Springfield Fire & Marine Ins. Co. v. Snowden

• Decision Date: 02 February 1917
• Citation: 173 Ky. 664,191 S.W. 439
• Parties: SPRINGFIELD FIRE & MARINE INS. CO. v. SNOWDEN.
• Court: Kentucky Court of Appeals

191 S.W. 439

173 Ky. 664

SPRINGFIELD FIRE & MARINE INS. CO. v. SNOWDEN.

Court of Appeals of Kentucky.

February 2, 1917

Appeal from Circuit Court, Jessamine County.

Action by S. N. Snowden against the Springfield Fire & Marine Insurance Company. From judgment for plaintiff, defendant appeals. Affirmed.

Gordon & Laurent, of Louisville, John H. Welsh, of Nicholasville and F. M. Drake, of Louisville, for appellant.

N. L Bronaugh, and Bronaugh & Bronaugh, both of Nicholasville, for appellee.

HURT J.

The appellee, S. N. Snowden, is a farmer and resides about four miles from Nicholasville, and previous to the 6th day of March, 1915, had carried insurance against fire, upon his property, in the Boston Insurance Company and the Henry Clay Fire Insurance Company. The first-named company ceased to do business in the community in which appellee lived, but he then had a policy of insurance upon his property in the latter company, which insured his dwelling house against fire in the sum of $1,500, and his household and kitchen furniture against fire in the sum of $500. He desired insurance to take the place of that which he had lost when the Boston Insurance Company withdrew and ceased to do business in the community. He went to the office of an agent of appellant, who was a bank cashier in Nicholasville, and stated to him that a company which had been insuring his property against loss or damage from fire had ceased to do business in the territory and that he wanted to secure some insurance, in place of that which he had carried in the retiring company, and wanted to negotiate with the agent, looking to the making of a contract with the company which he represented to insure his property against fire. The agent signified his readiness to negotiate with him, and when the rates were mentioned, the appellee said that he desired to confer with the agent of another company in the town, with reference to the rates, and the agent said to him that he would find all the rates to be the same. The appellee, however, went out of the office for a little while, and when he returned he announced to the agent that he would contract with him. The agent then inquired of him upon what property he desired the insurance and about what amount represented three-fourths the value of the property, and the appellee gave the information desired. The agent then said to appellee that he would write the policy, and that it would be there in the bank for him: "Well, the policy will be issued and in force from to-day." The appellee paid the premium and went away. The agent, having some other matter in hand, did not at once prepare the policy, but during that day prepared the policy and put it in the vault of the bank for appellee. The insurance agreed upon, and for which the policy was made out, was $2,500 upon appellee's dwelling, $450 upon his household and kitchen furniture and other personal property in the dwelling, $150 upon a smoke house, and $50 upon a buggy house. The foregoing seems to have been the entire contract as agreed upon by the agent and appellee. The agent did not make any inquiries as to the title to the property, the incumbrances thereon, or whether there was then any other insurance upon the property, and the insured made no representations in regard to it, in one way or the other, except as to what, in his opinion, amounted to three-fourths of the value of it. He made no concealments of any kind in regard to it. The agent testifies, but does not state whether or not he had any knowledge of the fact, that there was other insurance upon the property at the time, but the inference from what he says is to the effect that he did not have such knowledge. The policy remained in the bank for 38 days, or until after the property was destroyed by fire, when it was given to appellee, and he was also informed that the appellant would not pay the loss, or any part of it, because of the existence of the following clause in the printed portion of the policy, and upon the second page of it:

"This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void, if the insured now has or shall hereafter make or procure any other contract of insurance, whether valid or not, on the property covered, in whole or in part, by this policy."

