New Hampshire Fire Ins. Co. of Manchester v. Boler, 2138

• Decision Date: 06 May 1940
• Docket Number: 2138,2139
• Citation: 102 P.2d 39,55 Wyo. 530
• Parties: NEW HAMPSHIRE FIRE INS. CO. OF MANCHESTER v. BOLER ET AL. CONTINENTAL INS. CO. OF CITY OF NEW YORK v. SAME
• Court: Wyoming Supreme Court

102 P.2d 39

55 Wyo. 530

NEW HAMPSHIRE FIRE INS. CO. OF MANCHESTER v. BOLER ET AL.

CONTINENTAL INS. CO. OF CITY OF NEW YORK v. SAME

Nos. 2138, 2139

Supreme Court of Wyoming

May 6, 1940

ERROR to District Court, Natrona County; HARRY P. ILSLEY, Judge.

Actions by Thomas Boler and another against the New Hampshire Fire Insurance Company of Manchester and against the Continental Insurance Company of the City of New York to recover for a fire loss under fire insurance policies, both issued relative to the same personal property. Judgments for plaintiffs, and defendants bring error.

Reversed and remanded.

For plaintiffs in error, there was a brief and oral argument by R. R. Rose of Casper.

The record shows a violation of the sole ownership clause of the policy, which invalidates the entire contract. 14 R. C. L 1052; Ins. Co. v. Hudson, 11 F.2d 961; Finance Company v. Fireman's Fund Ins. Co., 129 So. 470; Assurance Company v. White, 286 S.W. 804; Liberty Ins. Co. v. Spharler, 290 S.W. 594; Fire Ins. Co. v. Homes, 69 S.W.2d 281; Valenti v Assurance Company (Vt.) 176 A. 413. An agent employed to solicit insurance is unauthorized to bind his principal by waiver, and his knowledge of facts is not imputed to his principal. 4 Dec. Dig. 17; 26 C. J. 289; Hesselberg v Life Ins. Co., 75 F.2d 490; Life Insurance Company v. McCrary, 60 F.2d 355; Casualty Company v. Erion, 57 S.W.2d 1025; Bankers Ins. Company v. Lee (Miss.) 134 So. 836. The burden is on plaintiff to show a waiver. 26 C. J. 518; Lumbermen's Assurance Association v. Rife, 59 L.Ed. 1143; Northern Assurance Association v. Building Association, 46 L.Ed. 213. The case of Kahn v. Trader's is clearly distinguishable from the present case. The burden of proof is on the plaintiff to show the amount and extent of the loss. 26 C. J. 519; Rosinni v. Ins. Co. (Cal.) 188 P. 564; Ins. Company v. Hyman, 16 L. R. A. (N. S.) 77; Howerton v. Ins. Co. (Mo.) 80 S.W. 27; Blank v. Blank (Ore.) 179 P. 257. Where the policy provides that the measure of damages shall not exceed the cost of replacement, evidence as to the market or cash value thereof is incompetent. 26 C. J. 536; Lumber Company v. Ins. Company, 44 N.W. 1055. False swearing invalidates the policy. 14 R. C. L. 1343; 20 A. L. R. 1168--Case Note; Dumas v. Ins. Co., 40 L. R. A. 358; Fire and Marine Ins. Company v. Vaughan, 14 S.E. 754; Life Ins. Company v. Hurni Packing Company, 260 F. 641; Insurance Company v. Modern Laundry, 277 F. 355; Claflin v. Ins. Co., 28 L.Ed. 76. Gambling devices and other illegal property are not insurable. The judgment should be set aside because the business was illegal. Sec. 32-522, R. S. 1931; Kelly v. Ins. Company, 97 Mass. 288; Johnson v. Ins. Co., 127 Mass. 555; Carrigan v. Ins. Co., 38 Am. R. 686; Erb v. Ins. Co., 40 L. R. A. 845; L. R. A. 1917B 254. The judgment of the trial court should be vacated and judgment entered for plaintiffs in error.

For the defendants in error, there was a brief and oral argument by Fred W. Layman and Edward E. Murane of Casper.

Plaintiffs' petition does not state a cause of action. Each partner must be joined in the action. 47 C. J. 961. There may be an implied waiver. 26 C. J. 281. The soliciting agent had authority to waive the provision as to exclusive ownership. 26 C. J. 9. Knowledge of the agent is imputed to the principal. Insurance Company v. DuBois (Colo.) 44 P. 756; Insurance Company v. Harris, 116 P. 143; Ins. Company v. Adams Mer. Co. (Okla.) 245 P. 885; Kahn v. Insurance Company, 4 Wyo. 419. Market values establish the measure of insurer's liability. Insurance Company v. Cathey, 153 S.W. 935. An examination of the authorities cited by plaintiff in error on this branch of the case will show that they are not in point. Defendants in error submitted abundant proof as to their actual loss. There was nothing in the record to show that there was any false swearing as to the amount of loss by defendants in error. It was proven that the liquor was purchased from the state commission. The judgment of the court below should be affirmed.

