Public Fire Ins. Co. v. Crumpton

• Decision Date: 09 May 1933
• Citation: Public Fire Ins. Co. v. Crumpton, 110 Fla. 151, 148 So. 537 (Fla. 1933)
• Parties: PUBLIC FIRE INS. CO. v. CRUMPTON et al.
• Court: Florida Supreme Court

148 So. 537

110 Fla. 151

PUBLIC FIRE INS. CO. v. CRUMPTON et al.

Florida Supreme Court, Division B.

May 9, 1933

Error to Circuit Court, Lee County; George W. Whitehurst, Judge.

Action by Estelle Crumpton and husband against the Public Fire Insurance Company.Judgment for plaintiffs, and defendant brings error.

Reversed and remanded.

COUNSELBatchelor & Rinehart, of Miami, for plaintiff in error.

Henderson & Franklin and E. M. Magaha, all of Fort Myers, for defendants in error.

OPINION

BUFORD Justice.

The writ of error in this case challenges the legality of a judgment in favor of the plaintiffs in the court below defendants in error here, against defendant on a fire insurance policy.The policy contains the following provision: 'This entire policy, unless otherwise provided by agreement endorsed hereon or added hereto, shall be void if the hazard be increased by any means within the control or knowledge of the insured.'The policy was originally issued to W. J. Crumpton, but was afterwards by indorsement made payable to Estelle Crumpton.

The defendant filed several pleas to an amended declaration which were demurred to.The demurrer was sustained and, the defendant declining to plead further, judgment was entered.

Plaintiff in error contends that the sustaining of the demurrer to pleas numbered 2 to 7, inclusive, and to pleas numbered 8 to 10, inclusive, was reversible error.Pleas numbered 2, 3, and 4 fail to allege that the alleged increased hazard obtained at the time of the alleged destruction of the property by fire.Pleas numbered 5, 6, and 7 do allege that the condition by which the hazard was increased existed at and before the time of the fire.Pleas 8, 9, and 10 fail to allege that the condition which is alleged to have increased the hazard obtained at the time of the fire.

It appears that there are two lines of decisions in regard to provisions of insurance policies such as that above quoted.One line of decisions holds that where such a clause is inserted in the policy and the hazard is increased by means within the control or knowledge of the insured without the agreement of the insurer for such change being indorsed thereon, or added thereto, the policy becomes void upon the increase of the hazard and remains void thereafter.The other line of authorities, with which this court is in harmony holds that the effect of such a change in the hazard results in the policy becoming voidable and that the forfeiture clause may be waived by the insurance company.SeePalatine Ins. Co. v. Whitfield,73 Fla. 716, 74 So. 869;Tillis v. Liverpool & L. & G. Ins. Co.,46 Fla. 268, 35 So. 171, 110 Am. St. Rep. 89;Eagle Fire Ins. Co. v. Lewallen,56 Fla. 246, 47 So. 947;Caledonia Ins. Co. v. Smith,65 Fla. 429, 62 So. 595, 47 L. R. A. (N. S.) 619;Jones v. American Eagle Ins. Co.,91 Fla. 565, 108 So. 165.

In Sumter Tobacco Warehouse Co. v. Phoenix Assur. Co., Ltd., of London, reported in 76 S.C. 76, 56 S.E. 654, 655, 10 L. R. A. (N. S.) 736, 121 Am. St. Rep. 941, 11 Ann. Cas. 780, the Supreme Court of South Carolina in an able opinion prepared by Mr. Justice Woods, construing a like provision of an insurance contract, said:

'On this point the authorities are in hopeless conflict.Some courts of high authority hold the policy to be finally avoided by such temporary increase of hazard.Mead v. Ins. Co., 7 N. Y. 530;Wheeler v. Ins. Co.,62 N.H. 326, [Id., 62 N.H. 450,]13 Am. St. Rep. 582;Ins. Co. v. Kyle,24 N.E. 727, 124 Ind. 132, 9L. R. A. 81, 19 Am. St. Rep. 77;Ins. Co. v. Russell,69 P. 345, 65 Kan. 373, 58 L. R. A. 234.The precise point has not been decided by the Supreme Court of the United States, but the case of Kyte v. Ins. Co.,21 N.E. 361, 149 Mass. 116, 3 L. R. A. 508, is cited with approval in Imperial, etc., Ins. Co. v. Coos County,151 U.S. 452, 14 S.Ct. 379, 38 L.Ed. 231.

