Ins. Co. of Pennsylvania v. Indiana Reduction Co.
| Decision Date | 09 October 1917 |
| Docket Number | No. 9318.,9318. |
| Parties | INSURANCE CO. OF PENNSYLVANIA et al. v. INDIANA REDUCTION CO. |
| Court | Indiana Appellate Court |
OPINION TEXT STARTS HERE
Appeal from Circuit Court, Hendricks County; Geo. W. Brill, Judge.
Action by the Indiana Reduction Company against the Insurance Company of the State of Pennsylvania and another. From a judgment for plaintiff, defendants appeal. Affirmed.James Bingham and Remster A. Bingham, both of Indianapolis, and Edgar M. Blessing, of Danville, for appellants. Leander J. Monks and John F. Robbins, both of Indianapolis, and Henry C. Starr, of Richmond, and James P. Goodrich, of Winchester, for appellee.
Appellee commenced a separate action against each of appellants to recover on certain fire insurance policies issued by them and held by it, covering the same property and destroyed by the same fire. These actions were each put at issue on the part of appellants by filing their respective answers in general denial, and also affirmative paragraphs, predicated on certain stipulations in the policies in suit, the only one pertinent to the questions presented by this appeal being as follows:
“This entire policy, unless otherwise provided by agreement indorsed thereon or added hereto, shall be void *** if (any usage or custom of trade or manufacture to the contrary notwithstanding) there be kept, used, or allowed on the above-described premises *** gasoline.”
Each of such affirmative paragraphs of answer charge, among other things, that appellee, without appellants' knowledge, consent, or permission, kept, used, and allowed gasoline on the insured's premises, and thereby voided the policy on which such action was based. To said affirmative paragraphs of answer appellee filed replies in general denial, and special replies, alleging, in substance, among other things, that at the time the policies sued on were received by appellee, it was engaged in the process of degreasing garbage, and that in such process it was necessarily required to keep and use gasoline on the premises insured, as appellants at all times well knew, that it did so keep the same under such policies, with the knowledge and consent of appellant, and as a necessary part of its said business; that it at no time stored, kept, or used more gasoline on said premises than the need of its business at such times required; and that the gasoline so kept and used did not in any manner cause or contribute to the fire, causing the loss in question. By agreement, the two actions were consolidated and tried together as a single case by a jury. At the close of the evidence the jury, under a peremptory instruction, returned a verdict in favor of appellee against appellant, the Insurance Company of the state of Pennsylvania for $1,674.00, and against appellant, Pacific Fire Insurance Company for $2,232.00, and judgments were rendered accordingly. Appellants filed their motion for a new trial, which was overruled, and proper exceptions reserved by each. This action of the court constitutes the sole error assigned by appellants and relied on by each for a reversal. The motion for a new trial was based on the following reasons: (1) The court erred in giving to the jury at the close of the evidence a peremptory instruction to return a verdict for the plaintiff; (2) the verdict of the jury is not sustained by sufficient evidence; (3) the verdict of the jury is contrary to law; (4) errors of law occurring at the trial with reference to the admission and rejection of certain evidence. As the two cases involve the same questions of law and fact, we will consider them as one in determining the questions presented.
[1] On the trial it was shown by uncontradicted evidence, or by the admission of the parties, that the policies in suit were duly issued on the 10th day of August, 1912, and the premiums thereon paid; that a fire occurred on the 25th day of August, 1912, by which the property insured by said policies to the value of $72,280 was destroyed; that at the time of such fire the total amount of insurance held by appellee on said property was $45,500, which included the policies in suit; that at the time of such loss, the total value of the property covered by said policies was $102,370; that after such fire proper verified proofs of loss were made out in writing, and delivered to appellants on the 6th day of September, 1912; that such proofs of loss were never returned, and no objections thereto were ever made to appellee, but no payment was ever made under said policies on account of said loss. This evidence, standing alone, would entitle appellee to a recovery.
[2][3] Appellants' sole defense is based on a claim that, notwithstanding such facts, appellee is not entitled to recover for the reason that it voided the policies in suit by keeping and using gasoline on the insured premises,contrary to the provisions of such policies. As affecting this contention the undisputed evidence shows that at the time of the issuance of said policies, and continuously thereafter to the time of said fire, large quantities of gasoline were stored on the premises covered by said policies, and used by appellee in the conduct of its business thereon; that the insurance broker, through whom appellants secured such risks, while acting within the scope of his authority prior to the issuance of said policies, learned that appellee was keeping and using gasoline on said premises in the conduct of its business, and knew such fact when such policies were delivered; that the general agent of appellants, who countersigned said policies, learned such fact within four or five days after said fire occurred, but appellants did not at any time return, or offer to return, to appellee any portion of the premiums paid for said policies.
On this state of facts, the court gave the jury a peremptory instruction to return a verdict for appellee, which was done. Appellants' motion for a new trial calls in question the action of the court in so doing. The following rules of law, pertinent to the question before us, are well settled in this state: A provision in a policy of insurance, declaring it void if a prohibited article is kept or used on the premises, means only that it shall be voidable at the election of the insurer on the happening of such event. Western Ins. Co. v. Ashby (1913) 53 Ind. App. 518, 102 N. E. 45; Ætna Life Ins. Co. v. Bockting (1906) 39 Ind. App. 586, 79 N. E. 524;Metropolitan Life Ins. Co. v. Johnson (1911) 49 Ind. App. 233, 94 N. E. 785;Glen Falls Ins. Co. v. Michael (1906) 167 Ind. 659, 74 N. E. 964, 79 N. E. 905, 8 L. R. A. (N. S.) 708;Commercial Life Ins. Co. v. Schroyer (1911) 176 Ind. 654, 95 N. E. 1004, Ann. Cas. 1914A, 968. Where such prohibited article is being kept and used on the insured premises at the time of the issuance of such policy and acceptance of the premium therefor, and the insurer knows such fact at the time, it waives the right to declare the policy void on account of such prohibited act. Ohio Farmers' Ins. Co. v. Vogel (1905) 166 Ind. 239, 76 N. E. 977;Farmers' Mutual Fire Ins. Co. v. Jackman (1904) 35 Ind. App. 1, 73 N. E. 730;Supreme Tribe, etc., v. Lennert (1912) 178 Ind. 122, 98 N. E. 115;Gray v. National Benefit Assn. (1887) 111 Ind. 531, 11 N. E. 477;Globe & Rutgers Fire Ins. Co. v. Indiana Reduction Co. (1916) 113 N. E. 425.
[4] If the insurer has no knowledge that such prohibited article is being kept or used on the insured premises at the time of the issuance of such policy, but subsequently discovers such fact, it must tender back, or in some appropriate way restore, or offer to restore, to the insured, the...
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