Home Mut. Fire Ins. Co. v. Pierce

• Decision Date: 16 May 1966
• Docket Number: No. 5--3880,5--3880
• Citation: 240 Ark. 865,402 S.W.2d 672
• Parties: HOME MUTUAL FIRE INS. CO., Appellant, v. Earl PIERCE, Appellee.
• Court: Arkansas Supreme Court

Page 672

402 S.W.2d 672

240 Ark. 865

HOME MUTUAL FIRE INS. CO., Appellant, v. Earl PIERCE, Appellee.

No. 5--3880.

Supreme Court of Arkansas.

May 16, 1966.

Peter G. Estes, Fayetteville, for appellant.

Little & Enfield, Bentonville, for appellee.

COBB, Justice.

On January 12, 1965, appellee's chicken brooder house and equipment and supplies contained therein were damaged by fire in the amount of $15,550. At the time of the loss, appellee was covered by appellant's policy of insurance scheduling coverage on the brooder house at $10,000 and on equipment and supplies therein at $6,000. A feed tank valued at $450 was salvaged from the fire and the loss resulted in a claim against appellant in the sum of $15,550. Appellant took the position that its liability was limited to two thirds of the loss. All of the facts relied upon by the parties were stipulated in the trial court and jury waived. The court found for appellee in the full amount of the loss, and appellant is here on appeal.

The Pertinent Facts as Stipulated

Appellee is a large operator of chicken brooder houses, using four farms in the general vicinity of Gravette as sites for same. Much expensive equipment is used. Prior to December 23, 1964, appellant had issued to appellee a separate policy of insurance on dwellings and named structures on each of said farms. On December 23, 1964, a new policy was written consolidating the coverage and on December 31, 1964, an endorsement was placed on the policy increasing some of the coverage. The provisions of the policy at issue are quoted in full in our discussion below of the law applicable to the particular facts of this case.

The farm site where the fire loss occurred had a dwelling thereon. When appellant inspected the property to write the original insurance a tenant was residing in the dwelling, but said tenant was engaged solely in hog raising and had and exercised no authority or responsibility as to appellee's brooder house. Special personnel operated the brooder house, visiting same three or more times per day.

When appellant wrote and delivered the new policy covering the four farms, it made no additional physical inspection of same. Prior to the issuance of said new policy the tenant moved from the dwelling. It is stipulated, without providing any details, that said dwelling had not been occupied for more than 30 days prior to the fire.

Appellant urges two points for reversal and we discuss same in the order presented.

Point 1--Appellant contends that when the insurance is upon a farm dwelling and subordinate buildings, the occupancy of the dwelling determines the character of the occupancy of the barn and other outbuildings used in connection with it.

The principle stated under Point 1 is one that has been approved and widely applied in many jurisdictions including our own. It was exhaustively examined and approved in one of our cases upon which appellant primarily relies. Farmers Fire Ins. Co. v. Farris, 224 Ark. 736, 276 S.W.2d 44, 51 A.L.R.2d 1360 (1955). In Farris we referred to American Ins. Co. v. Hays, 174 Ark. 772, 296 S.W. 724 (1927), where we quoted with approval a Wisconsin decision, Hotchkiss v. Insurance Co., 76 Wis. 269, 44 N.W. 1106 (1890), as follows:

'Under certain circumstances, premises may be vacant or unoccupied when, under other circumstances, premises in like situation may not be so, within the meaning of that term in insurance policies.'

Appellant has called our attention to several cases from other jurisdictions. Continental Ins. Co. v. Dunning, 249 Ky. 234, 60 S.W.2d 577 (1933); Republic County Mut. Fire Ins. Co. v. Johnson, 69 Kan. 146, 76 P. 419 (1904); Agricultural Ins. Co. v. Hamilton, 82 Md. 88, 33 A. 429, 30 L.R.A. 633 (1895); Ashworth v. Builders Mut. Fire Ins. Co., 112 Mass. 422, 17 Am.Rep. 117 (1873).

After examining said case authorities we have reached the conclusion that the brooder house and equipment therein destroyed in this fire was neither subordinate to or used in connection with the farm dwelling, the facts in the case at bar being clearly distinguishable from the facts in the cases relied upon by appellant. Our principal reasons for this conclusion follow:

1. Webster's New International Dictionary, 2d ed., defines subordinate: 'Inferior in order, nature, importance, or the like--dependent.'

2. In all cases cited by appellant the dwelling was of much greater value than the outbuildings--the outbuildings consisting of barns, corn cribs, smoke houses, etc. Indeed, appellant cites no case involving a brooder house operation.

3. In this case the brooder house and equipment therein was insured for $16,000, same being more than five times the amount of insurance on the dwelling.

4. The brooder house was operated by personnel entirely separate and apart from other operations on the farm.

5. When appellant inspected the premises prior to writing insurance, it learned that the tenant in the farm dwelling was engaged solely in hog raising and had and exercised no authority or responsibility whatever as to the care and operation of the brooder house.

6. Appellant was at all times here under review on notice that the tenant of the dwelling, whether occupying same or not, had no connection with the brooder house and its operation.

7. The brooder house operation was the most important enterprise on this farm. It had no dependence upon the dwelling and the occupant thereof, if occupied.

8. Under the particular circumstances of this case, stipulated by the parties, the brooder house simply was not used in connection with the dwelling.

It is clear to us that appellant's Point 1, while sound in principle, is inapplicable to the stipulated facts of the case. We therefore find no merit in appellant's contentions under said point.

Point 2--Appellant next contends that the farm dwelling had not been occupied on the...