London & L. Fire Ins. Co. v. Turnbull

• Decision Date: 29 October 1887
• Citation: 86 Ky. 230,5 S.W. 542
• Parties: LONDON & L. FIRE INS. CO. v. TURNBULL and others.
• Court: Kentucky Court of Appeals

5 S.W. 542

86 Ky. 230

LONDON & L. FIRE INS. CO. v. TURNBULL and others.

Court of Appeals of Kentucky.

October 29, 1887

Appeal from court of common pleas, Jefferson county.

Hargis & Eastin, for appellant.

Brown Humphrey & Davie and Marshall & Lochre, for appellees.

BENNETT J.

The appellees R. B. Turnbull & Co. instituted suit in the Jefferson court of common pleas against the appellant, on a policy of insurance issued by the appellant on the second day of January, 1884, to the appellees R. B. Turnbull & Co. insuring the appellees' stock of goods against loss by fire in the sum of $5,000. The appellees R. B. Turnbull & Co. alleged that the value of the goods lost by fire amounted to $18,493; that the total amount of the insurance thereon by the appellant and other companies was $16,500.

The appellant contested the appellees' right to recover, upon the grounds-- First, that the appellees did not sustain the loss alleged; second, that the policy sued on was canceled before the loss of the goods by fire occurred; third, that the appellees, by false swearing as to the amount of the loss, forfeited their right to recover on the policy; fourth, that the action was not brought within the time agreed on by the terms of the policy; fifth, that the appellees had insurance on the stock of goods in other companies, amounting to $16,500 and that by the terms of the policy sued on the appellees could not recover a greater proportion of the loss sustained than the sum insured by the appellant bore to the whole amount insured on the goods. By an amended answer, which was made a cross-petition against the appellees, the Louisville Underwriters' and the Germania Insurance Companies, and the Manufacturers' Insurance Company, the latter was not served with process. The appellant alleged that on the eighth day of January, 1884, which was before the stock of goods was destroyed by fire, it gave its agents, Spalding, Knott & Co. directions to cancel this policy, and another issued by the Royal Insurance Company to the appellees Turnbull & Co., for $2,500, which company was under the management of the appellant; that said agents did proceed to cancel these policies; that at the same time Spalding, Knott & Co., they being also the agents of the appellees the Louisville Underwriters' and the Germania Insurance Companies, and the Manufacturers' Insurance Company, in order to keep the appellees Turnbull & Co. insured, caused the Louisville Underwriters' to issue a policy on the eleventh day of January, 1884, for $4,000, and the Germania on the ninth day of January, 1884, to issue a policy for $2,500, and the Manufacturers' on the eleventh of January, 1884, to issue a policy for $1,000, to the appellees Turnbull & Co., aggregating $7,500, in substitution and in lieu of the two policies canceled; that these new policies were issued by said companies, and placed in the hands of Spalding, Knott & Co., as their agents, to be delivered to the appellees Turnbull & Co. before the fire occurred; that after the stock of goods was destroyed these policies were delivered to the appellees Turnbull & Co. It is also alleged that the premiums on these policies were paid by the appellant; and that Spalding, Knott & Co., as the agents of these companies, were authorized to effect these insurances.

The appellant contended, upon the foregoing facts, that these policies were substituted policies for the policy of the appellant, and that the appellees Turnbull & Co. should look to them alone. But, if it should be held bound upon its policy, it should only be held bound for its pro rata share, and that said companies should be compelled to pay the appellees Turnbull & Co. their respective pro rata share. The allegations of this amended answer were denied by the appellees. By an amended answer and cross-petition, filed during the progress of the trial, the appellant alleged that said insurance companies, in consideration of $150, caused to be paid them by the appellant, undertook and agreed to issue said policies to the appellees Turnbull & Co., in substitution for the appellant's policy, whereby they were liable to the appellant in damages to the extent that it was held bound to the appellees Turnbull & Co. on its policy. The action and cross-action were tried by a jury, which trial resulted in a verdict for the appellees Turnbull & Co. for the full amount of the policy, and for the appellees the insurance companies. The appellant's motion for a new trial having been overruled, it has appealed to this court.

The appellant does not deny that it issued the policy to the appellees Turnbull & Co. The proof is clear that the property destroyed by the fire was worth as much as $18,495; that the appellant was duly notified of the loss; that there was no false swearing concerning the loss. We shall therefore regard these questions as out of the way. The seventh condition of the appellant's policy provides as follows: "The insurance may also be terminated at any time at the option of the company, on giving notice to that effect, and refunding a ratable proportion of the premium, if the same has actually been paid for the unexpired term of the policy." The notice mentioned in this condition has reference to the insured. A notice to the company's agent to cancel the policy is not sufficient to effect a cancellation of the policy; such notice is nothing more than the company's notice to itself that the policy must be canceled. The appellees Turnbull & Co. were not notified before the loss that the appellant intended to cancel the policy. Therefore, so far as the question of cancellation is concerned, the policy was not canceled at the time of the loss.

By the sixth condition of the policy it is provided that, "in case of any...