SECURITY INS. OF NEW HAVEN v. Dazey

• Citation: 78 F.2d 537
• Decision Date: 18 September 1935
• Docket Number: No. 5392.,5392.
• Parties: SECURITY INS. CO. OF NEW HAVEN v. DAZEY.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

78 F.2d 537 (1935)

SECURITY INS. CO. OF NEW HAVEN v. DAZEY.

No. 5392.

Circuit Court of Appeals, Seventh Circuit.

July 9, 1935.

Rehearing Denied September 18, 1935.

A. L. Yantis, of Shelbyville, Ill., and Samuel Levin, of Chicago, Ill., for appellant.

Walter T. Gunn, of Danville, Ill., and R. I. Pugh and U. G. Ward, both of Shelbyville, Ill., for appellee.

Before EVANS, FITZHENRY, and ALSCHULER, Circuit Judges.

ALSCHULER, Circuit Judge.

The judgment under review was rendered in an action on a policy of fire insurance issued by appellant to appellee on a dwelling house in Findlay, Ill. The second count of the declaration, which alone was submitted to the jury, charged destruction by fire of the insured dwelling, and the giving to the insurer of prompt written notice of the loss by insured; that the insurer thereupon sent on its adjuster, who began adjustment of the loss, but later stated that the department of the Illinois government having to do with prevention of fires would not then permit the further adjustment, and he did not proceed further to make adjustment; that thereby the insurer waived the policy requirement of submission of proof of loss; and that insured has kept and performed all things in the policy on her part to be performed.

Defendant presented ten special pleas, to all of which demurrers were filed, and sustained as to pleas Nos. 4, 6, 7, 8, and 10. Defendant elected to stand by these pleas, and error is assigned on the sustaining of the demurrers.

Plea No. 4 alleges that, contrary to the terms of the policy, the plaintiff neglected to use all reasonable means to preserve the property at and after the fire. The plea does not state wherein the plaintiff was derelict in this regard — what she failed to do that she should have done, or what she did that she should not have done — and is wholly insufficient.

No. 6 states that plaintiff violated a provision of the policy which specified that it shall be void if the hazard be increased within the control or knowledge of the insured; and that plaintiff permitted divers persons to congregate in the insured building for the purpose of unlawfully gaming therein, and that such persons did, while the policy was in force, so assemble and unlawfully gamble therein, whereby the hazard was increased.

We find nothing in the plea from which it may properly be concluded that the facts alleged increased the hazard over what it was on the date of the policy. Under the plea, a policy containing such a clause would be vitiated if at any time persons played, for any stake, a game of bridge or casino or marbles within the building, although the persons playing might in each case have been the immediate family of the occupant. Nor is it pointed out in what manner the playing of any such games increased the hazard. The plea is entirely too general, and the demurrer was properly sustained.

No. 7 sets up the same provision of the policy as No. 6 respecting the increase of the hazard, and charges that the $7,000 total of insurance on the building which plaintiff held at the time of the loss was, to plaintiff's knowledge, excessively beyond its cash value at the time the policy was issued and at the time of the loss; and that such excessive insurance was an increase in the hazard to the knowledge of plaintiff. For anything to the contrary contained in the plea, the building was insured for the full amount of this $7,000 during the entire period that the policy in question was effective, in which case there was no increase in the hazard since defendant's policy came into force, and this clause of the policy could have had no application. Rossini v. St. Paul Fire & Marine Ins. Co., 182 Cal. 415, 188 P. 564; Brighton v. North River Ins. Co., 106 N. J. Law, 10, 147 A. 481.

No. 8 charges that under the policy the building insured was to be occupied for dwelling purposes only, but that to the knowledge of plaintiff it was used for storage of personal property, whereby the hazard was increased. In most residences portions of it are used for storage of articles of personal property. Closets in dwelling houses are more or less so used, also attics and basements; but ordinarily such use for storage would not even suggest an increase in hazard, nor conflict in any degree with use of the entire building for dwelling purposes. Indeed, this would be quite consistent with, and even necessary for, such use. The plea is deficient in not pointing out facts to indicate that the hazard was greater because of the alleged use, and was greater than when the policy issued.

