Howrey v. Star Insurance Company of America

Citation46 Wyo. 409,28 P.2d 477
Decision Date09 January 1934
Docket Number1814
PartiesHOWREY, ET AL v. STAR INSURANCE COMPANY OF AMERICA
CourtUnited States State Supreme Court of Wyoming

APPEAL from the District Court of Converse County; CYRUS O. BROWN Judge.

Action by Cecil T. Howrey and another, as plaintiffs against Star Insurance Company of America, a Corporation, as defendant, to recover balance claimed for loss under a fire insurance policy. From a judgment for plaintiffs, defendant appeals.

Affirmed.

The cause was submitted for the appellant on the brief of Mr John D. Dawson and Mr. L. C. Daniels of Douglas.

The judgment rendered in favor of plaintiffs should be reversed for the following reasons: (a) There was a chattel mortgage on the truck at the time it was destroyed by fire, made by plaintiffs as mortgagors to Clyde Francisco as mortgagee, in the sum of $ 1,600.00, filed of record on April 15, 1929, and assigned on April 17, 1929, to one R. C. Maurer, which assignment was of record. The existence of this mortgage was undisclosed to appellant and prevented the insurance coverage from taking effect and left the policy void. (b) No proof of loss was ever made by the plaintiffs as required by the policy. (c) No notice of loss was ever made or given respondent sought to establish a waiver of the above conditions on the ground that appellant paid the International Harvester Company $ 524.00 on September 5, 1930, thereby waiving all requirements of notice of proof of loss and that plaintiffs had reported the loss to the International Harvester Company, which was investigated by an adjuster of the Insurance Company. There is no dispute as to the facts. The question is one of law. The following cases are in point. Insurance Company v. Itule (Ariz.) 218 P. 992; Michigan Insurance Company v. Van Buskirk, 155 N.E. 186; Illinois Ass'n v. Byalassee (Ark.) 275 S.W. 519; 14 R. C. L. 1325; 26 C. J. 184. Swinney v. Fire Ins. Company (Mo.) 8 S.W.2d 1090; Wright v. Insurance Company (Mo.) 287 S.W. 488. As to agency and absence of proof, see: Hatch Bros. v. Black, 25 Wyo. 109; Studebaker Corp. v. Hanson, 24 Wyo. 222. Insured is held to knowledge of his contract with the insurance company, and is bound by the terms thereof. 32 C. J. 1291, 1293. Where the contract stipulates it shall become void upon breach of a condition when such condition is broken, it cannot be revived without a new contract upon a valid consideration. 32 C. J. 1316. The statement as to prior knowledge is a warranty and not a representation. 23 C. J. 1275. Irrespective of the tendency of the courts to construe waivers against insurers, there should be a limit somewhere. The contract was binding upon both parties. There was no proof of loss but the court is asked to excuse it by waiver. There was no notice of loss. There was an undisclosed encumbrance on the property at the time the policy was written, which invalidates the policy. The insurance did not take effect in the face of a prior outstanding mortgage against the property. There was no coverage when the loss incurred, hence nothing to be waived and nothing for the defendant to gain by reason of a waiver.

The cause was submitted for the respondents on the brief of Joseph Garst of Douglas.