The insured instituted an action upon the policy to recover of appellant its ratable portion of the damages, and, in defense of the action, the appellant relied upon the foregoing stipulation as avoiding any recovery. The appellee contended that the stipulation was not a part of the contract, which he had entered into with the appellant for the insurance, and asked that the policy be reformed so as to conform to the contract, which he had made, and for a recovery against appellant for its ratable portion of the damages. The action was tried by the court, without the intervention of a jury, and a judgment was rendered by which the stipulation in question was eliminated from the policy, and a recovery adjudged in favor of appellee, and from the judgment the appellant has appealed.

That prior insurance was carried upon the property by the Henry Clay Fire Insurance Company, and that it was, in effect, at the time appellant made the contract of insurance sued on, and that appellee did not inform the appellant's agent of that fact is admitted. That the application for the insurance was by parol, and that appellant's agent made no inquiries of appellee with reference to any existing insurance upon the property, and that he did not make any statements in reference thereto is also admitted. It is not contended that the agent had any knowledge of the existence of the prior insurance. It does not appear that appellee knew that such a fact was one material to the risk, and it is not contended that he fraudulently made any concealment of any kind. It is proven, conclusively, that appellee had no knowledge of the fact that such stipulation was in the policy until after his property was burned. It is also admitted that, so far as the negotiations between the agent and appellee went, the stipulation was not agreed upon as a part of the contract. It is also admitted that the agent did not inform appellee that any such stipulation was to be in the policy, and he never saw the policy until after the loss. The amount of the recovery, if appellant is at all liable, is not complained of, and hence the only thing to be determined is whether the policy is void and unenforceable because of the stipulation in it with reference to the prior insurance, and that it was not agreed in writing that appellee might have insurance upon the property other than that provided for in the policy sued on.

In cases of Manhattan Insr. Co. v. Stein, etc., 68 Ky. (5 Bush) 652, and Baer v. Ph nix Insr. Co., 4 Bush, 242; Stevenson v. Ph nix Insr. Co., 83 Ky. 7, 4 Am. St. Rep. 120, and other cases in line with them, are relied upon as holding that such a stipulation in a policy of fire insurance is valid and enforceable, and that a breach of the condition renders a contract of insurance unenforceable. A reference to these cases develops the fact that it was not a matter of controversy in them as to whether the stipulation was a part of the contract, and no such state of facts was presented in either of them as is presented in this case. It was admitted in those cases, so far as the opinions indicate, that the stipulation against any other insurance was a part of the contract. In the instant case, the contract was orally made, but in contemplation, however, that it was to be reduced to writing, and, when so reduced, it, doubtless, should be held that the negotiations were merged in the written instrument.

It is elementary to say that in order to make a contract there must be an agreement. In fact, there cannot be a contract unless all parties to the negotiations mutually assent. There must be an intention common to both, or all, who are bound. This intention must be made known by the words used by them when the assent is given. The intention must be communicated, and what is communicated and assented to is the contract. In other words, there must be a meeting of the minds of the parties in agreement. The things the minds agree upon is the contract. In the instant case, the things about which the minds of the parties met, and the things agreed upon were that the appellant agreed to insure the dwelling of appellee, in consideration of $28 then and there paid to it by appellee, in the sum of $2,500; the contents of the dwelling in the sum of $450, his smoke house in the sum of $150, and his buggy house in the sum of $50, against loss and damage by fire, at any time between the 6th day of March, 1915, and the 6th day of March, 1916. There is no pretense that it was ever considered, much less agreed upon, that, if there was then any other insurance upon the property, or if appellee should thereafter contract for insurance upon it, appellant was released from its obligation to him, unless he first obtained the agreement of appellant that he might hold what insurance he then had upon the property or contract for other insurance. It seems, indeed, that the parties contemplated that their contract for the insurance should be put in writing into a policy, as a memorial of the contract, but it could not be logically held that they agreed that any conditions should be embraced in the writing, other than those agreed upon, when the proof is in no wise conflicting as to the agreement, nor can it be presumed that appellee contemplated that the policy, when prepared by appellant, would contain anything other than the terms of the contract agreed upon. If the policy had been delivered to and accepted by him, with knowledge of the stipulation in...