Milwaukee Mechanics Ins. Co. v. Maples

• Decision Date: 13 January 1953
• Docket Number: 8 Div. 12
• Citation: 37 Ala.App. 74,66 So.2d 159
• Parties: MILWAUKEE MECHANICS INS. CO. v. MAPLES.
• Court: Alabama Court of Appeals

Page 159

66 So.2d 159

37 Ala.App. 74

MILWAUKEE MECHANICS INS. CO. v. MAPLES.

8 Div. 12.

Court of Appeals of Alabama.

Jan. 13, 1953.

Rehearing Denied March 3, 1953.

F. W. Davies and Davies & Williams, Birmingham, and Mitchell & Poellnitz, Florence, for appellant.

Bradshaw & Barnett, Elbert B. Haltom and Geo. E. Barnett, Jr., all of Florence, for appellee.

The following charges were refused to defendant '14. If you believe the evidence in this case the policy of insurance sued upon was forfeited by the plaintiff having total outstanding insurance on the insured building at the time of the fire in the amount of $27,000.00

'15. If you believe the evidence in this case there was no waiver of the breach of the policy on account of other and additional insurance on the insured building at the time of the fire, which was not permitted by the policy sued upon.'

'17. If you believe the evidence in this case the policy sued upon was breached by the plaintiff by having total outstanding insurance on the insured building at the time of the fire in the amount of $27,000.00.'

HARWOOD, Judge.

This is an appeal from a verdict and judgment rendered and entered in the plaintiff's favor in a suit on a fire insurance policy.

The complaint contains one count in which it is set forth that the plaintiff claims $622.22 as the pro rata liability of the defendant for fire damage to a building, which the defendant insured to the amount of $4,000 against loss by fire, which building was damaged by fire on June 14, 1949 to the amount of $4,000.

It was averred that the total amount of fire insurance carried on the building was $27,000, and that the policy issued by the defendant limited its liability to its proportionate share of the total amount of insurance on the building.

The complaint also averred that the plaintiff was at the time of the issuance of the policy and at the time of the fire the sole owner of the damaged building; that on March 15, 1949 the plaintiff, for a consideration of $100, had given a 90-day option to William P. Engel to purchase the building for $33,000, said option being silent as to who should bear the loss in event the building was damaged during the option period or before conveyance; that William P. Engel did on May 23, 1949 give to the plaintiff a written notice of his intention to exercise the option, but that at the time of the fire the plaintiff had not executed nor delivered any deed to Engel, nor had she relinquished possession.

It was further averred that prior to the fire the said Engel did assign his interest in the option to Sears, Roebuck and Company, a corporation; that after the fire and before any conveyance by her, the corporation duly asserted to plaintiff its claim to all fire insurance proceeds due under any and all fire insurance policies on the building; that after considerable negotiation between plaintiff and the said corporation the corporation agreed to, and did, sell, transfer, and assign all its rights and interests in the proceeds due under all of said policies in consideration of the plaintiff agreeing to a reduction of $1,000 as the purchase price of the building, and the plaintiff alleges that she brings this suit as owner of the policy and the rights thereunder by virtue of said assignment.

It was further averred that after the agreement between the plaintiff and Sears, Roebuck and Company relative to the fire insurance proceeds, and subsequent to the fire damage to the building she conveyed the building to Sears, Roebuck and Company under the terms of the option, except as modified by the $1,000 reduction agreement, all of which the defendant had notice.

The defendant filed a demurrer to the complaint asserting among other grounds, that the complaint showed that plaintiff suffered no loss; that the risk of loss was upon Sears, Roebuck and Company at the time of the fire; and that Sears, Roebuck and Company not being a named assured, had no interest to assign.

The court overruled defendant's demurrer to the complaint.

The defendant then filed five pleas. Plea 1 was the general issue, and plea 2 was of payment. Pleas 3 and 4 set up the provisions of the policy prohibiting insurance on the building in excess of $21,000, and averred a breach of this provision in that plaintiff had fire insurance totalling $27,000 at the time of the fire.

Plea 5 set up the pro rata clause of the policy and averred that plaintiff should not recover more than the amount of the policy as it bore to the total amount of the insurance of $27,000 carried at the time of the fire.

The plaintiff's demurrers to pleas 1, 2, 3, and 4 were overruled, and as to plea 5 the demurrer was sustained.

