Leonard v. American Ins. Co.

• Decision Date: 26 May 1884
• Docket Number: 11,116
• Citation: 97 Ind. 299
• Parties: Leonard v. The American Insurance Company
• Court: Indiana Supreme Court

97 Ind. 299

Leonard v. The American Insurance Company

No. 11,116

Supreme Court of Indiana

May 26, 1884

Petition for a Rehearing Overruled Sept. 19, 1884.

From the Owen Circuit Court.

The judgment is affirmed, with costs.

J. H Fowler and A. B. Young, for appellant.

A. W Fullerton, W. Richards, S. O. Pickens, W. W. Moffett and W A. Pickens, for appellee.

OPINION

Howk, C. J.

This was a suit by the appellant against the appellee upon a certain policy of insurance, whereby the appellee undertook and agreed to pay all loss and damage which the appellant might sustain, by reason of fire or lightning, to certain described property, not exceeding in amount the sum of $ 2,350. It was alleged in his complaint, that the appellant was the owner of the insured property, and that the same was destroyed by fire, without design or gross negligence on his part, during the lifetime of the policy of insurance. The appellee answered in three paragraphs, of which the first was a general denial of the complaint, and each of the other paragraphs stated special or affirmative matters by way of defence. To the second and third paragraphs of answer, the appellant replied in three paragraphs, of which the first was a general denial, and each of the other paragraphs stated special matter in reply to a specific part only of the third paragraph of answer. The appellee's demurrers, for the want of sufficient facts, to the second and third replies, were sustained by the court, and the appellant failing and refusing to reply further to the third paragraph of answer, the court found and adjudged that the matters and things set forth in the third paragraph of appellee's answer were sufficient in law to bar the appellant's right of action on the policy of insurance described in his complaint. Thereupon, final judgment was rendered that the appellant take nothing by his suit, and that appellee recover of him its costs.

The case is before this court for the second time. American Ins. Co. v. Leonard, 80 Ind. 272. On the former appeal, it was held that the second paragraph of the defendant's answer stated a good defence to the action. But the sufficiency of the third paragraph of answer was neither considered nor decided by this court, on the first appeal. The judgment was then reversed, because of error in overruling a demurrer to a paragraph of reply, which was pleaded to the entire answer, but in fact responded to part only of the answer.

When the cause was returned to the circuit court, no change was made in either the complaint or answer; but the appellant, Leonard, filed amended replies.

In the second paragraph of its answer, the appellee alleged, in substance, that the premium notes, given by the appellant for the policy in suit, were due and unpaid at the time of the loss, and that the policy by its terms was thereby avoided. On the former appeal, this paragraph of answer was held to be a good defence, on the authority of American Ins. Co. v. Henley, 60 Ind. 515.

In the third paragraph of its answer, the appellee admitted its issue of the policy in suit, but averred that appellee was a mutual insurance company incorporated under the laws of the State of Illinois; that by the terms of the policy in suit, the laws constituting the appellee's charter were made a part of such policy; that in section 16 of appellee's charter, it was provided as follows: "Said company may make insurance for any term not exceeding five years, * * * in all cases where the assured has a title in fee simple, unincumbered, to the building or buildings insured and to the land covered by the same; but if the insured has a less estate therein, or if the premises be encumbered, the policy shall be void unless the true title of the assured, and the encumbrance on the premises be expressed therein." And the appellee averred that at the time of its issue of the policy in suit, the premises insured were encumbered by certain judgments, which encumbrances were not expressed in such policy, and the same was void. The appellee further alleged that the appellant made a written application to the appellee for such insurance; that in such application the appellant represented that the buildings to be insured were free from encumbrances; that, in truth, such buildings were encumbered by the lien of certain judgments; and that, therefore, by its terms, the policy in suit was void.

This paragraph of answer stated facts sufficient to constitute a good defence to the appellant's cause of action. In Indiana Ins. Co. v. Brehm, 88 Ind. 578, it was held by this court that a policy of insurance against loss by fire, issued upon a written application wherein it is falsely stated that the buildings to be insured are free from encumbrances, when in truth they were at the time encumbered by valid subsisting liens, can not be enforced. Wood Fire Ins., section 112; Commonwealth Ins. Co. v. Monninger, 18 Ind. 352; Cox v. AEtna Ins. Co., 29 Ind. 586.

The first paragraph of the appellant's reply was a general denial of the appellee's answer. The second and third paragraphs of the reply were pleaded to the third paragraph only of the answer. In the second paragraph of his reply, the appellant admitted the encumbrances on the buildings insured and on the real estate whereon such buildings were situate as the same were stated in the third paragraph of appellee's answer, except as to one of the judgments mentioned therein, but he averred that at the time the appellee took his application for the insurance of his property, described in such application and in the policy in suit, and at the time of the issuing of such policy of insurance on the property insured, the appellee had full knowledge of all said encumbrances on the buildings insured, and on the real estate upon which such buildings were situate, such encumbrances, and each and all of them, having been fully explained and made known to the appellee by the appellant, at and before the time of his making the application for such insurance and before the issue of the policy in suit; and that the appellee, at and before the taking of appellant's application for such insurance, and at the time of issuing to him such policy of insurance, had full knowledge and information of the said condition of the title to such buildings insured, and to the real estate whereon the buildings were situate. And the appellant averred that at the time of his making the application for such insurance, and at the time of the issue to him of the policy in suit, the provisions and conditions of the charter, under which the appellee did business, were not made known to him; neither...