Security Ins. Co. v. Laird

• Decision Date: 17 April 1913
• Citation: 182 Ala. 121,62 So. 182
• Parties: SECURITY INS. CO. v. LAIRD.
• Court: Alabama Supreme Court

62 So. 182

182 Ala. 121

SECURITY INS. CO. v. LAIRD.

Supreme Court of Alabama

April 17, 1913

Appeal from City Court of Bessemer; J.C.B. Gwin, Judge.

Action by A.H. Laird against the Security Insurance Company. Judgment for plaintiff, and defendant appeals. Reversed and remanded.

Cabanis & Bowie, of Birmingham, for appellant.

Pinkney Scott, of Bessemer, for appellee.

DE GRAFFENRIED, J.

A.H Laird insured his household goods against loss by fire, in the Security Insurance Company. The policy was for a term of three years, commencing on August 13, 1910, at noon, and ending on the 13th day of August, 1913, at noon. The policy was to cover all loss by fire not exceeding $600. The policy among other provisions, contains a clause declaring that the policy, unless otherwise provided by agreement indorsed thereon or added thereto, shall be void, "if the subject of insurance be personal property and be or become incumbered by a chattel mortgage."

The mortgaging of insured personalty to secure a debt is an increase of the risk, and the quoted clause was, of course valid. Lee v. Agricultural Insurance Co., 79 Iowa 379, 44 N.W. 683.

If, subsequent to the issuance of the policy, Laird executed and delivered to a creditor a valid chattel mortgage on the property insured without the consent of the insurance company, then he was not entitled to recover in this suit unless, after the execution and delivery of the chattel mortgage, the insurance company, with knowledge of the existence of the mortgage, in some way, waived the forfeiture.

1. After the delivery by the insurance company of the above policy, the property covered by the policy was destroyed by fire. Shortly thereafter an agent of the company went down to Bessemer, where the fire occurred, to investigate and adjust the loss. While there the adjuster received information that Laird, after the issuance of the policy, had executed and delivered to the Citizens' Bank of that place a chattel mortgage on the insured property to secure an indebtedness to said bank. Laird, however, denied that he had executed said mortgage to the bank and, on the trial of this case, claimed that the mortgage which he had executed to the bank had been changed without his knowledge or consent after he had executed it and that he never executed to the bank a mortgage on the insured property.

The fire occurred on or about May 19, 1911, and on the 26th day of July, 1911--long after the adjuster had left Bessemer--we find that Laird, in a second proof of loss made by him to the company, which was sworn to by Laird, stated that no incumbrance at all existed on the insured property. Laird, it appears, on June 12, 1911, procured from the Citizens' Bank a statement that the bank, at that time, held no claim against the insured property or upon the insurance money; but the president of the bank, who signed this statement testified in effect, when this case was tried, that when the fire occurred the bank held a valid chattel mortgage on the insured property and that the statement was given to Laird to aid him in collecting the money from the insurance company. The second proof of loss, however, referred to the status of the property at the time of...