Mayfield v. North River Insurance Company

• Decision Date: 24 November 1931
• Docket Number: 27899
• Citation: 239 N.W. 197,122 Neb. 63
• Parties: VIVIAN I. MAYFIELD ET AL., APPELLEES, v. NORTH RIVER INSURANCE COMPANY, APPELLANT
• Court: Nebraska Supreme Court

239 N.W. 197

122 Neb. 63

VIVIAN I. MAYFIELD ET AL., APPELLEES, v. NORTH RIVER INSURANCE COMPANY, APPELLANT

No. 27899

Supreme Court of Nebraska

November 24, 1931

APPEAL from the district court for Richardson county: ELWOOD B CHAPPELL, JUDGE. Affirmed.

AFFIRMED.

Syllabus by the Court.

The adoption of our insurance code of 1913 (Comp. St. 1929, c 44) evidences the legislative intent that the provisions of the New York standard form of fire insurance, as then existing and as then construed by the courts of that state, should be adopted as the basis of the Nebraska insurance contract, expressly subject, however, to all other provisions contained in such insurance code which are inconsistent with or modify the provisions of such New York standard form.

By construction section 44-322, Comp. St. 1929, is to be regarded, in legal effect, incorporated in and forming a part of the policy in suit.

Under the statutes of Nebraska, the violation of the conditions or the breach of the warranty in a fire insurance policy expressed in the words, " while located and contained as described herein, * * * and not elsewhere," by the removal of the property insured from the place described in the policy, does not invalidate the insurance contract, unless such breach of contract contributed to the loss. Comp. St. 1929, § 44-322.

Appeal from District Court, Richardson County; Chappel, Judge.

Action by Vivian I. Mayfield and another, doing business as a partnership under the name and style of the Richardson County Hatchery, against the North River Insurance Company of the City of New York. Findings and judgment for the plaintiffs. From an order overruling its motion for a new trial, defendant appeals.

Judgment affirmed.

Montgomery, Hall, Young & Johnsen, for appellant.

F. A. Hebenstreit and J. C. Mullen, contra.

Heard before GOSS, C. J., DEAN, EBERLY and PAINE, JJ., and BLACKLEDGE, District Judge.

OPINION

EBERLY, J.

This is an action at law on a policy of fire insurance. It was concededly issued by the appellant, hereinafter designated as defendant, to the appellees, hereinafter referred to as the plaintiffs, doing business as a partnership under the name and style of Richardson County Hatchery. Its terms insured the copartners "against all direct loss or damage by fire, * * * to an amount not exceeding Fifteen Hundred ($ 1,500) Dollars (for a definite period), to the following described property while located and contained as described herein, and not elsewhere, to wit: $ 1,500 on stock of merchandise * * * all only while contained in the one-story, metal roof, ironclad building, occupied as a Hatchery and Poultry Supply Store, situated on lots 23 and 24, block 90, of Falls City, State of Nebraska."

It was alleged in plaintiffs' petition that on or about the 1st day of July, 1929, the plaintiffs removed the stock insured from the location as above described to a building located on lot 12, block 221, Falls City, "with the full knowledge, oral authority and consent of the defendant company by and through its agent, C. A. Johnson, and at which place" the property covered was thereafter totally destroyed by fire.

The defendant company's answer contained, first, a general denial; second, admitted the execution of the policy of insurance in suit; quoted the language of the description hereinbefore set forth; denied the authority of its agent to waive any provision of the policy except in writing; and further alleged that the fire involved in this action was "not at the location covered by the policy, and defendant is not liable for any loss which may have resulted therefrom."

To this the plaintiffs filed a reply which, in addition to a denial of the new matter contained in the answer, set forth additional facts which they allege amounted to an estoppel.

By agreement a jury was waived and the case was tried to the court, which resulted in findings and judgment for the plaintiffs as prayed. From an order overruling defendant's motion for a new trial this appeal is prosecuted.

Defendant in this court challenges the sufficiency of the evidence, and alleges that the district court erred "in failing to hold, as a matter of law, that the policy provision (heretofore quoted) constituted a coverage condition or risk limitation, which, in the absence of an express consent equivalent to the making of a new contract, covered the property only at the location described in the policy."