The plaintiff filed some sixteen replications. Replication 1 was general. Special replications 2 to 16 inclusive were filed to pleas 3 and 4.

All of the replications sought in varying terms to set up a waiver of the warranty against additional insurance.

Demurrers were filed to all replications and by the court overruled. In brief counsel for appellant argue only the action of the court in overruling the demurrer to replications 10 and 15. We shall therefore set out the substance of these two replications only.

Replication 10 in substance averred that the policy was issued by W. H. Conner, a general agent for defendant, who had issued her policies annually for several years on the building; that it was plaintiff's practice to apportion her fire insurance on said building among five or six agents which fact was well known to defendant's agent; that said agent made it a practice to renew plaintiff's policy annually covering said building, and this was done without advising plaintiff and without inquiring as to other insurance covering said property; that due to failure of defendant's agent to ever make inquiry regarding the total amount of insurance the plaintiff assumed and believed said agent knew the amount of insurance kept in force; that the policy sued upon was a renewal policy and was delivered without inquiring as to other amounts of insurance being written by the other agents, and the limitation as to the amount of permitted insurance was never discussed by said agent with plaintiff nor was the limitation provision ever called to her attention, nor did she have knowledge of the limitation provision until after the fire; and that the agent of defendant well knew that plaintiff reposed confidence in the agent to deliver her a policy of fire insurance which would protect her.

The replication further averred that despite such knowledge and despite the agent's knowledge of plaintiff's annual business practices concerning the writing of insurance covering such property the said agent by oversight or wrongfully inserted the provision in said policy without advising or consulting plaintiff and defendant is estopped to set up the matter contained in the plea.

The averments of replication 15 are substantially the same as those of replication 10, above.

In reply to the replications the defendant filed five rejoinders. Rejoinders 1 and 2 were general rejoinders.

Rejoinders 3, 4, and 5 were special rejoinders filed separately to pleas 2, 3, 4, and 5.

Rejoinder 3 averred that prior to the matters set up in the replications the plaintiff and defendant entered into a nonwaiver agreement, a copy of which was attached and made a part of the rejoinder.

Rejoinder 4 is substantially the same as rejoinder 3.

Rejoinder 5 averred that the alleged offer to pay plaintiff $1,000, set forth in one or more of the replications, was made in an effort to compromise a disputed claim, of which act the plaintiff ought not to take advantage.

Demurrers were sustained as to rejoinders 3 and 5, and overruled as to rejoinders 1, 2, and 4.

The plaintiff then filed three surrejoinders. Surrejoinder 1 was the general denial.

Surrejoinders 2 and 3 were filed as to rejoinder 4.

Surrejoinder 2 averred in substance that prior to the execution of the nonwaiver agreement the defendant's adjuster fraudulently stated to plaintiff that she would get her insurance in a few weeks, and that the companies, including the defendant, would pay her loss; that he could not understand why she had paid Sears, Roebuck and Company $1,000 for she was entitled to all the insurance; that it was customary to sign a nonwaiver agreement before getting the insurance money. It was further averred that all such statements were fraudulently made with a view to misleading plaintiff who was ignorant in matters pertaining to adjustments of fire insurance losses; that said adjuster was skilled in such matters and wilfully led plaintiff into the belief that said agreement was only a formality necessary for her to get the insurance money; that plaintiff, relying on such representations signed the nonwaiver agreement not knowing its legal effect and believing it was only a formality to enable her to get paid.

Surrejoinder 3 averred that subsequent to the nonwaiver agreement and after full investigation of the loss, and with full knowledge that plaintiff had a total insurance of $27,000, defendant's adjuster told plaintiff her loss would be paid within a few weeks; that later defendant's adjuster offered to pay her $1,000 for the loss, stating this was all she was due since she had sold the building in its fire damaged condition for only $1,000 less than she had contracted to sell it for. It was further averred that the defendant never made known it was claiming that the policy was forfeited because of over insurance until after suit was filed, and defendant is estopped to insist on the nonwaiver agreement.

The defendant's demurrer to the surrejoinder being overruled, issue was joined.

The evidence presented in the trial below shows that in 1943 the appellee (plaintiff below) as devisee under her husband's will, became the owner of a brick building in Florence, Alabama.

On March 15, 1949 the appellee gave a 90-day option to William P. Engel, who...