Rochester Loan & Banking Co. v. Liberty Ins. Co.

• Decision Date: 04 April 1895
• Citation: 62 N.W. 877,44 Neb. 537
• Parties: ROCHESTER LOAN & BANKING CO. ET AL. v. LIBERTY INS. CO.
• Court: Nebraska Supreme Court

44 Neb. 537

62 N.W. 877

ROCHESTER LOAN & BANKING CO. ET AL.

v.LIBERTY INS. CO.

Supreme Court of Nebraska.

April 4, 1895.

Syllabus by the Court.

1. An insurance contract provided that the policy should be void if the interest of the insured in the premises be other than unconditional and sole ownership, or if the insured premises be or become vacant or unoccupied, and so remain for 10 days; that in case of a fire the insured should furnish the insurer proof of loss. In a suit upon such policy the insurer interposed the defense that the insured did not furnish proof of loss as required by the policy. An affidavit made by the insured, and furnished to the insurer, containing certain statements concerning the fire, set out in the opinion, and held to substantially comply with the provision of the policy requiring the insured to furnish the insurer proofs of loss; (2) that the insurance company, by refusing to pay the loss, and defending the action on the ground that the policy in suit was not in force at the date of the loss, thereby waived the furnishing to it of any proof of loss whatever. Insurance Co. v. Brewster (Neb.) 61 N. W. 746, and cases there cited, followed.

2. A second defense of the insurer was that the insured, at the date of the issuance of the policy, was not the sole and unconditional owner of the insured real estate. Held: (1) That this issue was one of fact, for determination by the jury, and the district court erred in not submitting it to them. (2) If, by a loss, the holder of an interest in property is deprived of the possession, enjoyment, or profit thereof, or a security or lien resting thereon, or other certain benefits growing out of or depending upon such property, he has an insurable interest therein. Insurance Co. v. Hyman, 52 N. W. 401, 34 Neb. 704, followed. (3) It seems that where a policy is issued to one who holds the legal title to real estate, where no inquiries are made as to whether any other person is interested in such property, and no representations are made by the insured, further than that he is the owner of the premises, it is not a defense to the insurance company, in an action on such policy, that the insured, though holding the legal title to the premises, was a mere trustee for an undisclosed beneficiary.

3. The third defense of the insurance company was that the insured property, at the time of the issuing of the policy in suit, was vacant, and at the date of the fire had been vacant and unoccupied for 10 days. The insured admitted the facts of the defense, but pleaded in avoidance thereof that the insurer issued the policy in suit with actual knowledge of the fact that the insured property was then vacant and unoccupied. Held: (1) That the provision in the policy rendering it void in case the insured property was at the date of the policy, or should afterwards become, vacant or unoccupied, was inserted therein for the benefit of the insurer; (2) that the existence of the vacancy at the date of the issuance of the policy did not render the policy in suit void, but voidable, at the election of the insurer; (3) that, as the insurer issued the policy in suit with actual knowledge of the fact that the insured premises were at the time vacant and unoccupied, it is now estopped from alleging such vacancy as a defense to an action on the policy; (4) that the knowledge of the agent of the insurance company that the property insured was vacant at the date of the issuance of the policy in suit was the knowledge of the company.

Error to district court, Douglas county; Keysor, Judge.

Action on a policy of insurance by L. G. Bangs and the Rochester Loan & Banking Company against the Liberty Insurance Company of New York. A verdict was directed for defendant, and plaintiffs bring error. Reversed.James H. Macomber, for plaintiffs in error.

J. Fawcett, for defendant in error.

RAGAN, C.

This action was brought to the district court of Douglas county by L. G. Bangs against the Liberty Insurance Company of the City of New York (hereinafter called the “insurance company”). The action was based on an ordinary fire insurance policy issued by the insurance company to Bangs, on certain real estate situate in the city of Omaha. The Rochester Loan & Banking Company (hereinafter called the “loan company”) was joined as a party plaintiff because the policy provided that the loss, if any, should be payable to it, as mortgagee. At the close of the evidence the jury, in obedience to a peremptory instruction of the district court, returned a verdict in favor of the insurance company; and, to reverse the judgment of dismissal pronounced on such verdict, Bangs and the loan company have prosecuted to this court a petition in error.

1. The policy in suit contained, among other things, the following provisions: That the policy should be void if the interest of the insured in the insured premises be other than unconditional and sole ownership; if the insured premises be or become vacant or unoccupied, and so remain for 10 days. That if a fire occurred the insured, within 60 days, should render a statement to the company, signed and sworn to by the insured, stating the knowledge and belief of the assured as to the time and origin of the fire, etc. One of the defenses interposed by the insurance company to the action was that the insured did not furnish it (the company) “proofs of loss, as required by the terms and conditions of said policy of insurance.” The fire occurred on the 7th day of November, 1891, and on the 1st day of December, 1891, Bangs made and furnished the insurance company an affidavit in words and figures as follows:

“State of Iowa, Carroll County--ss.: I, L. G. Bangs, being duly sworn, depose and say that my house, on lot 3 of Allen's Sub. of lot 5, Ragan's Add. to Omaha, Nebraska, was destroyed by fire on the night of November 7th, 1891; that the causes of the fire are unknown to me; that the damage done to my buildings was about $1,000, and that said building was insured in the Liberty Insurance Company for $900, by policy dated April 28, 1891; that I have made inquiry, and am unable to find anything about the origin of the fire. The policy on said buildings was for $800 on the house and $100 on the barn. L. G. Bangs.

“Subscribed and sworn to,” etc.

We remark: (1) This was a substantial compliance with the terms of the policy requiring Bangs to furnish the insurance company proofs of loss. Insurance Co. v. Gustin, 40 Neb. 828, 59 N. W. 375. (2) That, if Bangs had wholly failed to furnish the insurance company any proofs of loss whatever, such failure, under the circumstances of this case, would afford the insurance company no defense whatever to this action. Here, as we shall presently see, the insurance company refuses to pay the loss, and defends against this action on the ground that the policy in suit was, at the date of the loss of the insured property, not in force. In Insurance Co. v. Bachelder, 32 Neb. 490, 49 N. W. 217, this court, speaking through its present chief justice (Norval), said: “The absolute denial by the insurer of all liability on the ground that the policy was not in force at the time of the loss is a waiver of the preliminary proofs of loss required by the policy.” See, also, Insurance Co. v. Richardson, 40 Neb. 1, 58 N. W. 597. In Insurance Co. v. Dierks (Neb.) 61 N. W. 740, it was held that: “The right of an insurance company to notice of loss is a right which the company may waive; and when the insurer denies all liability for the loss, and refuses to pay the same, and places such denial and refusal upon grounds other than the failure of the insured to give notice of the loss, such denial and refusal avoid the necessity of such notice.” See, also, Id. 745. The precise question was squarely presented and decided in Insurance Co. v. Brewster (Neb.) 61 N. W. 746, where Harrison, J., speaking for this court to the point, said, “Proofs of loss required by a condition of an insurance policy are waived when the insurance company denies any liability for the loss, on the ground that the policy was not in force at the...