authority to waive its right to insist upon a forfeiture of the policy on account of the vacancy clause in it. 62 Ark. 348; 63 Ark. 187; 71 Ark. 242; 88 Ark. 506.

2. Appellant's agent waived its right to insist upon a forfeiture on account of the vacancy clause in the policy. 82 Ark. 160; 123 Ala. 667; 75 Ark. 99; 88 Ark. 506; 87 Ark. 326.

OPINION

SMITH, J.

This suit was brought by appellees against appellant to recover $ 1,000 for the total destruction by fire of a dwelling house in the town of McNeil, Ark., on the night of the 28th of January, 1912, which the appellant, by its contract, agreed to pay appellees upon the destruction by fire of this building.

The appellant denied liability under this contract for the reason that the house was vacant at the time it was destroyed by fire, and had remained so for more than ten days prior to its destruction, in violation of the terms of said contract of insurance. The appellees admit that the house was vacant at the time it was destroyed by fire, and had been vacant for more than ten days prior to its destruction, but they say appellant has waived its right to insist upon a forfeiture on account of the violation of this part of the contract of insurance.

At the conclusion of the introduction of the evidence in the case, each party requested the court to give a peremptory instruction in his favor, and neither asked any instruction except that the court direct a verdict. In the case of St. Louis S.W. Ry. Co. v. Mulkey, 100 Ark. 71, 139 S.W. 643, it was said, to quote the syllabus of that case: "Where each of the parties to an action request the court to direct a verdict in his favor, and request no other instruction, they, in effect, agreed that the question at issue should be decided by the court, and the court's finding had the same effect as the decision of a jury would have had." The court directed the jury to return a verdict for appellees for the full amount of the policy, together with the statutory penalty of 12 per cent, and also fixed the attorney's fee at the sum of $ 150. The court's action in assessing the penalty and fixing the attorney's fee is not complained of except appellant says that neither should have been done, because a verdict for appellant should have been directed by the court.

In testing the correctness of the court's action in directing a verdict for the appellees, under the authority of the Mulkey case, we give to the evidence its highest probative value in support of appellees' theory of the case. However, there are no serious conflicts in the evidence, and the facts may be stated as follows: The policy sued on was originally issued to one Ed M. Rhodes, who was then the owner of the property, but who sold and conveyed it to appellees, Wilson and Grayson. The policy was transferred to Wilson and Grayson, written consent therefor having been given by a Mr. Rhea, who was the company's agent, and endorsed upon the policy. Appellees were residents of Magnolia, while Rhea resided at McNeil, and the evidence is, that Rhea promised appellees that he would look after the insurance and keep this policy in force. They had spoken of taking out this insurance at Magnolia, where they could look after it, but Rhea agreed to keep this policy in force, and for that reason, they turned this piece of property over to him, and he agreed to look after it and to keep the insurance in force. Mr. Grayson testified as follows: "We arranged with Mr. Rhea to keep this place insured. We had the place right there, and were afraid we might overlook it, and made arrangements with him, and he said he would. We told him whatever was necessary to keep it insured, notify us and we would settle the bill." and upon his cross examination, he made the following answers:

Q. You stated in your direct examination that you had some kind of an agreement with Mr. Rhea to keep the property insured?

A. Yes, sir.

Q. What was that agreement?

A. Well, we were in there, me and Mr. Wilson, and told Mr. Rhea we had that piece of property over there, and wanted him to look after the insurance and keep that policy in force, and whatever the insurance--whatever the cost was--not to let it go out, but to notify us and we would pay it."

And he further said:

"I spoke to Mr. Rhea to do whatever was necessary to keep it in force, and we would pay the bill, and he agreed to keep this one in force, and we turned that piece of property over to him."

The testimony of Mr. Wilson was substantially to the same effect. Rhea testified on behalf of the appellees, and was asked:

Q. State to the jury whether or not you have ever been authorized to keep up the insurance on this place?

A. Well, I do not remember about the conversation, but, of course, I was supposed to do my part of it.

Q. What do you understand your part to be?

A. To do what they said to do.

The house was bought by appellees, not for their own use or occupancy, but as an investment, of which fact Rhea was apprised at the time the policy was assigned to appellees. The house was occupied at that time, but later became vacant, and had been unoccupied for from three to five months before the fire. Rhea was aware of the fact that the property was unoccupied, and had been requested by appellees to procure a tenant for the property.

The policy contained the following clause: "This entire policy, unless otherwise provided by agreement endorsed hereon, or added hereto, shall be void if the building herein described, whether intended for occupancy by owner or tenant be or become vacant or unoccupied, and so remain for ten days," but appellees insist that the acts, statements, and conduct of appellant's agent estop it from insisting upon a forfeiture on account of the violation of the vacancy clause of the insurance contract....