People's Fire Ins. Co. v. Goyne

• Decision Date: 11 June 1906
• Citation: 96 S.W. 365
• Parties: PEOPLE'S FIRE INS. CO. v. GOYNE. SAME v. BIRD. SAME v. H. J. FREELAND & BRO.
• Court: Arkansas Supreme Court

96 S.W. 365

PEOPLE'S FIRE INS. CO. v. GOYNE.

SAME v. BIRD.

SAME v. H. J. FREELAND & BRO.

Supreme Court of Arkansas.

June 11, 1906.

Appeal from Circuit Court, Ashley County; Zachariah T. Wood, Judge.

Separate actions by W. R. Goyne, by E. L. Bird, and by H. J. Freeland & Bro. against the People's Fire Insurance Association of Arkansas. From judgments for plaintiffs in each action, defendant appeals. Affirmed.

There was a jury trial in Goyne's Case resulting in verdict and judgment for him against the insurance company in the sum of $1,018.24. Bird's Case and Freeland's Case were tried before the court sitting as a jury, by consent, and resulted in judgment for $1,044.40 and $569, respectively. The insurance company appeals, and this is its statement of facts: These three actions are based upon three policies of insurance issued by the appellant on the 14th day of December, 1903. The applications for the policies were taken by the same agent of appellant, were made by the respective appellees on the same day upon property alleged to be situated in the same town, and the losses claimed to have been sustained were caused by the same fire, which occurred on the 10th day of January, 1904. The facts and principles of law involved are practically the same in each case. Hence counsel have agreed to submit them together.

In Goyne's Case, No. 5,902, the appellant denied liability because, it alleged, the policy was obtained by fraud and misrepresentation and concealment of a material fact on the part of appellee, in this, that in his application for the insurance, which, by the terms and conditions of the policy, formed a part of the contract of insurance, he represented that there was no building nearer to his store building, upon which he desired insurance, than 90 feet, when in fact there was another building less than 10 feet therefrom, thereby largely increasing the risk assumed by appellant without its knowledge or consent, either at the time of issuing the policy or at any time previous to the fire.

In Bird's Case, No. 5,903, the complaint stated that appellee was the owner of lot 3, in block 11, in the town of White, Ashley county, together with a one-story frame building situated thereon and occupied as a store, and that this building and a stock of goods, etc., located and being therein, were insured by appellant. The policy of insurance issued by appellant was filed with and made part of the complaint. In its answer appellant denied that appellee was the owner of said lot and building. It admitted the issuance of the policy upon the building and goods described in the complaint and their loss by fire, but denied liability, because it alleged, said policy was obtained by fraud and misrepresentation and concealment of material facts, in this, that appellee, in his application for the insurance, which was, by the terms and conditions of the policy, a part of the contract of insurance, represented that there was no building nearer to his said store building than 30 feet, when, in fact, there was another building less than 20 feet therefrom, thereby largely increasing the risk assumed by appellant without its knowledge or consent, either at the time of issuing the policy, or at any time previous to the fire; and in this, that appellee was a United States postmaster and kept the post office in said building at the time of making his said application, which fact largely increased the risk, and was concealed from, and unknown by, appellant until after the fire.

In Freeland's Case, No. 5,904, the complaint alleged ownership by appellees of lot 7, in block H, together with household and kitchen furniture contained in said building. The policy was made part of the complaint. In its answer appellant denied that appellees were the owners of said lot and building. It admitted the issuance of the policy, but denied liability because it alleged that it was obtained by fraud and misrepresentation and concealment of material facts by appellees, in this, that in their application for insurance, which by the terms and conditions of the policy, was a part of the contract of insurance, the appellees represented that there was no building within 100 feet of the building to be insured, when in fact there was another building less than 10 feet therefrom, thereby largely increasing the risk assumed without the knowledge or consent of appellant, either at the time of issuing the policy or at any time previous to the fire; and, in this, that in said application appellees represented that the building was occupied as a private boarding house, when in fact it was occupied and used as a public hotel or tavern, by reason of which the risk assumed was largely increased without its knowledge or consent at any time; and in this, that in said application appellees represented that said building was occupied as a private boarding house, when in fact it was also used as a general store for the sale of merchandise, and at that time contained some $1,500 worth of merchandise, and was also used as a barber shop, all under one roof and described in said application as one building, thereby increasing the risk assumed without the knowledge or consent of appellant at any time.

