Oates v. Continental Ins. Co.

• Decision Date: 11 November 1952
• Docket Number: No. 10417,10417
• Citation: 137 W.Va. 501,72 S.E.2d 886
• Court: West Virginia Supreme Court
• Parties: OATES, v. CONTINENTAL INS. CO.

Page 886

72 S.E.2d 886

137 W.Va. 501

OATES, v. CONTINENTAL INS. CO.

No. 10417.

Supreme Court of Appeals of West Virginia.

Submitted Sept. 16, 1952.

Decided Nov. 11, 1952.

Syllabus by the Court.

1. A jury will not be permitted to base its findings of fact upon conjecture or speculation.

2. Where a policy of fire insurance on a dwelling and the contents thereof, in different amounts, containing a warranty against 'other insurance', was written at a gross premium, a subsequent policy on the contents of the dwelling constitutes 'other insurance' so as to avoid the prior policy in its entirety.

3. A warranty in a fire insurance policy prohibiting 'other insurance' in substantial compliance with the standard form prescribed in Code, 33-4-7, as amended and re-enacted by Section 7, Article 4, Chapter 73, Acts of the Legislature, 1945, and Section 7, Article 4, Chapter 72, Acts of the Legislature, 1949, is valid, and a breach thereof serves to void the policy.

4. Where in an action on a fire insurance policy containing a warranty against 'other insurance', an insured, who is confronted with the defense that in violation of the warranty against 'other insurance', he obtained another fire insurance policy on the insured property, will be held to have ratified the subsequent policy, where the insured has filed proof of loss and instituted an action on that policy, and such subsequent policy constitutes 'other insurance' within the warranty clause of the prior policy.

5. Point 2 of the Syllabus of Woolpert v. Franklin Insurance Co., 42 W.Va. 647, , to the extent that it holds that 'in order to avoid a policy on account of subsequent insurance, against an express condition therein, it must appear that such subsequent insurance is valid, and can be enforced' has impliedly been overruled by Heldreth v. Federal Land Bank of Baltimore, 111 W.Va. 602, 604 .

6. Where two policies of fire insurance are issued by two different insurance agents at different times, each containing a warranty against 'other insurance', which substantially complies with Code, 33-4-7, as amended and re-enacted by Section 7, Article 4, Chapter 73, Acts of the Legislature, 1945, and Section 7, Article 4, Chapter 72, Acts of the Legislature, 1949, and the agent, who issued the prior policy does not know that the warranty against 'other insurance', contained in the prior policy has been breached, cannot be held to have waived the warranty prohibiting 'other insurance.'

7. If at the time a fire insurance policy, renewing an expiring policy, is issued, no written application is required by the agent and none made by the insured, and there is no inquiry of or representation by the insured respecting 'other insurance', and the insurer, or its agent, at or before the delivery of the renewal policy has no notice that the insured has obtained another policy of insurance on the insured property in violation of the warranty prohibiting 'other insurance', contained in the original policy, a like warranty in the renewal policy will, in the absence of a waiver, as provided in the policy, be enforced in an action on the renewal policy.

8. An insured, who has accepted a renewal of a fire insurance policy containing a warranty against 'other insurance', which warranty was contained in the original policy, and who has accepted and ratified a policy of fire insurance on the insured property between the time of the issuance of the original policy and its renewal, without disclosing to the agent issuing the renewal policy the existence of the other policy issued, is barred from recovery on the renewal policy in an action in which the defendant has filed a specification of defense alleging that plaintiff in violation of the warranty prohibiting 'other insurance' contained in the original and renewal policy.

H. R. Athey and H. G. Shores, Keyser, for plaintiff in error.

Steptoe & Johnson, James M. Guiher and Kingsley R. Smith, Clarksburg, for defendant in error.

RILEY, President.

Ruth I. Oates instituted in the Circuit Court of Mineral County this action on a renewal policy of fire insurance, issued by the defendant, Continental Insurance Company, through its insurance agency at Keyser, dated November 12, 1949, covering five thousand dollars on plaintiff's frame dwelling house, located near Fort Ashby, Mineral County, and two thousand dollars on the contents thereof. Plaintiff prosecutes this writ of error to an order of the Circuit Court of Mineral County, which set aside a jury verdict in her favor in the amount of $5,662.26, and granted the defendant, Continental Insurance Company, a new trial.

