National Union Fire Ins. Co. v. Provine

• Citation: 114 So. 730,148 Miss. 659
• Decision Date: 28 November 1927
• Docket Number: 26709
• Court: United States State Supreme Court of Mississippi
• Parties: NATIONAL UNION FIRE INS. CO. v. PROVINE. [*]

114 So. 730

148 Miss. 659

NATIONAL UNION FIRE INS. CO. v. PROVINE. ^[*]

No. 26709

Supreme Court of Mississippi

November 28, 1927

(Division B.)

1. APPEAL AND ERROR. In determining propriety of refusal of directed verdict for appellant, evidence must be taken strongly in appellee's favor.

In determining propriety of refusal to direct verdict in favor of appellant, evidence must be taken most strongly in appellee's favor, and every material fact favorable to his case, which evidence tends to prove either directly or by reasonable inference, must be taken as true.

2 INSURANCE. Insured is bound by statement in proof of loss that there was no additional insurance on property.

Insured is bound by statement made in proof of loss that there was no additional insurance on property covered by policy notwithstanding he did not know that proof of loss contained such statement, since it was his duty to read proof of loss and see for himself what it contained.

3 INSURANCE. Insured, taking additional insurance after insurer's mistakenly informing him policy had expired cannot recover after denying additional insurance in proof of loss.

Where insured, after insurer mistakenly informed him that policy had expired, purchased additional insurance and after loss stated to insurer in proof of loss that he had no additional insurance, policy is void in accordance with provision therein forbidding additional insurance without company's consent, since insured, by failing to inform insurer of additional insurance before adjustment and settlement, stood in same attitude as if he had taken such additional insurance with knowledge that policy had not expired.

4 INSURANCE. Breach of additional insurance clouse in fire policy avoids policy, without regard to insured's knowledge.

Breach of additional insurance clause in fire policy will avoid policy, although insured was ignorant of such clause or ignorant, of fact that additional insurance had been taken out by him.

5. INSURANCE Breach of additional insurance clause in policy with respect to residence did not affect validity of policy as to furniture.

Breach by insured of additional insurance clause in policy with respect to residence has no effect on validity of policy as to house hold and kitchen furniture as to which no additional insurance was effected, since policy separately insuring each item constitutes divisible policy, and validity of insurance under one item has no effect on validity of other items.

Division B

APPEAL from circuit court of Calhoun county.

HON. T. E. PEGRAM, Judge.

Action by O. T. Provine against the National Union Fire Insurance Company. Judgment for plaintiff, and defendant appeals. Reversed and judgment rendered.

Reversed in part, and affirmed in part.

J. H. Ford, for appellant.

It is now too well settled for argument that a provision in a fire insurance policy rendering same void if insured then had or should thereafter take any other insurance, whether valid or not, on the property covered by such policy, without the consent of the insurer, is valid and will be literally enforced by the courts. 6 Cooley's Briefs on Insurance, p. 596; Interstate Fire Ins. Co. v. Nelson, 105 Miss. 437, 62 So. 425; Scottish Union & National Ins. Co. v. Warren Gee Lumber Company, 118 Miss. 730, 80 So. 9.

There was not only a duty on appellee's part not to remain silent but to speak and inform appellant of the existence of the policy on this property with the Palmetto Fire Insurance Company. He was called upon in the proof of loss to reveal the existence of that policy but failed to do it. In the face of those facts his statement on the trial that he did not conceal anything from appellant cannot be taken seriously. This is aside from the testimony for the defense that the adjuster asked him the direct question before he proceeded to take proof of loss whether he had any other insurance and that appellee then and there said there was no other insurance on the property. It is just as much fraud in law for one party to remain silent when it is his duty to speak as would be a positive misrepresentation of the facts. 12 R. C. L. 305, et seq.; Jones v. Metzger, 132 Miss. 247, 96 So. 161.

