National Union Fire Ins. Co. v. Morgan

• Decision Date: 23 January 1936
• Docket Number: 6 Div. 816
• Citation: 166 So. 24,231 Ala. 640
• Parties: NATIONAL UNION FIRE INS. CO. v. MORGAN.
• Court: Alabama Supreme Court

166 So. 24

231 Ala. 640

NATIONAL UNION FIRE INS. CO. v. MORGAN.

6 Div. 816

Supreme Court of Alabama

January 23, 1936

Rehearing Denied March 5, 1936

Appeal from Circuit Court, Jefferson County; J. Edgar Bowron, Judge.

Action on a policy of fire insurance by Mrs. C.E. Morgan against the National Union Fire Insurance Company. From a judgment for plaintiff, defendant appeals.

Reversed and remanded.

In action on fire policy, refusal to exclude insured's testimony that she told insurer's agent that she would have to pay premium in small monthly payments held not error, where insurer failed to object to question.

Replication 4 sets out the same facts with respect to plaintiff's interest in or title to the property as set forth in replication 1, and avers that, with full knowledge of the true condition of plaintiff's possession, ownership, and title to the property described in the policy of insurance defendant issued its draft in payment of the loss, delivered same to its agents, Rogers & Co., which said agents on December 28, 1933, wrote plaintiff a letter advising her that they had received a check from the defendant in payment of the claim and suggesting that plaintiff call promptly at their office. Upon this status, the replication asserts that defendant is estopped to deny liability.

Replication 5 is the same as No. 4, except that it pleads a waiver instead of an estoppel.

Rejoinder 4 sets up the provisions of the policy that no waiver of the provisions thereof shall be effective unless in writing and indorsed on the policy, and avers that the waiver asserted in replications 1, 4, and 5 was not in writing and was not attached to the policy; that, upon issuance, the policy was delivered to plaintiff, who accepted the same and made no protest or objection to any of its terms, nor made any statement that it did not express the true intention of the parties; that defendant relied upon said facts and accepted the premiums; and therefore plaintiff is estopped now to say the policy does not express the true agreement of the parties.

Rejoinder 5 avers that, after the fire and before the matters alleged in the replications, the parties entered into a nonwaiver agreement to preserve the status pending investigation, and that plaintiff cannot therefore take advantage of the matters and things alleged in replications 2, 3, 4, and 5.

Rejoinder 6 is the same as No. 5, except it avers said nonwaiver agreement was entered into "as a part of the transaction after the fire."

Rejoinder 7 avers that, after the occurrence of the matters and things after the fire alleged in the replications, the parties entered into said nonwaiver agreement. Rejoinder 8 sets up the same facts as rejoinder 4 and avers the nonwaiver agreement was entered into before the issuance of the draft alleged in replications 4 and 5.

Rejoinder 9 avers that attached to the policy in suit was a mortgage clause payable to North Birmingham American Bank, the mortgagee; that, at the time of the occurrence of the matters and things alleged in the replications, said bank held an alleged mortgage on the insured property; that said agent or servant of defendant at all times alleged in the replications was representing and handling the interests of said bank as said alleged mortgagee, and at the time said facts were alleged, by the replications, to have been disclosed to said agent of defendant, said agent was acting as agent for said bank.

Rejoinder 12 to replication 2 adopts the averments of rejoinder 7. Rejoinder 13 to replication 3 adopts the averments of rejoinder 5. Rejoinder 16 to replications 4 and 5 adopts the averments of rejoinder 4 and avers that, after the fire and before issuance of the draft and at the time defendant first entered into negotiations with plaintiff after the fire for adjustment of the loss, plaintiff and defendant entered into the nonwaiver agreement and therefore that plaintiff cannot take advantage of the matters and things alleged in said replications.

The following charges were refused to defendant:

"B. The court charges you, gentlemen of the jury, that if you believe the evidence in this case a renewal policy is a separate and distinct contract from the original policy issued to the plaintiff."

"11. If you believe the evidence in this case, plaintiff cannot recover for the loss sustained by anyone other than the plaintiff."

"E. The court charges you, gentlemen of the jury, that if you believe the evidence in this case you cannot find a waiver based upon any act or transaction with C.B. Rogers."