In each case, both in the pleadings and the proof, it was shown and admitted that, as soon as appellant ascertained the facts set out in its answers, it denied its liability, and returned the premiums received by it, which were refused by each of the appellees, and in its answers again tendered them. Goyne's title to the property insured was not put in issue, but Bird's and Freeland & Bro.'s were. The proof showed that neither Bird nor Freeland & Bro. were the owners of the land or lots upon which the insured buildings were located. In Bird's Case the policy insured a building on lot 3, block 11, in the town of White, and certain goods while contained therein. The proof showed that all the land owned by Bird was lot 10, in block E, in the town of White. In Freeland & Bro.'s Case, the policy insured a private dwelling house and contents situate on lot 7, in block H, in the town of White. The proof showed that all the land they owned was an indefinitely described lot 9, in block G, and an indefinitely described lot 8, in block G, in Ashley county, Ark., and that the building thereon was a public hotel or tavern, and not a dwelling house, nor a private boarding house. These facts are not disputed anywhere in the record. In fact, each allegation of each answer in the three cases was clearly proved, and is not disputed, but appellees rely wholly upon the fact that appellant's agent was present, saw the property, examined the deeds, and made out the applications for insurance, and that therefore appellant is bound by his knowledge, or his means for having knowledge. They testified, with perfect uniformity, that this agent was an entire stranger to them, and that they did not read, nor hear read, nor ask to have read, either of the applications, but signed them upon this agent's assurance that they were all right, at the same time admitting that they knew that they could not get the insurance unless they signed the applications. H. J. Freeland said that he could not read nor write, but that his brother, who was his partner, could do both, and that he signed their application. This agent was only authorized to solicit and forward applications for insurance and collect the premiums therefor. He could not issue policies, nor did he make any pretense of being a general agent. The applications exhibited with the answers and introduced as evidence clearly state that the company shall not be held liable for any loss or damage, or for any insurance, until they were received and approved at the home office, in Little Rock, Ark. Appellees also testified that this agent asked them no questions, and that they made no answers, but simply trusted the whole matter to him, and did not even see him make out the applications.

The above and foregoing statement fairly presents the facts. In addition thereto it may be added that it was shown, without dispute that each matter relied upon as avoiding the policy was well known to the agent. In Goyne's Case the agent was shown the building nearest to the house where the property insured was located, was fully informed of the facts, and wrote the application containing the misstatement. The same was true in Bird's Case in regard to the location, and the agent knew Bird was postmaster and kept the post office in his store, and he (the agent) received mail at it; the same facts as to location existed in Freeland's Case, and as to the representation of the building being used as a private boarding house, when in fact it was a hotel; the agent stopped at the house for several days, slept in the best room and on the only feather bed, and knew the facts concerning the character of the house as well as the owner. In regard to the description of the lots in Bird's and Freeland's Cases the property was all either of them owned in the place, was pointed out to the agent, and he was given the deeds to write in the proper description. It seems that this was a new town and a recent plat had been made, and descriptions were uncertain, probably not in conformity to the new plat. The agent wrote all the applications on information given him. No false answers were made to him. None of the insured read over the applications. They signed them without reading them. All had opportunity to read them.

The following clauses in the applications and policies are material to the issues presented: "This application shall be considered a part of the contract for insurance and a warranty by the applicant, and it is further understood and agreed that this association will not be bound by any representations of the applicant, or promise of the agent or solicitor not contained herein; and I further agree that the answers to all questions are my own, or by my express authority. ...