Olson v. Standard Marine Ins. Co.
| Decision Date | 07 February 1952 |
| Parties | OLSON et al. v. STANDARD MARINE INS. CO., Ltd. et al. Civ. 18398. |
| Court | California Court of Appeals Court of Appeals |
Fulcher & Wynn, Los Angeles (Walter R. Trinkaus, Los Angeles, of counsel), for appellant Standard Marine Ins. Co., Ltd.
Irwin R. Buchalter and Jerry Nemer, Los Angeles, for appellants and respondents Clara Olson and Madalynne Paul.
Spray, Gould & Bowers, Los Angeles, for respondents Hirschfield Ins. Agency, Inc., and Armond J. Hirschfield.
On December 5, 1947, the defendant insurance company issued its 'Jewelry-Fur Floater' insurance policy reciting that it 'Does Insure Mrs. Clara Olson Hereinafter called the Assured, Whose address is 649 Jones Street San Francisco, California * * * to an amount not exceeding eighteen Thousand Seven Hundred Twenty and No/100 Dollars on Jewelry and/or Furs, as per schedule attached, the property of the Assured and members of his or her family of the same domicile, whilst in all situations, against All Risks * * *.' (Italics ours.) Attached to the policy was a schedule which itemized the articles covered and the amount of coverage for each. The policy also contained certain conditions. Those that are material to this proceeding will be referred to hereafter. On February 26, 1948, the defendant insurance company issued extended endorsement No. 1 whereby it insured a Hamilton diamond wrist watch and bracelet in the sum of $4,500. This recited 'Issued to Mrs. Clara Olson' and was attached to the above policy.
On July 12, 1948, certain of the articles listed on the above schedule and on the endorsement were stolen from an apartment in Los Angeles then occupied by Clara Olson's daughter, the plaintiff, Madalynne Paul, who on June 1, 1948 had subleased it from her finance, George Miller. The loss was promptly reported by respondent's agent to the defendant insurance company's agent. On September 1, 1948, the defendant addressed a letter to the plaintiff Olson at her San Francisco address, stating that it 'elects to rescind the * * * contract of insurance from the date said contract was entered into * * * on account of various concealments and misrepresentation made in connection with the issuance of said policy * * *.' Enclosed with the letter as received by the plaintiff Olson was appellant's check in the full amount of the premium theretofore paid by her. On November 10, 1948, plaintiff Olson returned this check to appellant, together with a notice of rejection of its attempted rescission.
Plaintiff Olson, on February 4, 1949, filed this action against the defendant insurance company in the form of two counts with herself as the sole named plaintiff. By the first count she sought declaratory relief by reason of the attempted rescission of the policy, and by the second count the value of the insured articles stolen in the sum of $22,975. Defendant having demurred, and its demurrer having been ordered off calendar, plaintiff Olson filed a first amended complaint. It consisted of only one count and sought the value of the stolen articles in the same amount of $22,975. Appellant demurred thereto and its demurrer was sustained, respondent Olson being given leave to amend and to join new plaintiffs. Plaintiffs Olson and Paul thereupon joined in filing a second amended complaint. This complaint is divided into two counts. The first one is on behalf of plaintiff Olson and the second on behalf of plaintiff Paul. The first count alleges the issuance of the policy and endorsement No. 1 by the defendant insurance company to plaintiff Olson, the fact that no written application was submitted or requested, the loss of most of the scheduled articles by theft, the ownership of five of them by plaintiff Olson, the failure of such defendant to pay their agreed and insured value, as obligated, to-wit: $5,025, and the performance by plaintiff Olson of the contract. The second count adopts by reference all of the allegations of count I, except those referring to plaintiff Olson's five articles. It then alleges that plaintiff Paul is the natural daughter of plaintiff Olson and that they at all times mentioned have resided in the same domicile, that plaintiff Paul owned all of the articles stolen except the five claimed by plaintiff Olson, that their agreed and insured value was $17,945, appellant's failure to pay the same as obligated, and plaintiff Paul's performance of all conditions of the policy. The prayer seeks $5,025 and interest for plaintiff Olson, and $17,945 and interest for respondent Paul. After its demurrer to the last pleading was overruled the defendant insurance company filed its answer thereto. A demurrer to this answer was filed by plaintiffs which was sustained. Defendant insurance company then filed its first amended answer whereby it admitted the issuance of the policy and endorsement No. 1 to plaintiff Olson and denied most of the other allegations. It