"F. The court charges you, gentlemen of the jury, that if you believe the evidence in this case you cannot find a waiver based upon any act or transaction with Mr. Gravlee."

"12. If you believe the evidence in this case plaintiff cannot recover for the loss of the interest of the children of Mrs. C.E. Morgan."

"9. If you believe the evidence in this case, you are not authorized to find a waiver on anything done or said by E.M. Cole."

"5. The court charges you gentlemen that if you believe the evidence in this case, then the plaintiff is not entitled to recover more than one-eighth (1/8) of the insured value of the property at the time of the fire."

"4. If you are reasonably satisfied from the evidence in this case that the plaintiff is entitled to recover, then plaintiff is not entitled to recover more than 75% of her interest in the insured property."

"If you are reasonably satisfied from the evidence in this case that the plaintiff is entitled to recover, then the plaintiff is entitled to recover no more than $140.63 with interest thereon."

"R. If you are reasonably satisfied from all the evidence in this case that the plaintiff truly informed the agent of the defendant who issued the policy at the time of the issuance of the policy of the exact nature of the title and interest owned by her in the insured property, then I charge you that the plaintiff is entitled to recover only 75% of the value of her insurable interest at the time of the fire with interest thereon."

Plaintiff propounded this question to witness, Mrs. C.E. Morgan: "When you were in there, what did you say and what was said to you? Tell the jury about these parties that you saw there behind the counters and in the cages and at the desk there in Rogers & Company's office."

Defendant's objection to this question was overruled, and this ruling is made the basis of assignment 86. The witness answered:

"Well, Mr. McCarty brought me down there and I talked to Mr. Gravlee, I told them about taking them out *** a mortgage out with Mr. McCarty. He told me that I had to make *** have the insurance *** and I had just a little income. Then I told him before it started that I would have to pay a little monthly, on account of the children; I told them all that down there in the office."

Defendant's motion to exclude the foregoing answer, overruled by the court, is made the basis of assignment 87.

Coleman, Spain, Stewart & Davies, of Birmingham, for appellant.

W. Emmett Perry and Caesar B. Powell, both of Birmingham, for appellee.

KNIGHT Justice.

Suit upon a fire insurance policy issued by the appellant to the appellee.

The first, or original, policy was issued by the defendant in January, 1932, and covered a term of one year. The policy sued upon was a renewal of the first, or original, policy, and covered the term commencing on January 11, 1933, and ending on January 11, 1934. The property insured was the residence occupied by the plaintiff and her children, seven in number and all minors, and it was destroyed by fire on September 13, 1933.

In addition to the general issue, the defendant filed four special pleas, each of which brought forward certain provisions of the policy contract, and based its defense upon the breach of the warranties set up in the pleas.

The second plea averred that at the time of the issuance of the policy the interest of the insured in the property "was other than that of unconditional or sole ownership"; the third, that at the time of the fire the interest of the insured in the property was other than that of unconditional and sole owner; the fourth, that the subject of insurance was a building on ground not owned by the insured in fee simple at the time of the issuance of the policy; and the fifth, that the subject of the insurance was a building on ground not owned by the insured in fee simple at the time of the fire.

The policy contract, inter alia, provided that the policy, unless otherwise provided by agreement indorsed thereon or added thereto, "shall be void *** if the interest of the insured be other than unconditional and sole ownership; or if the subject of insurance be a building on ground not owned by the insured in fee simple."

To these special pleas the plaintiff, in addition to a general traverse, filed five replications.

Replication 1 set up an estoppel against the defendant to set up or to assert the defense brought forward in its four special pleas. This replication, in substance, averred that the insured property was owned and occupied by C.E. Morgan plaintiff's husband, at the time of his death, January 28, 1931, as his homestead; that the decedent left surviving him the plaintiff, his widow, and seven minor children; that on June 9, 1931, this property, by a decree of the probate court of Jefferson county, was set aside as a homestead to the plaintiff and the minor children of the decedent; that Rogers & Co. were the agents of the defendant "and acting in the line and scope of their authority and employment as such agents of defendant, they countersigned said policy of insurance and issued it, or procured its issuance to plaintiff; that before or at the time of the issuance of said...