Loehner v. Home Mut. Ins. Co.

• Decision Date: 31 October 1852
• Citation: 17 Mo. 247
• Parties: LOEHNER AND WIFE, Appellants, v. HOME MUTUAL INSURANCE COMPANY, Respondent.
• Court: Missouri Supreme Court

17 Mo. 247

LOEHNER AND WIFE, Appellants,

v.HOME MUTUAL INSURANCE COMPANY, Respondent.

Supreme Court of Missouri.

October Term, 1852.

1. Where the charter of a mutual insurance company provided that, if the assured should fail to state in his application, which was made a part of the policy, any incumbrance that might exist on the insured premises, his policy should be void, it was held, that a failure to disclose an incumbrance avoided the policy, whether the incumbrance was material to the risk or not--that the representations which were made a part of the policy became warranties.

2. In an action on such a policy, parol evidence would not be admissible to show that the assured mentioned the incumbrance to the agent of the company, at the time of his application, and that the agent said it was so small it need not be reduced to writing.

3. Although a failure to disclose an incumbrance would avoid such a policy, as to the house insured, yet it would not avoid it as to furniture insured in the same policy, but separately appraised, unless the fact concealed was shown to be material to the risk.

4. In determining the materiality of a fact suppressed, with regard to the use of the premises upon which insurance is sought, only the natural consequences of such use are to be regarded. Thus, acts of lawless violence upon a bawdy house, by which it is burned down, are not the natural consequences of its use as a bawdy house.

5. A policy may be void in part, and valid in part, if the subject matter is capable of being separated.

6. It seems that a house cannot be proved to be a brothel by common reputation.

Appeal from St. Louis Court of Common Pleas.

Henry N. Hart, for appellants. 1. The court erred in excluding parol evidence of the disclosure of the incumbrance, at the time of the application, to the agent of the defendant, and of the agent's reply. 2. The court erred in refusing appellant's 4th, 6th and 8th instructions, and in giving respondent's first instruction. 3. The description of the building as contained in the application and policy, and therefore warranted, was fully sustained. Cowper, 785. 1 Ryan & Moo. 92. 2 N. Y. Term Rep. 222. 4. No fact material to the risk was concealed by the insured. The existence of a deed of trust did not increase or affect the risk. The authorities are numerous, that even a misrepresentation, though it be fraudulent, must also be material to the risk, to affect the right to recover. McDowell v. Fraser, Douglas, 260. 5 Taunt. 430. 1 Pet. 188. 2 ib. 25. 5 Cranch, 100. Hughes on Insurance, 501. Park on Ins. 648. 9 B. & C. 693. 4 Mass. Rep. 330. 2 Caines' Rep. 25. 1 Taunt. 343. 6 Wend. 488. 6 Cow. 673. Whether a misrepresentation is material or not, is a question for a jury. Park on Ins. 273, 274. 4 Bos. & Pull. 151. 13 East, 47. 12 J. R. 513. 5. The plaintiffs ought at least to have recovered for the piano and household furniture. 6. The court below erred in admitting evidence of the general reputation of the house in question.

J. Spalding and B. A. Hill, for respondent. 1. The representations in the written application were warranties and conditions, on which the validity of the policy and the liability of the insurer depended. 1 Phill. on Ins. 410, chap. 9, sec. 10. Ib. 346, chap. 9, sec. 1. 6 Cow. 673. 7 Wend. 270. 6 Wend. 488. In this case, the use of the premises is stated in the application (which is a part of the policy) to be for a dwelling house, but in fact it was used as a bawdy house and dram shop, and this avoided the policy. 2 Denio, 75. 2 Wood. & Min. 472. 2. If the application is a part of the policy and therefore a warranty, then the failure to disclose the deed of trust was a breach of the warranty; if it is a mere representation, then the concealment of the deed of trust was a suppression of a fact material to the contract, and having a bearing on the terms of it. 3. Evidence of the general reputation of the house was properly admitted. It was proved in fact to be of a bad character; and the publicity of its character materially increased the risk. In that view it was competent. But common reputation is legal and competent proof of the fact. Dudley (S. C.), 346. 17 Cow. 467. 4. The testimony that the agent of defendant was informed as to the deed of trust was properly excluded. The policy is a written contract and merges all oral statements. The testimony that defendant knew the character of the house, at the date of the policy, was also properly excluded. The warranties of the policy covered the case, and one of these was that the house should be a dwelling house. This, like all warranties, was a condition precedent to recovery on the policy. But this character of the house was continued down to the time of the fire, in breach of the warranty, and was evidently the cause of the fire.SCOTT, Judge, delivered the opinion of the court.

