The Rockford Insurance Company v. Winfield

• Decision Date: 08 January 1897
• Docket Number: 8983
• Parties: THE ROCKFORD INSURANCE COMPANY v. M. A. WINFIELD
• Court: Kansas Supreme Court

47 P. 511

57 Kan. 576

THE ROCKFORD INSURANCE COMPANY v. M. A. WINFIELD

No. 8983

Supreme Court of Kansas

January 8, 1897

Decided January, 1897.

Error from Neosho District Court Hon. L. Stillwell, Judge.

REVERSED AND REMANDED.

ON February 19, 1892, M. A. Winfield filed her petition against the Rockford Insurance Company to recover $ 2,000 and interest on a policy of insurance dated December 4, 1891 alleging the loss of the insured property by fire January 23 1892. The property insured in favor of M. A. Winfield was thus described in the policy:

"On her stock of implements, buggies, spring wagons, sewing machines, separators, steam engines, horse power and machine fixtures, baled broom corn, baled hay, grain and seeds of all kinds, and such other merchandise as is usually kept in a grain and implement store and warehouse, her own or held by her in trust, or on commission, or sold but not delivered all contained in the first story of the one and two story stone and brick metal roofed building, situated on lot 1 block 35 New Chicago, now Chanute, Kansas: $ 3500, other concurrent insurance permitted."

The policy was signed by the president and the secretary of the Insurance Company and countersigned at Chanute by J. O Johnston, agent. Johnston was at the same time cashier of the Bank of Chanute and President of the First National Bank of Erie. M. A. Winfield was largely indebted to said banks, and, to secure the claims, certain notes were deposited as collateral; but the Banks relied mainly upon certain warehouse receipts of the following form:

"No. CHANUTE, KAN., November 3, 1891.

Received in warehouse at Chanute, Kansas, from the First National Bank of Erie, Kansas (or the Bank of Chanute, Kansas), five thousand bushels of prime flax seed No. One, subject only to the order hereon of the said bank and the surrender of this receipt. No charges are to be made for the storage of this property, and it is understood that it is absolutely the property of the said bank, to be disposed of at their will and pleasure, and it is only in our possession for storage and safe-keeping. Loss by fire or heating at our risk. M. A. WINFIELD."

These receipts covered nearly all the grain and seeds in the warehouse at the time of the fire, and the indebtedness to the banks was in excess of the value of such grain and seeds.

Charles F. Prange, a dealer in agricultural implements, separators, horse-power and machine fixtures, had for some years past kept his goods in the one-story part of the building, and paid storage thereon to M. A. Winfield, who had insured the property, as in this instance, without mentioning the real ownership. Johnston did not apprise the Insurance Company of the nature of this business, nor did he mention the fact that the banks of which he was an officer substantially owned all the grain and seeds in the warehouse.

On the day the policy was issued Johnston reported it to the Company in the usual manner; and, December 24, remitted to the Company the premiums on this and certain other policies, less his commissions. The risk was declined by the Company, December 21, in a notification to the agent, who was credited with the premium and ordered to cancel the policy without delay; but the envelope was addressed to "Joe Johnston, Agt. Chanute, Kansas," and this misdirection probably led to its detention for a time in the post-office at Chanute, for Johnston had not received it on January 6, 1892, when he started on a trip East; but the letter followed him to New York City, where it was delivered to him by the Chemical National Bank, January 20 or 21. He testified that he opened it hastily with other mail there, and put it into his pocket and forgot it until he was as far as Kansas City on his way back, about the last of January, when he heard of the loss of the property by fire. Soon after his arrival at Chanute, and about February 1, he was called upon by special agents representing the Rockford Company, and two others which had issued policies amounting to $ 2,500 in addition to that held by the Rockford Company. These special agents made partial inquiry as to the loss, and went away; but returned again about two days thereafter and their investigation was resumed. They requested from S. Winfield, the husband and agent of M. A. Winfield, an itemized statement of the property destroyed. He explained to them that all his books of account, weigh-books, etc., had been destroyed by fire and that it was impossible to make an exact statement, especially as to the grain and seeds. They then told him that the Company was not liable for the Prange property, and that they would not consider the loss as to the grain and seeds unless it was eliminated. At length, on or about February 6, Winfield delivered to them a written document, directed to them, containing an itemized statement of the quantity and value of the different kinds of grain, seeds, machinery and property destroyed by the fire; the amount for grain, seeds, etc., being $ 2,721.95, and that for the machinery being $ 2,977.27, or a total of $ 5,699.22. This list, after the direction to the several Companies, was headed by the following words: "Gentlemen, I hereby submit to you the following itemized statement of my loss of property insured by you which occurred by fire January 23, 1892. (Signed) M. A. Winfield." The document was not verified, and there was no certificate of a magistrate or other officer that he verily believed the assured had without fraud sustained loss of the property insured to an amount certified by such magistrate, as required by the terms of the policy; and the foregoing was the only proof of loss made by the assured. On the night of February 6 said special agents wrote a letter of which the following is a copy:

"CHANUTE KAN., February 6, 1891.

"To M. A. Winfield, Chanute, Kan.: You are hereby notified that the statement presented by you through Samuel Winfield (who represents himself to be your attorney in fact) and purporting to show a claim against the companies represented by us is not sufficient and cannot be accepted by us. From it we are unable to ascertain from what source or to what extent in amount your purchases have been, or what the amount of your sales or consignments were at any time during the year 1891, and prior to the date of the alleged fire; you having alleged that everything in the nature of data relating thereto for the year 1891 and up to and including the date of the alleged fire has been destroyed. We are not in a position to admit or deny liability at this time. You are hereby...