Manchester Fire Assur. Co. v. Abrams

• Citation: 89 F. 932
• Decision Date: 24 October 1898
• Docket Number: 442.
• Parties: MANCHESTER FIRE ASSUR. CO. v. ABRAMS.
• Court: U.S. Court of Appeals — Ninth Circuit

89 F. 932

MANCHESTER FIRE ASSUR. CO. v. ABRAMS.

No. 442.

United States Court of Appeals, Ninth Circuit.

October 24, 1898

On February 12, 1894, the defendant in error, Robert Abrams entered into a contract with one E. E. Bulson, by the terms whereof the said Bulson was to take possession of the farm of the defendant in error for a period of two years, the defendant in error to furnish all seed, teams, farming utensils, and the labor of one man, and the said Bulson to pay for all the other labor necessary for putting in harvesting, and threshing the crops, and for all other labor performed on the farm, and certain other expenses, in consideration whereof he was to receive one-third of all the crops raised on the premises, and one-third of the increase of the stock. In 1895, Bulson, having exhausted his means became unable to perform his part of the agreement.

A new and verbal agreement was then entered into, by the terms whereof the defendant in error was to pay all the men and all the expenses of operating the farm, and was to have the possession of the crops, and sell the same, and was to charge Bulson with the expenses so assumed, and was to credit him with the proceeds of one-third of the crop. What Bulson was to receive is succinctly expressed in the following question and answer: 'Q. What was he to receive out of the crop, if anything? A. He was to receive one-third of what was left, if there was anything left. ' The same arrangement was, by agreement, subsequently extended over the year 1896. In pursuance of this verbal contract, the defendant in error went upon the premises with his sons, to assist in the harvesting and haying, employed a large number of men, and furnished all the supplies required for conducting the farm. Having advanced, as he believed, an amount which exceeded the value of one-third of the crop, he took out insurance on 600 tons of the hay which had been made under the agreement, and which had been stored in a barn. He made an oral application for insurance to the agents of the plaintiff in error, and truly answered all questions which they asked him. No question was asked concerning his title to the property. On August 19, 1896, the policy was issued and delivered to the defendant in error, insuring the hay against loss by fire in the amount of $2,500. On October 10, 1896, the barn and its contents were destroyed by fire. The loss of the hay was adjusted at the sum of $2,412. The policy contained the usual stipulation in regard to the ownership of the property by the insured, as follows: 'This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void if * * * the interest of the assured be other than unconditional and sole ownership. ' To the action brought by the defendant in error to recover upon the policy, the insurance company made three defenses: First, That the policy was void because the interest of the insured in the property was other than that of unconditional and sole ownership. Second, That, in making his proofs of loss, the insured had made oath that the hay belonged exclusively to him, and that no other person had any interest therein, and that thereby he avoided the policy by violating the condition following: 'This entire policy shall be void if the insured has concealed or misrepresented, in writing or otherwise, any material fact or circumstance concerning this insurance or the subject thereof, or if the interest of the insured in the property be not truly stated therein, or in case of any fraud or false swearing by the insured touching any matter relating to this insurance or the subject thereof, whether before or after loss. ' Third, That, as the insured was the owner of only an undivided two-thirds of the hay, his loss was only two-thirds of the value thereof.

Harold Preston, E. M. Carr, and L. C. Gilman, for plaintiff in error.

H. G. Struve, John B. Allen, E. C. Hughes, and Maurice McMicken, for defendant in error.

Before GILBERT, ROSS, and MORROW, Circuit Judges.

GILBERT Circuit Judge, after stating the facts as above, .

The assignments of error principally relied upon by the plaintiff in error are: That the court erred in instructing the jury as follows:

'Further than that, I will say that a man is the sole owner of property when he has it in his possession, and has an unconditional right to the possession of it, and the unconditional right to sell and dispose of it for his own benefit, and to appropriate and retain the entire proceeds of the sale of it, if he sees fit to sell it. When the conditions are such that he has got the property, and got a right to sell it, and to take the money, and appropriate it to his own use, then it is his entirely and unconditionally.'