also set up two affirmative defenses. By the first it alleged the failure of both plaintiffs to file with it or its agents a detailed or any proof of loss as required by the policy. By the second affirmative defense it set forth a paragraph of the policy which declared it would be void if the assured had concealed or misrepresented any material fact or circumstance or committed any fraud touching any matter relating to the insurance or the subject thereof. It then alleged that plaintiffs had been guilty of such concealment and misrepresentations. It also alleged that plaintiffs had used various names, that between 1937 and 1941 each of them had conducted houses of prostitution and had been arrested therefor, that plaintiff Paul had been arrested upon many occasions for prostitution, vagrancy and other offenses, and was known to police departments as an associate of persons suspected of being burglars and bookmakers. It further alleged that the plaintiffs, or one of them, prior to the issuance of the policy in question and in 1947 and 1948, had caused several similar floater polices to be issued by other insurance companies, insuring similar articles under the names of Mrs. C. M. Paul and/or Madalynne Paul, all of which had been cancelled by such companies shortly after their issuance. It further alleged that plaintiffs concealed from it all of the above facts, and the ownership by plaintiff Paul of the articles claimed by her for the purpose of deceiving it. It also alleged that plaintiffs represented that plaintiff Olson was the owner of all the articles scheduled. It then alleged that it had no knowledge of such facts, believed the representations, was so deceived and upon discovery gave the notice of rescission set forth in the complaint.
Plaintiffs thereafter were permitted to file their third amended complaint in which they re-alleged counts I and II of their second amended complaint and added a third and fourth count against defendants Armond J. Hirschfield and the insurance agency corporation bearing his name. In these added counts they alleged that they had employed the new defendants as their agents to obtain the insurance policy in question, that if any false representations or concealments had taken place such were by the new defendants without the knowledge of plaintiffs and that if the defendant insurance company was successful in defeating plaintiffs' recovery under the policy that plaintiffs would then be entitled to recover the amount so lost from the new defendants.
The case went to trial upon the pleadings as above set forth before a court sitting with a jury. Thereafter a verdict was rendered in favor of plaintiff Olson for $5,025 and interest and in favor of plaintiff Paul for $18,150 and interest against defendant insurance company and in favor of the other defendants. From the resulting judgment against it the defendant insurance company has appealed. The plaintiffs have filed a separate appeal from that portion of the judgment in favor of the other defendants but ask that it be considered only if they are unsuccessful in resisting the appeal taken by the defendant insurance company. In view of our determination of the latter appeal no further consideration need be given to the former.
Appellant relies in a considerable measure for a reversal of that portion of the judgment in favor of the respondent Paul on its contention that she was not an insured under the policy and that therefore count II fails to state a cause of action. Appellant argues that the clause 'Does Insure Mrs. Clara Olson Hereinafter called the Assured,' designates the insured and that the sentence 'On Jewelry and/or Furs, as per schedule attached, the property of the Assured and members of his or her family of the same domicile, whilst in all situations, against All Risks, except as hereinafter excluded', designates what property was insured. It reasons therefrom that only respondent Olson was insured and only as to such property in which she had an insurable interest. With this construction of the policy we can not agree. It not only violates the clear import of the language but also is contrary to the well established rules of construction of insurance policies. Appellant would have us hold that only the property owned by a member of respondent Olson's family that is insured is that in which respondent Olson has an insurable interest such as a community property interest in the property of a spouse or an interest in that of a minor child. Such a construction would give little if any effect to the 'family' clause since members of a family own much of such property outright. Furs and jewels of a wife are frequently the result of gifts and therefore not community property. It would result in appellant being absolved from liability on eighty percent of the articles for which it accepted a premium. If we considered these terms of the policy were...
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