From the foregoing it is evident that the determining words in this controversy are, "the following described property while located and contained as described herein, and not elsewhere, to wit:" and, "all only while contained in." Considered without reference to context, these provisions constitute an essential part of, and are identified with, the New York standard fire insurance policy form. Of this policy form this court has said: It is "a definite and well-known form of contract. Its characteristics, terms and conditions are known and recognized by the legislature of New York and other states, and are familiar to all carrying on the business of fire insurance." State v. Howard, 96 Neb. 278, 287, 147 N.W. 689.

It may be said in addition that this standard form, first enacted substantially by the legislature of New York in 1886, has, with passing time, received a definite and settled judicial construction by the courts of New York. This is especially true as to the controlling words hereinbefore quoted. Thus in 1894 we find the following language employed in Bahr v. National Fire Ins. Co., 80 Hun (N.Y.) 309, 29 N.Y.S. 1031: "The action was to recover $ 200, the insurance on a carriage * * * 'while located and contained as described herein, and not elsewhere, to wit: * * * while contained in the frame building (here follows the precise description).' The carriage was burned in a livery stable and horse shoeing shop, * * * a block and a half away from the place named in the policy. This judgment cannot stand. The location of the insured property was a warranty, a breach of which avoided the policy. Bryce v. Lorillard Fire Ins. Co., 55 N.Y. 240." This construction has continued unchanged to the present time. In American Surety Co. v. Patriotic Assurance Co., 242 N.Y. 54, 63, 150 N.E. 599 (January, 1926), we find the New York court of appeals adhering to the view thus expressed, and employing the following language: "The provisions of the New York standard fire insurance policy of which we may take judicial notice provide that the insurer insures against damage by fire to the property described in the policy 'while located and contained as described herein * * * but not elsewhere.' The description is a warranty, the truth of which is a condition precedent to any liability on the part of the insurer. Bryce v. Lorillard Fire Ins. Co., 55 N.Y. 240; Bahr v. National Fire Ins. Co., 80 Hun 309, 29 N.Y.S. 1031; London Assurance Corporation v. Thompson, 170 N.Y. 94, 62 N.E. 1066."

Thus, it must be conceded that under the terms of the New York standard fire insurance policy form, as construed by the courts of that state, unmodified by legislation, the controlling words of this policy in suit must be deemed a warranty, the truth of which at the time of this loss is a condition precedent to recovery thereon.

It would appear, however, that the legal effect of the language quoted, assuming its character as a warranty in the technical sense of that term to be unquestioned, has been in legal effect modified by Nebraska legislation. In 1913 the legislature of that year adopted an insurance code which appears as chapter 154, Laws 1913. It was approved April 18, 1913. It was passed for the purpose of providing "for the organization and government of insurance companies and to regulate, supervise and control the business of insurance in Nebraska," etc. The provisions of this enactment with amendments thereto are now carried as chapter 44, Comp. St. 1929. This legislation provided in part: "No fire insurance company shall issue any fire insurance policy covering any property or interest therein in this state other than on a form prescribed by the department of trade and commerce as nearly as practicable in the form known as the New York standard as now or may be hereafter constituted, except as follows." Comp. St. 1929, sec. 44-601. The proper construction of this insurance code was determined by this tribunal in the case of State v. Howard, 96 Neb. 278, 147 N.W. 689. In that opinion it was expressly determined that "that portion of the section referred to which provides that the New York form shall be used as it 'may be hereafter constituted' is invalid;" but "that it was the intention of the legislature that the New York form should be adopted as the basis of the insurance contract, and that the words 'as nearly as practicable' should be construed to mean 'as nearly as practicable' considering all other provisions contained in the insurance code which are inconsistent with or modify the provisions of the New York standard form."

In this connection it is also to be noted that on this subject, and with special reference to section 44-601, Comp. St. 1929 this insurance code expressly provides: "A policy issued in violation of this article shall be held valid, but shall be construed as provided herein, and when any provision in such a policy is in conflict with any provision hereof, the...