National Fire Ins. Co. of Hartford, Conn., Inc. v. Cannon & Byers Millinery Co., Inc.

• Decision Date: 19 October 1923
• Citation: 200 Ky. 655,255 S.W. 154
• Parties: NATIONAL FIRE INS. CO. OF HARTFORD, CONN., INC., v. CANNON & BYERS MILLINERY CO., INC.
• Court: Kentucky Court of Appeals

255 S.W. 154

200 Ky. 655

NATIONAL FIRE INS. CO. OF HARTFORD, CONN., INC., v. CANNON & BYERS MILLINERY CO., INC.

Court of Appeals of Kentucky.

October 19, 1923

Appeal from Circuit Court, Jefferson County, Common Pleas Branch Fourth Division.

Suit by the Cannon & Byers Millinery Company, Inc., against the National Fire Insurance Company of Hartford, Conn., Inc. Judgment for plaintiff, and defendant appeals. Affirmed.

William Furlong, of Louisville, for appellant.

Fred Forcht, of Louisville, for appellee.

MOORMAN J.

In July, 1920, the Cannon & Byers Millinery Company owned a wholesale millinery store in Louisville, and carried insurance on its stock of goods in different companies, amounting to $69,000. One policy of insurance of $5,000 was issued by the National Fire Insurance Company. On July 4, 1920, a fire occurred in the store, resulting in the destruction of part of the stock and such damage to the rest of it as rendered it almost valueless. The millinery company employed T. V. Ponder & Co. to represent it in adjusting the loss. The insurance companies employed the Southern Adjustment Bureau, which is in charge of Hugh W. Young, to investigate the cause of the fire and ascertain the extent of the damage. Immediately thereafter Young, as the representative of the insurance companies, including this appellant, entered into an agreement with the millinery company, by which it was agreed that the cause of the fire would be investigated and the extent of the loss ascertained, without regard to the question of liability, and without waiving any rights that either the insured or the insurers might have under the policies. When this agreement was made, Young did not have written authority to represent appellant, but acted on the request of its local agent. Within a day or two, however, the general agent of appellant, by a letter written to the adjustment company, ratified the action of the local agent in employing Young to represent the company to the extent indicated.

After investigations had been made by the parties, proof of loss including an offer of settlement at $3,623.19, was submitted to appellant through Young. Both were rejected, and thereupon this suit was instituted to recover of appellant $4,533.39 with interest from November 26, 1920, which appellee claimed was the loss covered by appellant's policy. The answer put in issue every material averment of the petition, including that as to the making of proof of loss. In a second paragraph it attempted to assert a defense based on a provision in the policy nullifying it if the hazard "be increased by any means in the control or knowledge of the insured." The trial court sustained a demurrer to that paragraph of the answer, of which no complaint is, or in view of the deficiency of its averments could be, made on this appeal. The pleadings therefore present the issues: Was proof of loss furnished to appellant? and what was the loss chargeable to the policy issued by it?

As to the first question, it is conceded that the failure to furnish to the insurer proof of loss, as required by the policy, does not vitiate the policy, but precludes the insured from maintaining an action thereon until proofs have been furnished. The evidence shows that proof of the value of the stock of goods, which, if not destroyed, was, as we have said, so badly damaged as to render it almost valueless, was furnished to appellant through the adjustment bureau; that the total value as furnished amounted to...