Notice of loss under an insurance policy is to acquaint the insurer of the occurrence. 26 C. J. 375. And any notice is sufficient which brings the matter home to the insurer and induces action by it. 14 R. C. L. 1335. Formal written notice of loss may be waived by the insurer. Indemnity Co. v. Bollas, 135 So. 174; Lee v. Casualty Co. 96 A. 952. The following cases hold that formal notice of loss may be waived. LeBlanc v. Standard Ins. Co., 95 A. 284; State Ins. Ass'n v. Lind, 172 N.E. 361; Vanderlilt v. Ins. Co. 176 N.W. 574; Lee v. Casualty Co. 96 A. 952; Boston Store v. Ins. Co., 227 Ill.App. 192; Zinc Co. v. Company 85 N.E. 219. The question of waiver is one for the jury, or, as in this case, for the court. State Ins. Co. v. Lind, supra; Marcus v. Ins. Co., 115 A. 373; Columbia Cas. Co. v. Ingram, 140 A. 601; Walker v. Company, 154 S.E. 221; U. S. F. & G. v. Company, 190 S.W. 648; Hunt v. Fidelity Company, 93 S.E. 900. The finding of waiver by the trial court should not be disturbed. Christensen v. McCann, 41 Wyo. 101; Kamp v. Kamp, 36 Wyo. 310. The International Harvester Company, mortgagee, was the agent of respondents in making the proof of loss, which was accepted and a forfeiture of the insurance was waived by the insurer against mortgagee and mortgagors alike. Dean v. Engelbrecht, 270 P. 437, and payment to mortgagee was a waiver of undisclosed encumbrances, Firemans Ins. Co. v. Hayes, 251 S.W. 360, and of all known defenses. American Central Life Ins. Co. v. Bott, 130 N.E. 432; Meader v. Farmers Life Ins. Co., 1 P.2d 138. The loss payable clause was complied with. Walker v. Insurance Co., 52 A. L. R. 270; Royal Ins. Co. v. Lumber Co. 24 Wyo. 59. The form was what is known as the "open" form. Walker v. Ins. Co., supra. Waiver is a relinquishment of a known right. U. S. F. & G. v. Miller, 76 A. L. R. 12; Coolidge v. Ins. Co. 300 P. 885. A waiver once made is irrevocable. U. S. F. G. v. Miller, supra. Either mortgagor or mortgagee may furnish proof of loss. 26 C. J. 369. Dean v. Engelbrecht, supra; Boise Ass'n v. Ins. Co., 256 P. 523. Receipt of proofs after time is a waiver of condition. Commercial Co. v. Hocking, 115 P. 407; Firemans Ins. Co. v. Hayes, supra. Webber v. Lloyds, 271 S.W. 118; Bailey v. Sovereign Camp W. O. W., 47 A. L. R. 876; Kerr v. Ins. Co., 254 P. 105; Skibbie v. Ins. Co. 285 P. 581. Very slight evidence will suffice to support a finding that a waiver of the right of forfeiture has occurred. 1 Joyce on Ins. 524; 111 Cooley on Ins. 2259; Ins. Co. v. French, 30 Ohio St. 240; Lyon v. Ins. Co., 20 N.W. 829; Martin v. Ins. Co., 40 A. L. R. 411; Royal Ins. Co. v. Drury, 45 A. L. R. 582; Note 7 L R. A. 82, 83; Trust Co. v. Globe Ins. Co. 229 F. 326; State Ins. Co. v. Green, 166 P. 105; Midland Motor Co. v. Ins. Co., 234 P. 482. Respondents did not purposely fail to disclose the existing encumbrance. The policy was written in Cheyenne, and respondents never saw the policy until after the loss occurred. 26 C. J. 318. A fire policy cannot be defeated merely by erroneous statements, without intent to deceive. Morgan v. Ins. Co. 273 P. 527; Devenny v. Co., 214 P. 833; Montana Co. v. Federal Company, 278 P. 116; Com. Co. v. Company, 116 P. 154. False reports must be willfully made. Mutual Life Ins. Co. v. Chandler, 252 P. 559; Dyre v. Ins. Co. 232 P. 346; Houston v. N.Y. Life Company, 292 P. 445; Mazecha v. Company, 195 N.W. 333. Part payment is a waiver of all defenses. 32 C. J. 1355. Declarations of an agent are admissible to prove that the agent held himself out as the agent of his principal and that a third person dealt with him as such in good faith. Parker v. Bond, 25 So. 898; Novice v. Chapman, 49 N.E. 631. Acts of the agent continued over a period of time and ratified by the principal may be proved to establish agency. White v. German Ins. Co., 103 F. 260; Cane Bros. v. Wallace, 26 P. 445; Cement Company v. Bank, 255 P. 881; Gas Company v. Tracas, 155 N.E. 179. There was substantial evidence to support the judgment below. Christensen v. McCann, 41 Wyo. 101; Kamp v. Kamp, supra. Denial of liability before the expiration of the time operates as a waiver, but not so when the time for proof of loss has expired. Bankers Life v. Byassee, 41 A. L. R. 381; Francis v. Ins. Co., 297 P. 122; Springfield Ins. Co. v. Olephant, 300 P. 711; Johnson v. Rich Co. 226 P. 515; Springfield Ins. Co., 209 P. 442. Denial of liability on the ground of encumbrances undisclosed is a waiver of notice and proof of loss, 22 A. L. R. 416. Respondents paid for the protection and have never been repaid. Cases of doubt are resolved in favor of the insured. 1 Thornton on Oil & Gas, 666. A contract of insurance prepared by the insurer will be construed liberally as against the insured and strictly as against the insurer. Worsick Street Paving Co. v. Accident Commission, 185 P. 953; Bankers Life Co. v. Race, 226 P. 324; Stringham v. Ins. Co., 75 P. 822. Forfeiture will not be declared if it can be avoided. North British Co. v. San Fran. Corp., 249 P. 761.

RINER, Justice. KIMBALL, C. J., and BLUME, J., concur.

OPINION

RINER, Justice.

Direct appeal proceedings bring this case here for the review of a judgment of the District Court of Converse County. The respondents, Cecil T. Howrey and L. B. Walters, will generally hereinafter be referred to either as the "plaintiffs" or by their respective names, and the appellant Star Insurance Company of America will be designated either as the "defendant" or as the "Star Company."

The principal facts material to be considered on this appeal are very little in dispute and are substantially as follows:

In 1920, one Clyde Francisco sold to Howrey and Walters aforesaid, and who lived in Douglas, Wyoming, an International automobile truck. The vendor himself, at the time of his prior purchase of the truck from the International Harvester Company of America, --hereinafter generally referred to as the "Harvester Company"--had not paid the full purchase price thereof but had given a mortgage, in due course placed of record, to the Harvester Company to secure the unpaid portion. The amount thus due that corporation at the time of Francisco's sale to Howrey and Walters was approximately the sum of $ 1000, and this amount the vendees assumed and agreed to pay. They also, on April 13, 1929, executed to Francisco a mortgage on said truck to secure their several notes to him evidencing the sale price of the vehicle and totaling $ 1600. The instrument last mentioned was filed for record in Converse county, April 15', 1929.

Respondent Walters was contemplating...

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