Lancaster Et Ux v. Southern Ins. Co

• Decision Date: 26 October 1910
• Court: North Carolina Supreme Court
• Parties: LANCASTER et ux. v. SOUTHERN INS. CO.

69 S.E. 214

(153 N.C. 285)

LANCASTER et ux.

v.SOUTHERN INS. CO.

Supreme Court of North Carolina.

Oct. 26, 1910.

1. Insurance (§ 307^*)—Stipulations—Provision for Forfeiture.

Where an adult of sound mind, who can read and write, accepts a policy containing unambiguous stipulations material to the risk which forfeit it for their breach, and the company makes no misleading representations as to their meaning, the stipulations become a part of the insurance contract so as to avoid it upon their breach, even though there was no previous application, and no express representations made by insured.

[Ed. Note.—For other cases, see Insurance, Dec. Dig. § 307.*]

2. Insurance (§ 150*) — Fire Insurance —-Provisions of Contract—Rider.

A rider attached to the face of a fire policy insuring certain gin machinery was headed "For Gin Systems Only, " and contained certain provisions applying specially to that kind of property, but endorsed, "Attached to and forming part of policy, " giving its number, and at the end of the entire policy it was stipulated that the policy was accepted under the fore going stipulations, together with such other provisions and conditions as might be indorsed thereto. Held, that the contract of insurance included the body of the policy as well as the rider, so that stipulations contained in the body of the policy bound insured.

[Ed. Note.—For other cases, see Insurance, Dec. Dig. § 150.*]

3. Insurance (§ 282*)—Forfeiture—Undivided Ownership—"Sole and Unconditional Ownership."

Where the purchaser of gin machinery took possession and gave purchase-money notes, which were recorded and reserved title in the seller, and all of the price had not been paid when the policy on the machinery was issued, the buyer was the sole and unconditional owner of the machinery within a stipulation in the policy for sole and unconditional ownership; such a stipulation merely contemplating that the property is not held jointly with others.

[Ed. Note.—For other cases, see Insurance, rent. Dig. §§ 601-635; Dec. Dig. 8 282*

For ether definitions, see Words and Phrases, vol. 8, pp. 7801-7802.]

4. Insurance (§ 282*) — Fire Insurance — Provision for Forfeiture — Stipulation of Sole Ownership.

The rule generally adopted is that a stipulation in a fire policy of sole and unconditional ownership is not violated by the existence of liens and incumbrances on the property.

[Ed. Note.—For other cases, see Insurance, Cent. Dig. §§ 601-635; Dec. Dig. § 282.*]

5. Insurance (§ 282*) —Fire Insurance — Stipulations Against Incumbrances — "Personalty."

Where the seller takes purchase-money notes and delivers possession of an engine and boiler, retaining title as security, and the contract of sale is registered pursuant to statute, the property retains its character as personalty both as between the parties and others claiming adversely to the lien, though attached to the realty, and is personalty within the meaning of a fire policy thereon, which avoided the policy if the subject of insurance was personalty, and was, or thereafter became, incumbered by a chattel mortgage.

[Ed. Note.—For other cases, see Insurance, Cent. Dig. §§ 601-635; Dec. Dig. § 282.*

For other definitions, see Words and Phrases, vol. 6, pp. 534G-5358; vol. 8, p. 7753.1

Appeal from Superior Court, Edgecombe County; Guion, Judge.

Action by M. L. Lancaster and wife against the Southern Insurance Company. From a judgment for defendant, plaintiff named appeals. Affirmed.

It was shown: That femme plaintiff, owner of a farm, "had erected a building and therein established a steam gin, the engine and boiler inclosed in brick, and same was being used for farm ginning." That said plaintiff took out a policy of insurance on the gin, engine, and boiler in the sum of $1,000, the contract being the ordinary standard form, with a rider attached to the face of the policy, on which was a heading "For Gin Systems Only, " and which contained certain specifications adapting the policy more fittingly, in certain features, to the kind of property insured and the operation of the same, and concluding with the statement "At-lached to and forms part of policy No. 48599, " the number of policy sued on. Plaintiff "admitted that notes reserving the title to the gin outfit were given and recorded and all of purchase price had not been paid at the time the policy was issued, and defendant admitted that the policy was issued and sent plaintiff through the mail in lieu of a policy in a company that had failed, and that no representations were made by plaintiff to get the policy." The property was destroyed by fire, proof of loss properly made, and present action instituted to recover on the policy. Recovery was resisted, chiefly by reason of breach of certain stipulations contained in the body of the policy, to the effect "that this entire policy shall be void * * * if the interest of the insured be other than the unconditional and sole ownership, and, 2nd, if the subject of the insurance be personal property and be or become incumbered by a chattel mortgage." There was the further general stipulation in the body of the policy that the entire policy should be void "If the interest of the insured in the property be not truly stated therein." Plaintiff contended that the stipulations should not be allowed to defeat a recovery (1) because at the time of taking out the policy no inquiry was made as to the title or condition of the property, and that no representations were made by plaintiff concerning the same, and that her rights are unaffected, therefore, by the stipulations relied upon; (2) that the contract of insurance by the nature of it is confined to that portion of it contained in the rider and as the stipulations in question do not appear therein, but only in the body of the policy, they are not relevant to the inquiry; (3) that on the facts the property insured had become realty, and in that event there had been no breach shown, etc. The jury having ascertained the value of the property destroyed by the lire, the question of defendant's responsibility was referred to the court on the facts, and the court, being of opinion that the policy was avoided by reason of the existence of an incumbrance for the unpaid purchase money in the form of a mortgage or conditional sale, duly recorded, gave judgment for defendant, and plaintiff excepted and appealed.

G. M. T. Fountain & Son, for appellant.

J. R. Gaskill and W. O. Howard, for appellee.

HOKE, J. (after stating the facts as above). Our decisions are to the effect, and they are in accord with the generally prevailing doctrine, that when a person of mature years and sound mind, who can read and write, accepts a policy of insurance containing stipulations material to the risk and on breach of which the policy is to be avoided, and there is nothing confusing or ambiguous in them, and no representations made which are calculated or intended to deceive as to their im port, the policy with the stipulations becomes the contract between the parties, to be enforced, while it stands according to its terms, and the principle should not be affected because in a given case there has been no previous application or no express representation made. Floars v. Insurance Co., 144 N. C. 232, 56 S. E. 915; Hayes v. Insurance Co., 132 N. C 702, 44 S. E. 404; Lasher v. Insurance Co., 86 N. Y. 423; Brown v. Insurance Co., 86 Ala. 189, 5 South. 500; Crikelair v. Insurance Co., 168 Ill. 309, 48 N. E. 167, 61 Am. St. Rep. 119. In the present case there is no allegation or suggestion of any ambiguity nor of anything done or said to confuse or mislead the claimant, and the policy with its stipulations must be taken as the contract under which the rights of these parties are to be determined. And plaintiff's second position cannot be maintained. The rider, while headed "For Systems of Gins Only, " contains the express provision, "Attached to and forming part of policy No. 49599, Southern Insurance Co. of New Orleans"; and, further, at the end of the entire policy is the stipulation: "This policy is made and accepted under the foregoing stipulations...