-- And that the court erred in refusing to give the following instruction, which was requested by the plaintiff in error:

'There has been introduced in evidence before you a certain contract between the plaintiff and one Bulson, under which the hay, the subject of the insurance, was produced; and I charge you that, under the terms of this contract, the hay, when harvested, became and was the joint property of Abrams and Bulson, Abrams owning an undivided two-thirds, and Bulson owning an undivided one-third, thereof, and that under said contract the interest of the plaintiff, Abrams, in said hay was not that of unconditional and sole ownership.'

Upon the evidence disclosed in the record, we do not think that the circuit court erred in ruling that the interest of the defendant in error in the property insured was, at the time of the insurance and the loss, not less than unconditional and sole ownership. The hay had been produced upon his farm at his expense, by the labor of himself and his sons, assisted by Bulson. He had the possession of all the hay, and the right to sell and dispose of the same in any way in which he might see fit, without the consent of Bulson, and to apply the proceeds to his own use. The only restriction upon his absolute right to the proceeds was that, in case one-third of the amount realized upon a sale of the hay should be more than sufficient to reimburse him for his outlay and expenses, the residue of that third was to go to Bulson. The interest of Bulson was a contingent one only. He was in the attitude of any laborer who should undertake to work on a farm under an agreement that, in case the farm products to which his labor contributed should be sold for more than a certain figure, he should receive the overplus for his wages. In such a case the laborer has no title to any portion of the crop which is produced. He is a laborer for hire, whose wages are contingent upon the amount to be realized upon sale of the property. When the property is sold, and it appears that, out of the moneys received therefor, a certain sum is due him, his employer becomes his debtor to that amount. It is not disputed in the testimony that the advances made by the defendant in error in pursuance of his oral agreement with Bulson very considerably exceeded the value of one-third of all the crops. This was true, not only at the time when the policy was taken out, but continuously thereafter.

But if, upon any construction of the evidence, it can be said that the defendant in error was not stricti juris the owner of the hay, it, nevertheless, clearly appears that substantially and in contemplation of the law, as interpreted by the decisions of the courts, he was the owner, and, as such, entitled to insure the property as his own. It has been uniformly held, notwithstanding the stipulation that the policy shall be void if the interest of the insured be less than that of a fee-simple title to the land whereon the insured property is situated, that the stipulation is complied with if it appear that the insured is substantially or equitably the owner of the property, and entitled to the benefits of the same, although the title may be in another, and the insured may hold the property upon a bond for a deed only, or upon a contract for a conveyance upon which only a portion of the purchase price has been paid.

Baker v. Insurance Co. (Or.) 48 P. 699; Hall v. Insurance Co. (Mich.) 53 N.W. 727; Hough v. Insurance Co., 29 Conn. 10; Insurance Co. v. Dyches, 56 Tex. 573; Insurance Co. v. Erb, 112 Pa.St. 149, 4 A 8; Insurance Co. v. Staats, 102 Pa.St. 529; Insurance Co. v. Dunham, 117 Pa.St. 460, 12 A. 668; Dooly v. Insurance Co., 16 Wash. 155, 47 P. 507; Loventhal v. Insurance Co. (Ala.) 20 So. 419; Insurance Co. v. May (Tex. Civ. App.) 35 S.W. 829; Haider v.Insurance Co. (Minn.) 70 N.W. 805; Insurance Co. v. Brady (Tex. Civ. App.) 41 S.W. 513; Carey v. Insurance Co. (Pa.) 33 A. 185. In the case last cited, it was held that a policy providing that the insured shall be the sole and unconditional owner of the property is not void, although the insured had not paid all the purchase money, had not obtained a deed, and had bought under a contract providing that failure to make payments when due should work a forfeiture of all rights thereunder. In Insurance Co. v. Brady, supra, it was held that there was no breach of a similar warranty from the fact that the husband had insured, as his own, furniture which belonged to his wife before their marriage, since, under the law of the state of his residence, the husband 'has the sole management and control of his wife's separate property. ' In Insurance Co. v. May, supra, the insured was in possession of land on which she had erected improvements under a verbal contract with the owner to convey the same to her in fee simple upon payment of the price. It was held that she was the unconditional owner of the property within the condition of a policy of insurance providing that the policy should be void if the interest of the...