'The issue in the last-mentioned case, however, was not as to the effect of a temporary change, but of a permanent change due to material alterations of the building without the consent of the insurer.In Liverpool, etc., Ins. Co. v. Gunther,116 U.S. 113, 6 S.Ct. 306, 29 L.Ed. 575, the prohibited hazard was in existence at the time of the fire, and the exact point here under consideration was not involved.The reasoning in Kyte v. Ins. Co., the Massachusetts case just referred to, is that, unless the policy be regarded at an end the moment the hazard is increased, the insurance company would be held to furnish insurance for which it had not received the consideration it was entitled to demand and which with knowledge of the facts it would have demanded.But this reasoning seems fallacious, for the insurer is generally held to be not liable at all if the fire occurs during the continuance of the increased risk and in consequence of it.The contract of insurance must, like other contracts, be enforced, according to its terms.In construing such contracts, however, courts should endeavor to ascertain from the language used in the light of the surrounding circumstances and the nature of the business, the safeguards which the parties intended to place around themselves.It may be reasonable to suppose an insurance company would desire to reserve the valuable right of canceling a policy even on a temporary increase of hazard if known to it at the time, because such change might result in loss, but it is not reasonable to impute to it a purpose or desire to curtail its own revenue by canceling a policy on account of a temporary increase of hazard which has come to an end without loss and from which it could not possibly suffer detriment.Hence there may be ground for holding a temporary increase of hazard forbidden by the policy to avoid the insurance without action or even knowledge on the part of the company when the loss resulted from that cause, but there is no ground for such an inference when the increase of hazard came to an end without loss.The greater weight of authority supports this conclusion.Ins. Co. v. Wetmore,32 Ill. 221;National Fire Ins. Co. v. Catlin,45 N.E. 255, 163 Ill. 256, 35 L. R. A.595;Born v. Ins. Co.,80 Am. St. Rep. 300, 110 Iowa, 379, 81 N.W. 676, and note;Ins. Co. v. Lawrence,81 Am. Dec. 521, 4 Ky.[Metc.] 9;Ins. Co. v. Kimberly, 6 Am. Rep. 325, 34 Md. 224;Angier v. Ins. Co. , 71 N.W. 761, 66 Am. St. Rep. 685, and note;Doud v. Ins. Co.,141 Pa. 47, 21 A. 505, 23 Am. St. Rep. 263;Adair v. Ins. Co., 45 L. R. A. 204, 107 Ga. 297, 33 S.E. 78, 73 Am. St. Rep. 122;Ins. Co. v. Wade,58 L. R. A. 714, 95 Tex. 598, 68 S.W. 977, 93 Am. St. Rep. 870;Ins. Co. v. Union Stock Yards Co. , 87 S.W. 285, 27 Ky. Law Rep. 852;Ins. Co. v. McLimans,45 N.W. 171, 28 Neb. 846;Gates v. Ins. Co.,55 Am. Dec. 360, 5 N.Y. 469.'

We see no reason to add a great deal to what has been said in the South Carolina case.

Another case much in point is that of Northern Insurance Co. v. Morris by the Ohio Court of Appeals reported in 30 Ohio App. 458, 165 N.E. 506, 509, in which case the court said: 'The purpose of the provision defeating recovery because of increased hazard is because the increased peril may cause the fire, and, if the loss ensues from a cause foreign to an increase of hazard, then there is no causal connection between the hazard and the fire, and there can be no failure of recovery by the assured, unless it be upon the theory that the increased hazard, having once begun, in law has never ended, and this does not seem to be the rule in Ohio.'In support of this enunciation that case cites the case of Ohio Farmers Ins. Co. v. Burget,65 Ohio St. 119, 61 N.E. 712, 55 L. R. A. 825, 87 Am. St. Rep. 596.It is pointed out that this rule has been followed in Connecticut, Georgia, Illinois, Iowa, Indiana, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Mississippi, Nebraska, New Jersey, New York, Pennsylvania, and Vermont.The...