Queen of Arkansas Insurance Co. v. Taylor

• Decision Date: 19 June 1911
• Parties: QUEEN OF ARKANSAS INSURANCE COMPANY v. TAYLOR
• Court: Arkansas Supreme Court

138 S.W. 990

100 Ark. 9

QUEEN OF ARKANSAS INSURANCE COMPANY v. TAYLOR

Supreme Court of Arkansas

June 19, 1911

Appeal from Ashley Circuit Court; Henry W. Wells, Judge; affirmed.

STATEMENT BY THE COURT.

The plaintiff brought an action against the insurance company and the sureties on its bond upon a policy of insurance issued upon his dwelling house in the sum of seven hundred dollars and its contents in the sum of one hundred dollars, claiming a total destruction of the house and sixty-four dollars value of the contents, and asked judgment for seven hundred and sixty-four dollars, with interest from the twenty-seventh day of August, and a penalty of twelve per cent. with reasonable attorneys' fee to be taxed against the defendant. The company admitted the execution of the bonds with the other defendants as sureties thereon, the issuance of the policy, the destruction of the premises by fire and the sixty-four dollars' worth of contents, but denied liability, because of alleged false warranties made by plaintiff as to his ownership of the property at the time of and in his application for insurance, and because of false statements made as to such ownership and value after the loss occurred.

The defendants Files and Kimball filed separate answers admitting they were sureties on the bonds, and sought to escape liability upon the same ground as alleged by the company. They also moved the court to require the plaintiff to elect upon which of the two bonds executed by the company and themselves he would rely for recovery. The company moved the court for an order requiring plaintiff to file his muniments of title, and also a motion to make the complaint more specific.

Plaintiff filed an amendment to his complaint, describing the subdivision of land upon which the house was situated and exhibiting a copy of the receipt of the receiver of the United States Land Office at Camden showing the payment of fees for homestead entry, and alleged that at the time he made application for insurance he informed the agent of the company of the character and nature of his title, and that said agent was the one who took the application, collected the premium and delivered the policy, and that he inserted in the application the nature of the title claimed by plaintiff which application he alleged was in the possession of the company, and they with full knowledge thereof issued the policy, and waived the conditions and right to insist upon a forfeiture because thereof. He further alleged liability of defendants on either or both bonds. Some other motions and demurrers were filed, upon which the court took no action.

The testimony tended to show that Newsom Taylor, the plaintiff's brother, first homesteaded the lands and erected the improvements thereon, worth about $ 1,200; that afterwards he sold and had cancelled his right to the homestead, and that the plaintiff made his application to enter the lands upon which the improvements were situated on February 5, 1909, paying the fee therefor and receiving the regular receiver's receipt; that afterwards he applied to W. H. Lindsey, agent of the insurance company at Hamburg, for a policy of insurance, at the time asking him if he could get a policy upon property situated upon lands, the title to which had not yet been proved up. Being told by the agent that he thought so, he made application for insurance; the application was written out at the time by said company's agent, he and his brother together answering the questions as asked, and both of them claiming that they told the agent that his title was a homestead entry, and that he exhibited his receipts from the receiver of the land office to the agent at that time, and the agent said he would put it down in the application "homestead entry." The agent does not remember the receipt having been shown him, but said, "My recollection is that he gave the title as a 'homestead entry.' I would have to refer to the application as to that." In reply to the question if he was not informed that it was a homestead entry, upon which plaintiff had not lived for the time required in order to prove up and get a patent, said, "My understanding was that he had not made proof of the land, but I think his object was to claim the house. I don't see what other construction he could have put on it."

"Q. Was your information, which you gathered from Newsom and Surcie at the time, that they had clear title to the homestead entry, or that Surcie would have to prove up in the future? A. No; I had no information to that effect. My understanding was that it had passed from Newsom to Surcie in some way. Newsom spoke of building the house, and it was turned over to Surcie in some way. Q. When you wrote 'homestead entry' on the application, did you understand, and did you mean by this, that the land was Surcie Taylor's free and clear, or that the United States had not yet made him a clear title to it? A. I was unsettled as to that, because when we used the words 'homestead entry' I paid no attention to the answer except to write it down. I cannot be clear as to how it was, only that it had been transferred from Newsom to Surcie. I understood that Surcie had purchased it from Newsom. Q. What do you understand from the answer 'homestead entry'? A. I understand that where a man is on a place, and that the time had not expired for making proof; I cannot understand it any other way; that is the only way I understand 'homestead entry.'"

This application showing "homestead entry" as plaintiff's claim of title was forwarded to the company's home office, and the policy sued on issued and returned through its said agent, Lindsey, and delivered to plaintiff, who paid Lindsey at the time twelve dollars, and gave his note for the balance of the premium, and afterwards paid it to Lindsey, and took up his note.

It is not disputed that the title was described in the application as "homestead entry", although the adjuster testified that he never did know what this meant until it was explained to him by W. H. Lindsey; that he could have ascertained what it meant by making inquiry, and that he was not in fact aware that the insured was not the owner of the land on which the house was situated until he called on him after the fire.

Kimball testified that he was secretary of the company, and that the policy was issued to the plaintiff based on the application which was in its custody and attached to his testimony; that he examined statements in it before issuing the policy, and would not have issued it if he had understood the facts in regard to the ownership of the title of the property at the time as he now understands them; that it was not the policy of the company to take risks and issue policies covering property where the applicant is not the owner of the property to be insured; that he did not learn the insured was not the owner until the adjuster called on him after the fire.

Plaintiff made his proof of loss in time, and stated: "Yes, I said the building was on my land. * * * * * I did not know what other statement to make except that I owned the property without any exceptions. I had told Dr. Lindsey how I owned it, and told him to write it down, and he did put it in the application, and I showed the receipt to Dr. Lindsey, and thought by the company accepting it that it was all right."

The receiver's receipt from the United States Land Office was introduced in testimony. The policy contained the following clauses:

"This entire policy shall be void if the insured has concealed or misrepresented in writing or otherwise any material fact or circumstance or the subject thereof, or if the interest of the insured in the property be not truly stated herein, or in case of any fraud or false swearing by the insured touching any matter relating to this insurance or the subject thereof, whether before or after a loss * * * or if the interest of the insured be other than unconditional and sole ownership, or if the subject of insurance be a building on ground not owned by the insured in fee simple; * * * if an application of survey, plan or description of property be referred to in this policy, it shall be a part of this contract and a warranty by the insured. * * * This policy is made and accepted subject to the foregoing stipulations and conditions."

The court instructed the jury, and a...