Planters Fire Insurance Company v. Steele

• Decision Date: 12 July 1915
• Docket Number: 106
• Citation: 178 S.W. 910,119 Ark. 597
• Parties: PLANTERS FIRE INSURANCE COMPANY v. STEELE
• Court: Arkansas Supreme Court

178 S.W. 910

119 Ark. 597

PLANTERS FIRE INSURANCE COMPANY v. STEELE

No. 106

Supreme Court of Arkansas

July 12, 1915

Appeal from Nevada Circuit Court; G. R. Haynie, Judge; reversed.

Reversed and remanded.

J. W. & J. W. House, Jr., for appellants.

1. Instruction No. 7 (quoted in the opinion) is erroneous. It was the duty of the court to construe the contract, and its terms should not have been left to the jury. The five days' vacancy which occurred from the time Taylor moved out until the house was destroyed by fire, is a matter which should have been declared by the court as forfeiting the policy. 62 Ark. 348.

2. The court erred in instructing the jury that if at any time the premises became vacant and thereafter the defendant issued to plaintiff a vacancy permit, the company, by issuing such vacancy permit, waived all former vacancies. This is not the rule. An insurance company can not waive a forfeiture without full knowledge of the facts which constitute the forfeiture and there is nothing in the record to show that the company in this case had knowledge of any vacancy of the property covered by insurance. 65 Ark. 588; 3 Cooley's Briefs on Law of Insurance, 2467.

The record shows that the policy was issued to Steele, who was then occupying the building as a home. A change of possession or occupancy violated the policy, and there is no proof that the company ever knew that the owner had abandoned the premises and surrendered it to a tenant. 67 Ark. 584-589; 72 Ark. 47.

3. A contract of insurance is a personal one, and the language of the policy shows that the company regarded it as such and expected the plaintiff to retain possession of the property. If, therefore, the property became vacant or unoccupied at any time after the issuance of the policy and the date of the loss, without the consent of the defendant, the policy became void, and the court erred in refusing to instruct the jury to that effect. The court also erred in refusing to instruct the jury that if any change occurred in the title, occupation or possession of the property covered by the insurance without the consent of the defendant, it avoided the policy. 69 Ark 295; 62 Ark. 348; 58 N.E. 314; 36 Am. St. Rep. 907; 10 Id. 384; 48 Id. 468; 51 Id. 457; 2 Cooley's Briefs on Ins., 1713 et seq.; Joyce on Ins § 2238; 23 Ind. 180; 94 Ark. 596; 144 N.Y. 199; 69 Ill. 393; 38 N.E. 865; 49 N.E. 471; 75 N.W. 326; 45 S.W. 109; 53 S.W. 297; 100 Me. 481; 69 P. 345.

C. C. Hamby, for appellees.

1. Forfeitures are not favored in law, and, notwithstanding the strong language used in declaring the forfeiture that the policy "shall become null and void," the policy is not void, but voidable, and the party who has the right to declare it void may thereafter treat it as valid, and it will be so. 110 Am. St. Rep. 99; 35 So. 228; 135 Mass. 248; 96 Am. Dec. 83; 34 Am. Rep. 323; 60 L. R. A. 918, 93 N.W. 972.

2. The issuance of the vacancy permit waived all former vacancies. 47 L. R. A. (N. S.) 619; 3 Am. Rep. 82; 7 L. R. A. (N. S.) 629; 80 Am. St. Rep. 307.

3. The courts are uniform in holding that the answer "applicant" in the application, to the question, "Is it occupied by you or tenant?" is not within itself a warranty that the house will always be so occupied.

Occupation, as used in the policy, means that the "use to which the building is put," that is, residence, is not to be changed, rather than that no change of occupants can be had. 111 Am. St. Rep. 70; 70 L. R. A. (N. S.) 621; 6 Am. Rep. 331; 32 Ill. 221.

To render a policy void which provides for a forfeiture upon the property becoming vacant and unoccupied, the insurer must declare the forfeiture; and if it does not exercise this power while the insured is in default, and the premises are again occupied, the right to declare the forfeiture ceases. 108 Ill. 220; 57 Ill.App. 200; 43 N.J.L. 468; 14 N.E. 525; 63 Ind. 238; 28 Am. Rep. 116; 7 L. R. A. (N. S.) 629; 80 Am. St. Rep. 307.

The issuance of the vacancy permit was sufficient to place appellant on notice that a change of tenants would be made. The rule is that a reasonable time is allowed under policies of insurance for a change of tenants, and the court was right in this case in submitting the reasonableness of the time to the jury. Under the evidence it was a question for the jury, and not, as insisted by the appellant, for the court. 52 Am. St. Rep. 377; 34 Am. Rep. 106; 83 N.Y. 133; 23 Am. Rep. 111; 43 N.W. 682.

Appellee having this reasonable time in which to move into the building, which time had not expired, he was, to say the least of it, constructively occupying the premises when the fire occurred.

OPINION

MCCULLOCH, C. J.

This is an action on a fire insurance policy issued by appellant company on a house owned by appellee Steele in Prescott, Arkansas. The policy was issued on November 8, 1912, and covered a period of three years. The fire occurred on July 15, 1914. The application was taken by a soliciting agent and contained a statement that the building was occupied as a private dwelling, and the answers in the application were warranted to be true. The applicant did in fact occupy the premises as a private dwelling house, but thereafter removed from the place and rented it to a tenant. The first tenant moved out and subsequently it was rented to another tenant named Taylor. Taylor vacated the premises in April, 1914, and the house remained vacant for three weeks or a month, when Taylor rented it again from Steele, the owner, and reoccupied it. He remained in the house until July 11, when he again moved out, and it was not again occupied by any one.

The proof shows that Mr. Steele, the assured, intended to move into the house on July 16, and reoccupy it as his dwelling. He was making preparations to move when the fire occurred. There is also testimony to the effect that when Taylor moved out he left a cooking stove and a table, and that the owner claimed the property as compensation for balance of rent which Taylor owed him. After Taylor moved out in April, the assured applied to the company for a vacancy permit, and the permit was issued to him for a period of thirty days from date. There is some controversy in the testimony as to the precise dates when Taylor moved out of the house and moved back into it, and also as to the date of the permit. Mr. Steele, the owner, testified that Taylor moved out in April and moved back in May, and that the permit was dated in April, and that the period of the permit had expired when Taylor moved back into the house. A copy of the permit was introduced in evidence by the company, and showed that it was dated May 8, and was for a period of thirty days. The conflict with respect to those matters is not material, for it is undisputed that the vacancy permit had expired before Taylor moved out of the house the last time. The policy contains a stipulation that "if said building * * * shall become vacant or unoccupied, * * * or any change takes place in the title, occupancy or possession thereof whatever, then and in every such case this contract shall be absolutely null and void." Appellant pleaded, among other defenses, that there was a violation of each of those conditions of the policy.

The case was submitted to a jury, and a verdict was rendered in favor of appellees for the sum of $ 500, the amount of the policy. The sureties on the bond of the company were joined as defendants, and they have appealed, as well as the company itself. A receiver has been appointed for the company and has been substituted here as appellant.

We are of the opinion that according to the undisputed testimony in the case, the verdict was without evidence to support it, and that the judgment for that reason must be reversed. This conclusion rests on two grounds, namely, that the house was unoccupied within the...