Taylor-Baldwin Co. v. Northwestern Fire & Marine Ins. Co.

• Decision Date: 01 July 1909
• Court: North Dakota Supreme Court

122 N.W. 396

18 N.D. 343

TAYLOR-BALDWIN CO. v. NORTHWESTERN FIRE & MARINE INSURANCE COMPANY

Supreme Court of North Dakota

July 1, 1909

Appeal from District Court, Grand Forks county; Chas. F. Templeton J.

Action by the Taylor-Baldwin Company against the Northwestern Fire & Marine Insurance Company. Judgment for Plaintiff, and defendant appeals.

Reversed.

Judgment reversed and judgment entered dismissing the complaint.

Ball Watson, Young & Hardy, for appellant.

W. S Stambaugh, for respondent.

CARMODY, J. Morgan, C. J., not participating. Chas. A. Pollock, Judge of the Third Judicial District, sitting by request.

OPINION

CARMODY, J.

This action is based upon a fire insurance policy. The case was tried by the court without a jury. The facts are substantially as follows: The plaintiff is a corporation and as such was engaged in the mercantile business at the old town of Garrison, in McLean county, until September 1, 1905, and thereafter at the new town of Garrison, four miles distant therefrom. The defendant is a corporation engaged in fire insurance business. In April, 1905, the plaintiff owned a frame store building and a stock of merchandise contained therein, all situated in the old town of Garrison. On April 17, 1905, the defendant issued its policy of insurance on said property for one year for $ 2,300, to wit, $ 2,000 on the merchandise and $ 300 on the building. The insurance was solicited by D. P. Robinson, who was defendant's local soliciting agent at Coal Harbor. In August and September, 1905, the store building and merchandise were moved to a point four miles distant, to what is called the "new town of Garrison," and the store building and stock were located at that point upon lots 11 and 12, in block 11; the merchandise being in part in the old store building and in part in a new store building adjacent thereto. On November 14, 1905, after its removal to the new town of Garrison, the store building and stock of merchandise were destroyed by fire caused by a defective lighting plant which plaintiff had installed upon the premises, and which was used for lighting the building. The defendant's policy of insurance described the location of the property insured at the old town of Garrison and insured the plaintiff on said property "while located and contained as described herein and not elsewhere." The property in fact was destroyed at the new town of Garrison, four miles distant. The policy contained a provision which rendered it void in case the defendant took out additional insurance, or if illuminating gas or vapor was generated in the building or adjacent thereto for use therein. Gasoline was generated for use in the building at its new location and was the cause of its destruction. The plaintiff also took out additional insurance. No permit therefor was obtained, and no permission was obtained for the use of gasoline. On October 3, 1905, the plaintiff delivered the policy to Robinson for transmittal to the defendant at its home office. It was its purpose to have Robinson request an indorsement to cover the property at its new location; but Robinson understood that the plaintiff desired to have the policy canceled, and that it intended to take out other insurance at a later time. On October 15, 1905, Robinson sent the policy to the defendant at its home office, with a written request that the defendant cancel the same. On October 18, 1905, the defendant complied with such request and canceled the policy and entered a record of its cancellation upon its books, and made out a statement of the return premium, and has since said date had such canceled policy in its possession. Thereafter, and subsequent to the fire, it sent to Robinson the amount of the return premium, and the same was tendered to plaintiff. On January 9, 1906, the plaintiff sent a written proof of loss to the defendant. Said proof of loss contained a statement that at the time of the fire there was additional insurance upon said property in the Home Insurance Company of New York, in the sum of $ 1,500 on the building, and in the sum of $ 3,600 on the stock of merchandise. That in said proof of loss was contained the following statement: "Building and stock moved to lots 11 and 12, block 11, Garrison, McLean county, N.D., and agent of company notified on or about October 3, 1905." And also the following in reference to the fire: "Fire occurred on the 14th day of November, 1905, about the hour of 7 o'clock p. m. Cause of fire defective gasoline lighting plant." Defendant immediately returned said proof of loss with a letter stating that it denied "any liability under the policy, as same was canceled on October 18, 1905, and the fire occurred on November 14, 1905." The plaintiff did not request Robinson to alter the policy so as to cover the property at its new location, and he had no authority to make such alteration. No change in the policy as originally issued was ever made. From the foregoing facts the court concluded as matter of law that the defendant was liable and directed the entry of judgment, from which this appeal was taken.

