Ned Bardwell v. Commercial Union Assurance Co., Ltd

• Decision Date: 04 January 1933
• Citation: 163 A. 633,105 Vt. 106
• Parties: NED BARDWELL ET AL. v. COMMERCIAL UNION ASSURANCE CO., LTD
• Court: Vermont Supreme Court

163 A. 633

105 Vt. 106

NED BARDWELL ET AL. v. COMMERCIAL UNION ASSURANCE CO., LTD

Supreme Court of Vermont

January 4, 1933

November Term, 1932.

Trial---Findings of Court---Insurance---Condition in Fire Insurance Policy as to "Unconditional and Sole Ownership"---Status of Holder of Naked Legal Title with Respect to Provision as to "Unconditional and Sole Ownership"---Insurance Broker---Effect of Instructions of Insurance Broker To Issue Policy to Certain Person as Representation Respecting Ownership---Effect of Breach of Condition in Policy Respecting Ownership---Estoppel To Claim Breach of Condition by Knowledge of Insurer's Agent or Sub-agents---Principal and Agent---Insurance Broker as Agent of Insured---Status of Finding of Court If Any Evidence Supports It---Witnesses---Effect of Subsequent Correction and Explanation by Witness of Previous Statement---Sufficiency of Evidence To Sustain Finding That Insurance Broker Apprised Insurers' Agents of Facts as to Ownership---Right of Insurance Company To Assert Forfeiture for Breach of Condition as to Ownership within Reasonable Time after Knowledge Thereof---Estoppel by Reason of Failure To Assert Forfeiture after Knowledge of Breach of Condition---Misrepresentation of Insured's Agent as Chargeable to Insured---Representation as to Insured's Financial Worth---Sufficiency of Evidence To Support Finding That Statement of Insurance Broker as to His Understanding as to Insured's Business and Wealth Was Due to Misunderstanding---Fraud---Mere Expressions of Opinion Not Misrepresentations of Fact---Misrepresentation Rendered Immaterial by Action of Insurer with Knowledge of Facts---Assignments---"Informed" as Equivalent to "Re- quested" or "Instructed" under Circumstances of Case---Effect of Incorrect Description of Bank's Status as Assignee of Mortgage, Where Correct Name of Mortgagee Appeared in Mortgage Clause of Policy---New Trial---Surprise.

1. Findings of court cannot be supplemented by making facts shown by exhibits part of findings by reference only.

2. Condition in fire insurance policy as to insured's interest in property insured being that of "unconditional and sole ownership," held to mean that no other person has any interest in property as owner that quality of estate is not limited or affected by any condition, and that interest of insured is completely vested and of such nature that he alone will sustain entire loss if property is destroyed.

3. Provision in fire insurance policy requiring interest of insured to be that of "unconditional and sole ownership," unless waived by insurer, held express condition of validity of policy.

4. Holder of naked legal title to property, without any beneficial use or interest therein, held not sole and unconditional owner thereof, within requirement of fire insurance policy that insured's interest must be that of "unconditional and sole ownership."

5. Direction of insurance broker to issue fire insurance policies in name of person having mere naked legal title held to amount to representation, which, in absence of knowledge either actual or imputed, authorized insurer to assume that insured's title to property was "unconditional and sole ownership" in conformity to provisions of policy.

6. Breach of provision in fire insurance policy requiring interest of insured to be "unconditional and sole ownership," held to bar recovery on policy, unless forfeiture had been waived by insurer.

7. Insurer is estopped from enforcing condition in fire insurance policy that interest of insured must be that of "unconditional and sole ownership," where insurer's agents or sub-agents knew real facts as to ownership at time policy was issued.

8. Insurance agent resident in another state but holding Vermont broker's license, under which he was authorized to negotiate contracts of insurance or place risks only with domestic insurance companies or with authorized resident agencies, held to have acted as insurance broker in placing insurance through local agents in Vermont, making him agent of insured and not of insurers.

9. Fact that insurance broker resident in another state received commission from local agents in Vermont through whom he placed insurance, held not to alter his status as agent of insured.

10. Finding of court must stand if record discloses evidence which upon any rational view supports it.

11. If record plainly shows that answer of witness on cross-examination was explained and corrected in subsequent cross-examination, court should have accepted correction and disregarded original statement.

