The German Insurance Company v. Gray

• Decision Date: 01 January 1890
• Citation: 23 P. 637,43 Kan. 497
• Parties: THE GERMAN INSURANCE COMPANY v. ANDERSON GRAY
• Court: Kansas Supreme Court

23 P. 637

43 Kan. 497

THE GERMAN INSURANCE COMPANY v. ANDERSON GRAY

Supreme Court of Kansas

January 1, 1890

Error from Summer District Court.

THIS was an action for loss by fire upon a policy of insurance executed December 4, 1885, insuring, among other property the following, for the amounts named: Barn and shed, $ 200 hay, in barn, $ 200; grain, in barn and in stack on cultivated premises, $ 1,500; farming implements, $ 300. The fire occurred on May 28, 1886, and the property mentioned which is alleged to be of the total value of $ 2,200, was wholly destroyed by the fire. The plaintiff alleged that the contract of insurance was in full force at the time of the fire, that the property was destroyed without any fault of his, and that he had fully complied with all the requirements and agreements of the contract, but the insurance company refused and still refuses to pay the amount of the loss. He demanded judgment in the sum of $ 2,200, with interest from the time of the fire. The answer alleged, that in the application for insurance by Gray he warranted that all the answers made by him to questions therein propounded were true; that in response to a question in regard to what mortgages and incumbrances were upon the property, he failed to disclose a mortgage for $ 5,749.35, dated March 23, 1885 in favor of John S. Woods; and further, that Gray, after the issuance of the policy, and without the consent of the insurance company, indorsed on the policy, and, in violation of the terms of the policy, incumbered and mortgaged the property insured under the policy as follows: On May 15, 1886, he made and delivered a mortgage to A. Brennaman for $ 3,110, upon the real estate on which the insured buildings stood, and upon 2,000 bushels of wheat in the granary, and about 300 acres of growing wheat; and further, on December 22, 1885, that he made and delivered to the Sumner County Bank a mortgage of $ 700 on some farming implements and other articles covered by the policy. In his reply Gray admitted the existence and the making of the mortgages mentioned in the answer, but alleged that he gave a full statement of all the incumbrances on the property when the application for insurance was made, and also made known to the defendant that the mortgages would mature during the existence of the policy, and that he would be wholly unable to meet the indebtedness or remove the incumbrances, except by making and giving new mortgages, and renewing the incumbrances on the property; and he alleged that it was expressly stipulated and agreed between himself and the insurance company that he should be permitted to incumber his property; and that H. Steinbuschel & Brother, the duly-authorized agents of the company, expressly waived the condition written in the policy against incumbrances, and expressly agreed in behalf of the company that he should have the right, notwithstanding the printed stipulations, to renew and extend the mortgages and incumbrances upon the property or any part thereof. Upon the trial, the jury returned special findings of fact with their general verdict as follows:

"Q. 1. Was there any chattel mortgage on the wheat covered by the insurance policy sued on in this action at the time said insurance policy was issued and delivered to Anderson Gray? A. Yes."

"Q. 5. Did the said plaintiff, at any time after the insurance and delivery to the said Anderson Gray of the insurance policy sued on in this action and before the time plaintiff claims that the property covered by said policy was destroyed by fire, give to any person any chattel mortgage upon any of the property covered by said policy? A. Yes."

"Q. 7. Were there any chattel mortgages upon any of the property covered by the insurance policy sued on in this action at the time said plaintiff claims the said property was destroyed by fire? A. Yes."

"Q. 10. What was the value of each item of property insured at the time plaintiff claims the same was destroyed by fire? A. 2,000 bushels wheat, $ 1,500; six tons hay, $ 18; 2 two-horse Bain wagons, $ 80; 1 piano-box single buggy, $ 100; 1 ten-foot Hodges header, $ 100; 1 Buckeye mower, $ 40; 1 Bradley hay rake, $ 15; 1 corn planter, $ 45; 1 Wier double cultivator, $ 15; 1 press wheat drill, $ 40; 2 one-horse wheat drills, $ 30; 1 wheat fanning mill, $ 30; barn, $ 800; harness, $ 55.

