Tebeau v. Globe & Rutgers Fire Insurance Company
| Decision Date | 16 July 1917 |
| Citation | 197 S.W. 130,271 Mo. 626 |
| Parties | GEORGE TEBEAU v. GLOBE & RUTGERS FIRE INSURANCE COMPANY, Appellant |
| Court | Missouri Supreme Court |
Appeal from Jackson Circuit Court. -- Hon. Frank G. Johnson, Judge.
Affirmed.
Ed. E Yates and Claude T. Goble for appellant.
(1) The policy was to be void "if the interest of the insured be not truly stated herein." Interest is something different from title or ownership. Gibb v. Ins. Co., 61 N.W. 137. It includes any right or estate in or lien on real estate. Crosby v. Ottman, 85 F. 497, 29 C. C A. 295; Abbott's Law Dictionary -- "Interest." By its plain terms, therefore, the policy required Tebeau to have stated in the policy the true facts with reference to his "interest" in the insured property. (2) By accepting the policy as written Tebeau warranted that his interest was truly stated. Mers v. Ins. Co., 68 Mo 187. The holding of this case is that one who takes insurance must disclose his interest whether inquired about or not. Bradley v. Ins. Co., 90 Mo.App. 392. (3) The policy sued on provides against conditional ownership. This provision is valid. The reason for it is given in Reithmueller v. Fire Assn., 20 Mo.App. 246, and Barnard v. Ins. Co., 27 Mo.App. 33. (4) Even under the policy clause against concealment, the state of interest must be disclosed. 2 Cooley's Briefs on Law of Ins., p. 1204. Concealment is "the withholding of any fact material to the risk which the insured in honesty and good faith ought to communicate." Clark v. Ins. Co., 40 N.H. 333, 77 Am. Dec. 721. Of course it must be intentional. Boggs v. Ins. Co., 30 Mo. 63. Nor is the concealment material unless the disclosure of the matter would have a tendency to influence the insurer in passing on the risk. Boggs Case, 67. "A concealment of facts by an applicant for insurance of a building against fire is not material unless a disclosure of the facts concealed would have induced the insurer to decline the risk or enhance the premium." Boggs v. Ins. Co., 30 Mo. 63. All of the evidence in this case went to prove concealment. Prior to the decree in Tebeau v. Ridge, the risk was written with express warranty that Ridge owned the property in fee; this despite the fact that he held by lease only, with option to purchase. Neither before nor after decree was the company informed of the state of the title. The policy at risk was written in St. Louis. It required the interest of Tebeau to be "unconditional" and to be "truly stated." The company was never informed that the property was the subject of litigation -- that an adverse decision in a law suit would place him in the position of a mere renter and make the property insured of little value. The uncontradicted evidence was that had the company known that it would not have taken the risk. Agents of the company testified that such situation would have made no difference to companies represented by them. This testimony is clearly outside the case for under the Boggs Case, the test is not what others might have done, but what effect would the situation have had on defendant, first, in reference to carrying the risk at all; second, what should be the rate? Would not the rate present a question analogous to peace and war rates in maritime insurance? Moreover, moral hazard is a large element that enters into the business of insurance. See 2 Cooley, Ins. Briefs, 1340: "It is in their relation to the moral hazard that the materiality of statements as to title and interest rests." The decree in equity being subject to review both on the law and facts, Tebeau's ownership, besides not being "truly stated" was not unconditional. A "condition" is defined as being a "situation containing or dependent on a condition or conditions, not absolute; made or granted on certain terms." Century Dictionary.
Hadley, Cooper, Neel & Wright for respondent.