At the time appellee received the letter from appellant to the effect that its policy expired on April 22, 1923, he had that policy in his possession. It showed on its face that it did not expire until April 22, 1925. He was bound to have known that he paid the installment of the premium note that accrued on April 22, 1923, and again on April 22, 1924. He could not just sit down and neglect to examine the policy and rely on the mistaken statement in the letter. "The policy itself had been, for a long time in the assured's possession, and if he did not read the terms thereof he is bound thereby nevertheless. He cannot lay the policy aside and contend that he does not know the provisions in the policy that are contrary to his interests, while claiming his rights under the provisions therein contained that are favorable to him." Holmes Mutual Fire Insurance Co. v. Pittman, 111 Miss. 420, 71 So. 739; Hartford Fire Ins. Co. v. McCain, 106 So. 529. Forgetfulness on appellee's part would not justify him in violating the provisions of the policy by taking out the policy with another Company without appellant's consent. The condition of the policy having been broken, appellee's good or bad faith was immaterial. 26 C. J., p. 260, par. 325; 11 Cooley's Briefs on Insurance, pp. 598, 603, 604 (1838); Interstate Fire Ins. Co. v. Nelson, 105 Miss. 437, 62 So. 425; Sugg v. Hartford Ins. Co., 98 N.C. 143, 3 S.E. 732; Pa. Fire Ins. Co. v. Kittle, 39 Mich. 51; 6 Cooley's Brief on Insurance, p. 598 (1838) (c).

The letter of November 6, 1924, from appellant to appellee could not constitute a waiver of the clause of its policy against additional insurance. It did nothing more than invite correspondence with appellee relative thereto. It merely said "according to our records you have no insurance in the National Union Fire Insurance Company," as such records showed the policy expired on April 22, 1923. If appellee had examined his policy and receipts and had written to appellant calling attention to the mistake, it would have been immediately discovered and corrected. See 26 C. J., pp. 284-285, par. 354.

It is not questioned that the statement contained in this letter that the policy had expired on April 22, 1923, was an "honest mistake of opinion" on the part of the agent who wrote it. It was not such a statement as justified appellant "in believing that he might fail to comply with the provision of the contract and nevertheless recover on the policy in case of loss," for he had the policy in his possession and all he had to do with the least diligence was to refer to it and discover the mistake of appellant. Nowhere does the letter hold out to appellee any idea that, if the policy had not expired or was still in force or if he had any other policy with that company, any of its provisions would be waived. It was held in Scottish Union & National Insurance Company v. Bailey, 114 Miss. 732, 75 So. 593, that the expression of the agent that "anything you and Bailey do will be all right," did not constitute a waiver of the mortgage clause of the policy there under consideration.

There could be no such thing as "additional" insurance under appellant's policy without its consent thereto or without a waiver of that prohibition in its policy. It could not have waived, or been estopped by, some thing of which it had no knowledge whatever.

There is another reason why the peremptory instruction asked for appellant should have been granted. Appellee pleaded that he took the additional insurance with the Palmetto Fire Insurance Company because of the receipt of the letter from appellant dated November 6, 1924, to the effect that the policy sued on had expired on April 22, 1923, and was not then in force and in "the utmost good faith and in dependence on the notice contained in said letter from" appellant. That the statement contained in that letter was an error or mistake was shown even by the evidence for the plaintiff. It cannot be disputed that but for that letter the taking of that additional policy amounted to an absolute forfeiture of appellant's policy as being in violation of its provisions. No other excuse therefor was pleaded or offered. Appellee was bound, therefore, to notify appellant of this additional insurance so taken under mistake of fact and to promptly repudiate same as soon as he discovered the mistake and that appellant's policy had not expired at the time of the fire. He could not claim on this additional policy so taken in good faith through error and by mistake of the facts as he contends, and at the same time recover on appellant's policy which was violated and forfeited by the taking of such additional insurance. By accepting settlement on this additional policy after knowledge that appellant's policy had not expired at the time of the fire he ratified the forfeiture of appellant's policy in the taking of such additional insurance as of the date of the issuance of such additional policy and this rendered appellant's policy void as of and from that date. Sugg v. Hartford Ins. Co., 98 N.C. 143, 3. S.E. 732; Hughes v. Ins. Co. of North America, 40 Neb. 626, 59 N.W. 112; German Ins. Co. v. Emporia Mutual Loan Savings Ass'n, 9 Kan.App. 803, 59 P. 1092; McKelvey v. Ins. Co., 161 Pa. 279, 28 A. 1115; American Ins. Co. v. Crawford, 110 Miss. 493, 70 So. 579; 26 C. J., p. 260, par. 326.

So far as we have been able to find the holdings of the courts are uniform that where additional insurance is forbidden and is taken later through mistake, error, or forgetfulness of the fact, by any...