About April 30, 1949, plaintiff secured a loan from the Family Finance Campany of Cumberland, Maryland. To protect its loan the finance company required that plaintiff take out a fire insurance policy in the amount of one thousand dollars, covering the contents of the dwelling, and containing a mortgage clause in favor of the finance company. A policy was secured from Northwestern National Insurance Company, through its agent at Largent, West Virginia, which named the plaintiff as the insured, and secured the mortgagee under the mortgage clause in the amount of one thousand dollars from loss by fire on the contents of the dwelling. This policy extended for a period of three years. Shortly thereafter, plaintiff paid off the Family Finance Company with money secured from Household Finance Corporation, of Cumberland, Maryland, and, on October 18, 1949, the latter company, not requiring insurance, turned the Northwestern policy over to plaintiff.

At the time the Northwestern policy was delivered to plaintiff, the policy originally issued by Continental was about to expire, and the insurance agency at Keyser, which had sold the policy to plaintiff, advised her of the approaching expiration date, and enclosed a renewal policy for an additional one year, upon which policy this action is based. This renewal policy, like the original policy, insured plaintiff's dwelling in the amount of five thousand dollars and the contents thereof in the amount of two thousand dollars, and contained a mortgage clause in favor of The Farmers and Merchants Bank, Keyser, West Virginia. Mrs. Oates accepted the renewal policy and paid the premium on it.

The Northwestern policy, issued by the insurance agency at Largent, and the original and renewal policies of Continental, issued by the insurance agency at Keyser, contained conditions against other insurance. Neither of the two insurance agencies issuing the policies had any knowledge of any policy written by the other agency.

On February 10, 1950, fire completely destroyed plaintiff's dwelling house and its contents. Thereafter, plaintiff filed proofs of loss on the Continental and Northwestern policies. The claims set forth therein not having been honored, plaintiff instituted in the Circuit Court of Mineral County separate actions on the Continental and Northwestern policies.

In the action instituted against it, each insurance company filed a plea charging incendiarism, and a specification of defense, alleging that plaintiff had other insurance on her property.

Two two actions were consolidated by a court order, and tried together. At the trial plaintiff testified that both policies, the Northwestern and the renewal policy issued by the Continental Insurance Company were in effect at the time of the fire. The consolidated cases having been submitted to a jury, a verdict was rendered in plaintiff's favor in the amount of $5,662.26 against Continental Insurance Company and a verdict of $635.27 against Northwestern National Insurance Company. Thereupon each of the defendants moved the court to set aside the verdict returned against it, and to grant a new trial. By the final order, entered on February 19, 1951, to which this writ of error was awarded, the circuit court made its written opinion a part of the record, which opinion stated that the question whether the fire was caused by incendiarism on plaintiff's part was for jury determination, but the verdicts should be set aside and a new trial awarded on the ground that plaintiff had violated the conditions as to 'other insurance' contained in both policies. By its order the circuit court sustained both motions to set aside the verdicts and awarded a new trial to each defendant; and, further, the order, after reciting that plaintiff made no resistance to the motion of the defendant, Northwestern National Insurance Company, for a new trial, and that plaintiff's counsel 'having stated to the court, since the handing down of the court's written opinion aforesaid, that plaintiff does not desire or intend to prosecute further the action against' the defendant, Northwestern National Insurance Company, ordered that plaintiff's action against that defendant be dismissed with costs to that defendant.

As against the charge of incendiarism the plaintiff sought to establish an alibi. She testified that some time prior to February 8, 1950, she received a telephone call advising her of the illness of her brother who, she claimed, was living in Baltimore. She testified that for the purpose of going from Keyser to Baltimore, she drove north to Bedford, Pennsylvania, left her automobile in a garage there, and took a bus to Baltimore, arriving there about 2:30 in the morning of February 9, 1950. She further testified that she was unable to find her brother in Baltimore and spent the balance of the day of the ninth shopping; that on February 9 she left Baltimore by bus about nine o'clock at night, arriving at Bedford shortly after midnight on February 10; that there she picked up her car at the garage and started to drive south toward Keyser; that, after driving a few miles in the direction of Cumberland, she decided to return to Baltimore and look further for her brother; and that when she arrived at Bedford, she took a bus from that place to Baltimore about five o'clock on the morning of the...