12. Evidence held to sustain finding that insurance broker communicated to insurer's agents facts as to ownership of insured property and that insurance was to be in name of person other than real owner.

13. Where insurance companies issued fire insurance policies containing provision that interest of assured must be "unconditional and sole ownership," they had right, within reasonable time after acquiring knowledge of facts of ownership being otherwise, to assert forfeiture for breach of such condition.

14. Insurance companies entitled to claim forfeiture for breach of provision in policies requiring interest of assured to be "unconditional and sole ownership," failing to assert forfeiture within reasonable time after knowledge of breach of condition, and thereafter issuing standard mortgagee clause to be attached thereto, and also issuing second group of similar policies to insured, held to have waived condition and to be estopped from asserting forfeiture.

15. Misrepresentation of insured's agent in procuring policy is chargeable to insured.

16. Representations of fact concerning financial worth of insured are material to risk.

17. Finding that erroneous statements of insurance broker as to his understanding of insured's business and wealth was made "through a misunderstanding" on his part, and was not chargeable as misrepresentation of fact either to insured or real owner of premises, held supported by evidence.

18. Mere expressions of opinion or belief are not to be taken as misrepresentations of fact.

19. If erroneous statement by insurance broker of his understanding as to insured's business and wealth be treated as representation of material fact when made, it became immaterial after insurers treated fire insurance policies as in force with full knowledge that person other than insured was real owner of property.

20. Where person borrowing money from bank gave his note therefor, and indorsed to bank negotiable note payable to him, secured by mortgage, and delivered both note and mortgage to bank as collateral security for loan, but without written assignment of mortgage, held that bank thereby became holder of mortgage as assignee.

21. Word "informed" as used in finding that insurance broker informed insurers' agents that bank should be named as mortgagee in fire insurance policies, held equivalent to "requested" or "instructed."

22. Where insurance broker directed insurers' agents that bank's name be added as mortgagee in fire insurance policies, when in fact bank was assignee of mortgage, and both names of mortgagee and assignee appeared as mortgagee in clauses attached to policies, held that insurers were not harmed, directions given being adequate to apprise defendants that property was encumbered, who encumbrancer was, and nature of claim.

23. That rulings of court, within issues made by pleadings and evidence, are different from what party expected, can never furnish basis of petition for new trial.

ACTION OF CONTRACT on insurance policy. Pleas, general issue and special defenses, and replication by plaintiff. Trial by court at the April Term, 1932, Essex County, Sturtevant, J., presiding. Judgment for the plaintiff. The defendant excepted. The opinion states the case. After adjournment of term of Essex county court at which case was heard, defendant filed petition for new trial in Supreme Court. Affirmed. Petition for new trial dismissed.

Judgment affirmed.

Shields & Conant and Thorp & Branch (of Manchester, N.H.), for the defendant.

Searles & Graves, Leon D. Ripley (of Colebrook, N.H.), and Clarence A. Warren (of Boston, Mass.), for the plaintiffs.

Present: POWERS, C. J., SLACK, MOULTON, THOMPSON, and GRAHAM, JJ.

OPINION

GRAHAM

This action is brought on an insurance policy. The plaintiff Bardwell is named as the insured in the policy, and by rider attached the loss is made payable to Farmers & Traders National Bank of Colebrook, N.H., and H. C. Taylor (plaintiffs herein) "as mortgagee as interest may appear." Seven other actions were brought by these plaintiffs on separate insurance policies. The cases were tried together by the court, and, on the findings of fact judgment was rendered for the plaintiffs in each case. The cases are before us on defendants' bill of exceptions, which presents the same questions in each case, and in the discussion of these questions the cases are treated as one. An action by these plaintiffs based upon another policy is now pending in Washington county court, which, by stipulation of the parties, is to abide the result of these cases.

The property named in all the policies was a dance pavilion with restaurant attached, situated at Lemington, Vt., and known as the "Bluebird." The property was totally destroyed by fire on September 17, 1931.

On August 5, 1931, Taylor, a former owner, sold the property to one Mike Husson, but the deed named Ned Bardwell of Lowell Mass., a cousin of Husson's, as grantee. The conveyance was thus made at the direction of Husson and "for business reasons." As part of the purchase price, Taylor received a note for $ 7,500, which was secured by a mortgage on the premises. The note and mortgage were executed by Bardwell,...