RINER, Chief Justice. KIMBALL and BLUME, JJ., concur.

OPINION

RINER, Chief Justice.

Proceedings in error brought the record in these cases here to review judgments of the district court of Natrona County. The actions were instituted in that court by Thomas Boler and A. E. Schmitt, as plaintiffs, to recover for a fire loss under two policies of fire insurance, both issued relative to the same personal property. The New Hampshire Fire Insurance Company of Manchester, a corporation, having issued one policy, it was named as defendant in the action brought thereon and The Continental Insurance Company of the City of New York, a corporation, having issued the other policy, it was named as the defendant in the action based upon it.

The pleadings in both cases are substantially the same, except as to the names of the corporate defendants, the amount of insurance involved and the amount of premiums paid. Both policies were issued for one year periods to Thomas Boler as the insured, the other plaintiff, Schmitt, being not named therein. These policies covered only the contents of a building located in the Town of Evansville, Wyoming, and had nothing to do with the insurance of the building, as it was owned by other persons.

The amended petitions alleged the issuance of the policies to Boler, as described above, on or about January 8, 1937, the payments of the premiums, the destruction of the insured property due to fire occurring on or about August 23, 1937, and the submission of proofs of loss by plaintiffs to the defendants, demand upon and refusal by said defendants to pay the loss claimed. By court order the several policies of insurance were attached to and incorporated in the respective amended petitions. Plaintiffs' initial pleadings each alleged also "that at the time said insurance policy was issued said A. E. Schmitt was a silent partner and joint owner of the property thereby insured and said defendant was so informed at the time said policy of insurance was applied for by said plaintiffs."

The answers of the defendants in substance admit the issuance of the policies as aforesaid and payments of premiums; that Schmitt was a partner in the business conducted at the location described in said policies, and that he owned jointly with Boler certain property in the building at the time of issuance of the policies and when the fire occurred; that a small part of the personal property described in the amended petitions was owned by plaintiffs and that some of this property was not owned by either of them. The answers also allege a "Three-fourths Value Clause" attached as riders to the policies, limiting the loss payable under the several policies to "three-fourths of the actual cash value of the property covered," and pleaded the existence of concurrent insurance; they admit that proofs of loss were made, and deny all other allegations of the amended petitions.

The second defense in the answers allege that the property described in the policies was at the time of the fire, and for some time prior thereto, used for an illegal purpose, to-wit, gambling. The third defense in said answers averred that whatever liquors were in the place when the fire occurred were not purchased from the Wyoming Liquor Commission, such purchases being made in violation of law, and that the liquor thus obtained was not covered by the policies. The fourth defense asserted false swearing on the part of the plaintiffs in the proofs of loss, details as to this contention being given.

The plaintiffs' replies were denials of the new matter set out in these answers. The causes were tried in the district court without juries and by stipulation of the parties the actions were consolidated for trial. The district court entered its several judgments therein in favor of the plaintiffs and against each defendant.

For this court but one transcript was prepared and one bill of exceptions submitted. Both causes were argued and submitted together here, and one opinion will suffice at this time to dispose of each of them.

It is contended on behalf of the insurance companies that there was a violation of the "unconditional and sole ownership" clauses contained in the policies involved, they being issued to Thomas Boler only, when as a matter of fact A. E. Schmitt was a partner in the business and was a part owner of the property undertaken to be covered by said insurance, both at the time said insurance was solicited and subsequently until and including the time of the fire. Relative to that matter each policy of insurance contained the following provisions:

"This entire policy shall be void, unless otherwise provided by agreement in writing added hereto, (a) if the interest of the insured be other than unconditional and sole ownership. * * * *

"No one shall have power to waive any provision or condition of this policy except such as by the terms of this policy may be the subject of agreement added hereto, nor shall any such provision or condition be held to be waived unless such waiver shall be in writing added hereto, nor shall any provision or condition of this policy or any forfeiture be held to be waived by any requirement, act or proceeding on the part of this Company relating to appraisal or to any examination herein provided for; nor shall any privilege or permission affecting the insurance hereunder exist or be claimed by the insurance unless granted herein or by rider added hereto."

The position of the defendants in error in this matter is that these requirements of the contracts between the parties were waived by the insurers through the knowledge obtained by the person who solicited the insurance evidenced by said instruments and through the...