No. 10 charges that the building was to be occupied for dwelling purposes only; but that it was occupied and used for other purposes. But it does not state what these other purposes were. The plea is wanting in essential allegations.

At the close of the evidence the court withdrew from consideration of the jury pleas Nos. 2, 3, 5, and 9, of which all but No. 9 charge, in differing ways, that the plaintiff caused the building to be burned, or conspired with others to have it burned, for the purpose of defrauding the defendant.

The withdrawal of these pleas followed the striking out of the testimony given on behalf of defendant by one Spicer, who testified that he was frequently at the building to visit there one Alward who resided therein, and that Alward asked him to help burn the building; and that on the afternoon of the night it burned he went with Alward into the attic and saw Alward carry a pop bottle of kerosene and pour it over three bales of shingles there. Up to the time that Spicer testified no evidence whatever had been adduced that tended to connect plaintiff with the firing of the building. Spicer's conversations with Alward were objected to because not in any manner connected with the plaintiff; but upon defendant's promise to make the connection the evidence was received. When, at the close of Spicer's testimony, the defendant rested its case, it was apparent that Spicer had not, directly or indirectly, circumstantially or otherwise, connected the plaintiff with the firing of the building, or with any conspiracy or project to burn it, or conversations relating thereto. The promised connection between Spicer's testimony and the plaintiff had wholly failed to materialize, and in our judgment the court had no alternative but to withdraw these pleas from the jury and to strike his testimony, save only as to what he testified respecting the presence in the building of some kerosene, a matter to be hereinafter considered.

Appellant insists that insured's failure personally to give the company notice of the fire bars her recovery. The day following the fire appellant's agent who had signed and delivered the policy sent the company notice of the loss. As to this appellant contends that the agent's testimony to the effect that he sent such a notice was not the best evidence and was inadmissible. Be this as it may, there was produced in evidence a letter from appellant's manager acknowledging receipt from the agent of notice of claim of loss under the policy. This sufficiently indicates that the agent did send the company notice.

It is contended it does not appear that the agent was acting for the insured in sending the notice; but we believe the fair purport of the record on this subject is that he was acting on behalf of the insured as well as in his capacity as agent of the company. These people had long lived in this small community and were close neighbors. The morning after the fire appellee's brother, at her request, met the agent and talked over the matter of the loss and its adjustment, and from the circumstances we deem it fair to conclude that the notice was given in pursuance of the conversation. No fine line should be or is drawn in such matters. The object of such notice is to enable the company promptly to make such investigation as it may wish. The definite notice it received almost immediately following the fire gave it all the advantage contemplated by notice of the loss; and with these circumstances indicating that the information to the company was given on behalf of all concerned, this contention respecting the notice cannot prevail. Fisher v. Crescent Ins. Co. (C. C.) 33 F. 544; Blunt v. Nat. Fidelity & Casualty Co., 93 Neb. 685, 141 N. W. 1033; Brink v. Hanover Fire Ins. Co., 70 N. Y. 593; Burlington Ins. Co. v. Lowery, 61 Ark. 108, 32 S. W. 383, 54 Am. St. Rep. 196; Massachusetts Protective Ass'n v. Cranford, 137 Miss. 876, 102 So. 171.

It is insisted that the failure of appellee to submit to appellant proofs of loss, as required by the policy, should defeat her recovery. Appellee responds that the conduct of appellant indicated that the proofs of loss would not be required and were waived. The facts whereon the claim of waiver is based were, under proper instructions, submitted to the jury, and we think there was sufficient evidence to support the conclusion thereon, adverse to appellant.

The above-mentioned letter of appellant's manager stated that the matter had been referred to an adjuster, who would give the adjustment attention. It was followed up in a very few days by the appearance of the adjuster at Findlay. The evidence of several witnesses for appellee was that a contractor was engaged in making measurements and figures for computing the loss, and that he, with appellee, met and conferred with the adjuster; and that the contractor stated to the adjuster that the figures were not yet ready, whereupon the adjuster said, in substance, that when the figures were completed he would take them, but that he was not yet ready for them. But it does not appear that the adjuster or anybody else said anything about submitting proofs of loss. The adjuster testified that several times in the conversation he said that appellee must comply with the policy. Just what he had in mind in giving this repeated caution does not appear. If he meant that she must supply proofs of loss, he...