(1) Plaintiff had title in fee simple and within the meaning of the "sole and unconditional" ownership clause, regardless of the outstanding inchoate right of dower of Mrs. Ridge. 2 Clement on Fire Insurance, p. 184, rule 8; p. 176, rule 35; p. 76, rule 58; 2 Cooley, Briefs on the Law of Insurance, 1352; 16 Am. & Eng. Ency. Law, p. 931; 19 Cyc. 698; Ins. Co. v. Bevis, 18 Ind.App. 17; Ins. Co. v. Kloeber, 31 Gratt. (Va.) 749; Ins. Co. v. Spankneble, 52 Ill. 53. (2) The decree of the circuit court in Tebeau v. Ridge, was final and effective, notwithstanding the pendency of the appeal. Rodney v. Gibbs, 184 Mo. 1; Railroad v. Atkinson, 17 Mo.App. 484; Burgess v. Hitt, 21 Mo.App. 313; Ins. Co. v. Hill, 17 Mo.App. 590; Brown v. Curtiss, 155 Mo.App. 376; Bick v. Dixon, 147 Mo.App. 69; Vantine v. Butler, 157 S.W. 588; 2 Cyc. 908. This rule obtains generally and is the law in Missouri. An appeal does not vacate, suspend or in any way affect the operation of a judgment or decree. A supersedeas bond merely stays execution, but there was no supersedeas in the Ridge case. 2 Cyc. 908. (3) The fact of the then pending litigation over plaintiff's title did not constitute a violation of the "sole and unconditional" ownership clause of the policy. 2 Cooley, Briefs on the Law of Insurance, 1369 (a), 1371 (b) and 1332 (d); 2 Clement on Fire Insurance, 152, rules 5 and 7; Morrison v. Ins. Co., 18 Mo. 262; Boulware v. Ins. Co., 77 Mo.App. 639; Leather Co. v. Ins. Co., 131 Mo.App. 701; Gaylord v. Ins. Co., 40 Mo. 13; Weber v. Ins. Co., 35 Mo.App. 521; Lingenfelter v. Ins. Co., 19 Mo.App. 267. 2 Cooley, Law of Fire Insurance, p. 1371, para. (c). A vendee in possession under a contract of purchase and being entitled to specific performance is the sole and unconditional owner within the meaning of this clause. 2 Cooley, Briefs on Law of Insurance, 1376, 1353-54; 2 Clement on Fire Ins., 168, rule 27; 167, rule 26; Lingenfelter v. Phoenix Ins. Co., 19 Mo.App. 267; Insurance Co. v. Cox, 98 P. 552, 20 L. R. A. (N. S.) 782. Though, in the contract of insurance the assured stipulated that the property was "his," or that he was the owner thereof, such contract was not avoided by the fact that he was only a vendee under a contract for the purchase of land, and did not hold the legal title thereto. Ins. & T. Co. v. Lewis, 42 Ga. 587; Gilman v. Ins. Co., 81 Me. 488; Wainer v. Ins. Co., 153 Mass. 335, 11 L. R. A. 598; Ins. Co. v. Fogelman, 35 Mich. 481; Ins. Co. v. Martin, 40 N. J. L. 568; Martin v. Ins. Co., 44 N. J. L. 273; Ins. Co. v. Tyler, 16 Wend. 385; McCulloch v. Norwood, 58 N.Y. 562; Chase v. Ins. Co., 22 Barb. 527, 20 N.Y. 52; Acer v. Ins. Co., 57 Barb. 68; Dohn v. Ins. Co., 5 Lans. 275; Pelton v. Ins. Co., 13 Hun, 23, 77 N.Y. 605; Ins. Co. v. McCulloch, 21 Ohio St. 176. (4) Plaintiff's failure to disclose the fact that the appeal was pending or that the title was in litigation did not constitute the concealment of a material fact. The trial court so found and held as a matter of fact. Boggs v. Insurance Co., 30 Mo. 63. (5) The fact pending litigation was not material, as a matter of law. 2 Cooley, Briefs on the Law of Insurance, 1362, 1332 (D); Morrison v. Ins. Co., 18 Mo. 262; Hill v. Ins. Co., 2 Mich. 476; Boulware v. Ins. Co., 77 Mo.App. 639; Leather Co. v. Ins. Co., 131 Mo.App. 701; Gaylord v. Ins. Co., 40 Mo. 13; Weber v. Ins. Co., 35 Mo.App. 521.
This is a suit upon a policy of fire insurance. Trial was had before the circuit court of Jackson County, without a jury, resulting in a judgment in favor of the plaintiff in the sum of $ 8,400. Thereupon defendant duly perfected an appeal. The important facts may be summarized as follows:
The policy of insurance was issued for one year beginning December 9, 1911. The fire occurred September 22, 1912. The property covered by insurance was the "frame, concrete and brick foundation base-ball stand including bleachers, club-house, ticket-office and fencing," located at Olive and Twentieth Streets, Kansas City, Missouri. The total loss from the fire amounted to $ 20,000, $ 14,000 of which was covered by insurance, including this policy for $ 8,000. Said policy contained the following paragraphs:
Originally the plaintiff leased the land, upon which this ball park and improvements were located, from the owner, Thomas S. Ridge. The lease contract also contained an option of purchase clause, in favor of the plaintiff. Plaintiff owned all of the insured property at the time of the fire and concerning this there is no dispute; but defendant does deny that plaintiff owned the fee simple title to the land, within the meaning of the insurance clause. On this point, the evidence was that in 1909, plaintiff exercised the option of purchase given him by the lease, but that Thomas S. Ridge refused to convey the property. Mr. Ridge's wife did not join in the lease or option contract. Plaintiff then brought suit for specific performance against Ridge, and on April 11, 1910 (which was before this policy was issued) the circuit court of Jackson County found in favor of plaintiff in the suit for specific performance and decreed the title to this land to be in the plaintiff, upon the payment of the purchase price of some $ 68,000. The plaintiff, thereupon, immediately deposited the purchase money in court. Afterwards the plaintiff filed a motion, in that...
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