Indiana Lumbermen's Mutual Insurance Company v. Meyers Stave & Manufacturing Company

• Decision Date: 19 May 1924
• Docket Number: 388
• Parties: INDIANA LUMBERMEN'S MUTUAL INSURANCE COMPANY v. MEYERS STAVE & MANUFACTURING COMPANY
• Court: Arkansas Supreme Court

261 S.W. 917

164 Ark. 359

INDIANA LUMBERMEN'S MUTUAL INSURANCE COMPANY v. MEYERS STAVE & MANUFACTURING COMPANY

No. 388

Supreme Court of Arkansas

May 19, 1924

Appeal from Clay Circuit Court, Eastern District; W. W. Bandy Judge; reversed.

STATEMENT OF FACTS.

Meyers Stave & Manufacturing Company sued the Indiana Lumbermen's Mutual Insurance Company and other insurance companies on six policies of insurance in the sum of $ 3,000 each.

The plaintiff was engaged in the manufacture of staves and lumber at Piggott, Arkansas, and the insurance policies in question covered its staves and lumber within a continuous clear space of 200 feet. On the 17th day of August, 1921, while the policies were in force, the plaintiff had staves of the value of $ 5,000 destroyed by fire. The staves were stacked in a dry-kiln at the time they burned. The dry-kiln was located only 20 feet distance from the mill and engine-room, and there was not maintained a clear space of 200 feet between it and* the manufacturing establishment as defined in the policies.

The plaintiff recovered judgment, and the case was appealed to the Supreme Court. In an opinion delivered on April 9, 1923 this court held that, under a fire insurance policy covering "staves, lumber and all other timber products" and warranting "that a clear space of 200 feet shall be maintained between the property insured and any woodworking or manufacturing establishment, and that said space shall not be used for the handling or piling of lumber thereon for temporary purposes," except while in transportation or being loaded or unloaded, the warranty excluded liability for staves which were burned in a dry-kiln only 20 feet distant from the mill and engine-room. Indiana Lumbermen's Mutual Ins. Co. v. Meyers Stave & Mfg. Co., 158 Ark 199.

On the former appeal the court did not undertake to determine the legal sufficiency of the evidence to make out a case of waiver by estoppel. Upon the remand of the case the complaint was amended so as to state the grounds upon which a recovery was claimed on the basis of estoppel. At the trial of the case it was shown by the plaintiff that it owned 13 acres of land on which its plant is located. It had staves worth $ 20,000 stacked on its yards, and it is admitted by the insurance companies that these staves are covered by the policies sued on. The plaintiff also had staves worth something over $ 5,000 stacked in its dry-kiln. These were the staves which were destroyed by fire, and which are the subject-matter of this lawsuit. The staves in question were not placed in the dry-kiln for the purpose of being dried in the usual way, but were merely stacked there to preserve them, just as staves were stacked on the yards. The staves which were burned in the dry- kiln did not have a continuous clear space of 200 feet, as provided in the policies, and the dry-kiln was situated only 20 feet from the mill and engine- rooms. After the dry-kiln was erected, an agent of the insurance companies examined the plant and yards of the plaintiff and made a plat or sketch of the same. At this time the staves were stacked in the dry-kiln, and the agent of the insurance companies saw them stacked there. The sketch or plat of the plant was made with the view of the plaintiff's obtaining insurance on its plant and fixtures. It already had insurance on its staves. The policies sued on were either in force at that time, or they are renewals of policies which were in force at that time. The agent of the insurance companies did not tell the plaintiff that the staves stacked in the dry-kilns were not covered by the policies then in force, nor does it appear that he was asked any questions with regard thereto.

The jury returned a verdict for the plaintiff, and from the judgment rendered the defendants have duly prosecuted an appeal to this court.

Judgment reversed, and cause dismissed.

Harper E. Harb and Oliver & Oliver, for appellants.

1. Under the evidence in the case, appellant was entitled to an instruction to the effect that, before the jury could find for the plaintiffs, they must find from a preponderance of the evidence that the plaintiffs were without knowledge of the fact that the staves, while in the dry-kiln, were not insured, and were without means of obtaining such knowledge. 21 C. J. 1119, § 122; Pomeroy's Equity Jurisprudence § 805.

2. The verdict should have been directed for the appellant. There is no evidence anywhere in the record sufficient to raise an estoppel. 97 Ark. 43; 21 C. J. 1139, § 139, and authorities cited.

W E. Spence and Gautney & Dudley, for appellees.

Any action on the part of appellant which led appellees honestly to believe that a forfeiture of the policies would not be incurred will estop the company from insisting on a forfeiture. 94 Ark. 222; 99 Ark. 476; 53 Ark. 495; 111 Ark. 229; 79 Ark. 315; 122 Ark. 243. Knowledge on the part of the appellants that the warranty of a continuous clear space clause did not represent the existing state of facts, and that there was no intent to change the situation, prevents a forfeiture of the policies for a breach of the warranty, where the company accepts the premium and issues or renews the policy without taking any steps subsequently to rescind it, though knowing of the breach of warranty. 94 Mich. 389, 22 L. R. A. 319. See also 122 C. C. A. 346, 204 F. 32; 52 Ark. 11; 142 Ark. 132; 131 Ark. 77; 53 Ark. 215; 26 C. J. 313, § 389.

OPINION

HART, J., (after stating the facts).

The main reliance of the insurance companies for a reversal of the judgment is that the verdict is without legal evidence to support it, and in this contention we think counsel for the insurance companies are correct.

It is sought to uphold the judgment upon the authority of Michigan Shingle...