The only question is: Do the facts herein stated sustain the judgment? Respondent contends that defendant, by returning to plaintiff its proof of loss stating that it denied any liability under the policy, as the same was canceled on October 18, 1905, and the fire occurred on November 14, 1905, waived the following defenses: "First that the insured property was removed to the new town of Garrison, a distance of four miles, and no permit or indorsement upon said policy was obtained from the defendant providing that said policy should cover the risk in the new location. Second, that the fire which destroyed the property was caused by a defective gasoline lighting plant, which plaintiff had installed upon the premises upon which the store building was situated, and which was used by the plaintiff in lighting said building; that the use of such lighting plant was prohibited by the provisions of the policy, and no permission for this use was obtained from the defendant or indorsed on the policy sued on. Third, that the plaintiff had obtained other insurance upon the property, without notice to the defendant and without permission so to do from defendant indorsed upon the policy." And the only defense available to defendant was that the policy had been cancelled before the fire, and says: "It may be conceded that, unless defendant has waived and is estopped to plead the defenses, each of them is a complete defense to an action on the policy." And contends that if an insurance company, with knowledge of all the circumstances attending a loss, undertakes to give specific reasons for denying liability, this will operate as a waiver of, or estop the company to assert, other causes of complaint, and the company cannot, when sued on a policy, set up any additional grounds of defense than those specified. Thus, if a company sets up one ground of forfeiture as a defense to an action on a policy, and denies liability on this ground alone, it thereby waives all other known grounds of forfeiture or breaches of the conditions of the policy, and cites the following cases to sustain its contention: Brink v. Insurance Co., 80 N.Y. 108; Titus v. Insurance Co., 81 N.Y. 410; Kiernan v. Insurance Co., 150 N.Y. 190, 44 N.E. 698; Smith v. Insurance Co., 107 Mich. 270, 65 N.W. 236, 30 L. R. A. 368; Douville v. Insurance Co., 113 Mich. 158, 71 N.W. 517; Western & Atlantic Pipe Lines v. Insurance Co., 145 Pa. 346, 22 A. 665, 27 Am. St. Rep. 703; Geo. Home Ins. Co. v. Allen, 128 Ala. 451, 30 So. 537; Moore v. Insurance Co., 38 Wash. 31, 80 P. 171; McCormick v. Insurance Co., 163 Pa. 184, 29 A. 747; Johnson v. Insurance Co., 1 N.D. 167, 45 N.W. 799.

We think most of these cases are distinguishable from the case at bar. In Brink v. Insurance Co., supra, defendant received the proofs of loss without objection, retained them, examined the insured in respect to them, and refused to pay the loss on the ground of fraud, and so declared to the insured. Thereupon an action was commenced. At the trial the company failed to prove the charge upon which it relied, and then sought to raise the question of the time of filing the proofs of loss. The court held it was estopped from so doing, and used the following language: "They may refuse to pay without specifying any ground, and insist upon any available ground; but if they plant themselves upon a specified defense, and so notify the assured, they should not be permitted to retract after the latter has acted upon their position as announced, and incurred expense in consequence of it. If a company intends to avail itself of the technical objection that the proofs are not filed in time, common fairness requires that it should refuse to receive them on that ground, or at least promptly notify the assured of their determination; otherwise the objection should be regarded as waived."

In Titus v. Insurance Co., supra, there was a mortgage on the premises payable to plaintiff, who, without the knowledge of the insured, procured additional insurance. There was also a small judgment against the insured which was not disclosed in the application. The policy contained a provision that it should be void if foreclosure proceedings should be commenced against the insured property. The policy contained provisions for its renewal. After the policy was issued, and before its renewal, the judgment was paid. The policy contained a provision that the insured should, if required, submit to an examination or examinations under oath by any person appointed by the company, and subscribe to such examinations when reduced to writing. The mortgagee commenced foreclosure proceedings. The court used the following language:...