"Q. 11. What interest did the plaintiff have in and to each separate item of said property at the time he claims said property was destroyed? A. Wheat, owner; hay, owner; Bain two-horse wagons, owner; 1 piano-box single buggy, owner; header, owner; 1 mower, owner; 1 hay rake, owner; corn planter, owner; double cultivator, owner; press wheat drill, owner; 2 one-horse wheat drills, owner; fanning mill, owner; barn, owner; harness, owner.

"Q. 12. What was the value of the plaintiff's interest in each item of said property at the time said plaintiff claims the same was destroyed by fire? A. Same as No. 10.

"Q. 13. Did the plaintiff read the written application for insurance which has been offered in evidence in the case before or at the time he signed the same? A. No.

"Q. 14. Could plaintiff at that time read writing and printing well enough to read such written application? A. Yes.

"Q. 15. Did plaintiff have an opportunity to read said written application before or at the time he signed the same? A. Yes.

"Q. 16. Did Anderson Gray, the plaintiff in this action, tell Mr. Steinbuschel, the agent of said defendant, at the time said written application for insurance was being written up, or before that time, of the existence of any mortgages upon any of the property covered by said insurance policy other than the one mentioned in said written application? A. Yes."

"Q. 18. If you answer question 16 in the affirmative, then you may state if said agent of the defendant stated to plaintiff at that time that he would not mention such mortgages in said written application? A. Yes."

"Q. 20. If all the mortgages that were upon the said property or any part thereof so covered by said insurance policy were not mentioned in said written application, state fully why they were not so mentioned, and all the reasons therefor so far as you find that they were known to plaintiff at that time. A. Agent refused to put it in application, saying it was not necessary, because 'I issue my own policies and adjust the losses.'

"Q. 21. Was the plaintiff at any time authorized by said defendant to mortgage or remortgage the said property covered by said insurance policy after the said insurance was issued and delivered to said plaintiff? A. Yes.

"Q. 22. If you answer question No. 21 in the affirmative, you will then please state at what time said authority was given, and by what officer or agent such authority was given, and whether such authority was given orally or in writing. A. First when application was made out; second, when policy was returned by Steinbuschel and brother, district agent. Orally."

"We, the jury impaneled and sworn in the above-entitled case, do upon our oaths find for the plaintiff, and assess the amount of his recovery at $ 2,018, with interest at 7 per cent. from July 28th, 1886."

A motion for a new trial was made and overruled, and the court thereupon entered judgment in accordance with the verdict for $ 2,125.95, with interest thereon from June 4, 1887, at the rate of 70 per cent. per annum. The insurance company brings the case here, alleging error, and asking a reversal of the judgment.

Judgment affirmed.

Geo. W. Barnett, and George & King, for plaintiff in error.

McDonald & Parker, for defendant in error.

JOHNSTON J. All the Justices concurring.

OPINION

JOHNSTON, J.:

The greater part of the testimony taken in the case was with reference to the extent and value of the property destroyed and as to whether or not the fire was the result of the action of the insured. But these questions, as well as all others upon which there was a conflict of evidence, have been determined by the jury in favor of the insured. The insurance company now seeks to escape liability upon the ground that Gray failed to disclose the existence of incumbrances upon the property when he made the application for insurance, and also because he had incumbered the property after the policy was issued without the consent of the company indorsed thereon, and in violation of its provisions. The application for insurance was made on December 2, 1885, to Steinbuschel & Brother, of Wichita, who were agents of the company for that portion of the state in which the property was situated. They wrote the answers to the questions propounded to Gray, and the application contained the statement that the answers made were true. The application mentions only one mortgage, but Gray testifies that he stated his indebtedness and the incumbrances on his property to the agents fully and in detail, telling them that it would be necessary for him to mortgage and remortgage his property in the conduct of his business during the time for which the insurance was contracted. This is disputed, but the jury sustain Gray, and find that the company was fully informed in respect to the existing incumbrances. The policy was not delivered by the agents at the time the application was made, but was sent by them to Gray at Conway Springs, Sumner county, near which place he resided. Soon after it had been so delivered, he discovered that it contained a provision that if the property should thereafter become mortgaged or incumbered, or in case a change should take place in the title, the policy should be null and void. He immediately went to the agent, called his attention to the provision prohibiting the incumbering of his property, and insisted that it must be changed. After...