This was an action upon a fire policy covering a dwelling house and furniture, begun by the appellants against the respondent. The insurance was effected by Jeanettine Clementine, who afterwards intermarried with the appellant, August Loehner.

Among other defences, the answer sets up that the written application for insurance, which was made a part of the policy, did not truly state the incumbrances which covered the insured premises, nor did it fully describe the character of the house sought to be insured. That there was a deed of trust upon the house and lot at the time of the application for insurance, which was not mentioned; and that the building, though represented as a dwelling house, was used as a bawdy house and a dram shop.

The charter of the company provided, that the “insurance shall be made, in all cases, upon the representation of the assured contained in his application therefor and signed by him or his attorney, which application shall, in fairness and good faith, state all the material circumstances within his knowledge which may affect the risk.” The thirteenth section of the charter also provides, that “if the assured have a lease estate on the buildings insured, or if the premises be incumbered, the policy shall be void unless the true title of the assured and the incumbrances be expressed thereon.” By express words the application for insurance was made a part of the policy. In this paper is the following enquiry: What is the title and whether incumbered by mortgage or otherwise, and to what amount? The answer to this interrogatory is: “on leased ground, six years to run.” When the application was made for insurance, there was a deed of trust upon the house and lot for five or six hundred dollars. The house was insured for fifteen hundred dollars, two-thirds of its appraised value. On the trial, evidence was offered to prove that the existence of this deed of trust was made known to the agent of the company, at the time the answer to the interrogatory was given, but that he refused to write it down, saying that the amount was too trifling. This evidence was excluded, to which an exception was taken. A memorandum was endorsed on the policy to the effect that the company would be bound by no statement made to the agent not contained in the application. By the terms of the charter, every person causing himself to be insured becomes a member of the company. There was evidence that the building was used as a bawdy house. Evidence of reputation as to that fact was also admitted, which was excepted to. A dram shop license was taken out by the assured, though there was no proof of any tippling at the house. Wine was sold by the bottle and drank in the rooms. The by-laws of the company classed the buildings insured, and fixed the premium of insurance according to the materials of which they were composed, the manner of their construction, the purposes for which they were used, their situation as to other buildings, and all other circumstances affecting the risk. Some trades and some kinds of merchandise were deemed hazardous, for which an increased premium was demanded, proportioned to their risk of taking fire. It does not appear that the purposes for which the buildings of the appellants were used were enumerated as increasing the risk. The company was not liable for losses occasioned by an insurrection of the citizens. The buildings and furniture were destroyed by a mob, provoked by the death of a citizen at the insured building, produced by violence. The court gave the following instructions for the plaintiff:

12. The defendant has not shown that there was any insurrection of the citizens at the time of the destruction of the property mentioned in the policy, and that is, therefore, no defense.

13. It is not necessary that the furniture and piano should have been actually in the house when they were destroyed by fire, but if in the fire they were removed by a mob to the yard and burnt, the loss is still secured by the policy.

14. The word appurtenances in the deed of trust aforesaid, does not convey the leasehold in trust of the plaintiff.

15. The word appurtenances in the deed of trust aforesaid, does not convey the buildings upon the ground in question, nor make an incumbrance, within the meaning of the policy.

16. But a conveyance of the lot on which the building was situated, was a conveyance of the building and an incumbrance within the meaning of the policy.

17. The defendant here has shown no compliance with the requirements of the policy in regard to the assessments and notice thereof to the plaintiff, Jeanettine.

And the court refused the following, asked by the plaintiff:

1. The fact that the plaintiff sold wines at the house insured, after the execution of the policy, is no violation or breach of the warranties of the policy.

2. If the jury believe from the evidence, that the policy makes no distinction in the rate of premium between a dwelling house and a bawdy house, and none between a dwelling house where wines are sold and where they are not, neither being classed in the policy as more hazardous...