Johansen v. Home Fire Ins. Co.

• Decision Date: 08 April 1898
• Citation: 54 Neb. 548,74 N.W. 866
• Parties: JOHANSEN v. HOME FIRE INS. CO.
• Court: Nebraska Supreme Court

54 Neb. 548

74 N.W. 866

JOHANSEN

v.HOME FIRE INS. CO.

Supreme Court of Nebraska.

April 8, 1898.

Syllabus by the Court.

1. A fire insurance policy which classifies the property insured, and limits the amount of insurance on each class, is divisible, and may be valid as to one class, and void as to another.

2. A fire insurance policy covering real estate provided that the policy should become void if the property should be sold, transferred, or incumbered. When the policy was issued, the land was incumbered by mortgage to the amount of $2,500. Another tract belonging to the insured was incumbered to the amount of $1,300. Five hundred dollars of these debts was a common charge on both tracts. After the policy was written, and before the fire resulting in the suit, the insured took up all the mortgages, and executed in their stead a mortgage on both tracts to secure $3,500, being the old debts with accrued interest. Held, that the fact that the incumbrance on the insured property had been substantially changed and increased in amount rendered the policy void, and that the court could not speculate on the relative values of the two tracts or the probable manner of enforcement of the mortgages to ascertain if the risk had been increased.

3. An insured who incumbers his personal property by chattel mortgage after it has been insured, and contrary to the provisions of the policy, may, nevertheless, recover therefor if the mortgage is discharged before the loss occurs.

4. Evidence tended to show that there had been an agreement, at the time a chattel mortgage was made, that, upon the making of a certain payment, the property afterwards burned should be released from the lien of the mortgage, and that such payment had been made, and a release of the property expressed by parol. Held, that it was error to direct the jury to find for the insurance company as to such property, because of a provision in the policy rendering it void if the property became incumbered.

Error to district court, Washington county; Blair, Judge.

Action by Charles Johansen against the Home Fire Insurance Company. From a judgment entered on verdict directed for a less amount than the claim, plaintiff brings error. Reversed.W. S. Cook and Frick & Dolezal, for plaintiff in error.

J. Fawcett and Byron G. Burbank, for defendant in error.

IRVINE, C.

This was an action on a policy of fire insurance, naming a single premium, but classifying the property insured, and limiting the insurance to a stated amount on each class. Among the items of insurance were $350 on a barn, $500 on horses, mules, and colts, $100 on harness, wagons, etc., and $150 on grain. The barn was totally destroyed by fire, and eight horses, a quantity of harness, and a quantity of grain were also destroyed. The defenses relied on relate to the existence of incumbrances on the insured property. At the close of the evidence, the court, at the request of the defendant, instructed the jury to return a verdict for $100 and interest. The record does not distinctly disclose on what ground this instruction was based, but it is assumed in argument that the court limited the recovery to the grain, holding that the making of incumbrances on the real estate, the horses, and the harness precluded a recovery for their loss. As there was no pleading or evidence which assailed the insurance upon the grain, we feel justified in reading into the record sufficient to warrant this assumption of counsel.

A policy such as the one here involved is divisible in its nature, and may give rise to a liability as to one class of property insured, although it be invalid as to another class. Insurance Co. v. Schreck, 27 Neb. 527, 43 N. W. 340;Insurance Co. v. Fairbank, 32 Neb. 750, 49 N. W. 711;Insurance Co. v. Grimes, 33 Neb. 340, 50 N. W. 168. Therefore the defenses set up with regard to the incumbrances upon the real estate and those upon the personalty must be considered separately.

When the policy was written the land was incumbered by two mortgages, one for $2,000, and the other for $500. The land upon which the insured property was situated consisted of 160 acres, and was the homestead of the plaintiff. Half a mile away, and in another county, was a tract of 80 acres owned by the insured. On this there was a mortgage of $800, and the $500 mortgage referred to also extended to this tract. The application for insurance, signed by the insured, stated that the property was unincumbered; but there is evidence tending to show that the incumbrances were...