Travelers Ins. Co. of Hartford, Connecticut v. Farmers Mut. Fire Ins. Ass'n of Monona County
| Decision Date | 18 November 1930 |
| Docket Number | 40496 |
| Citation | 233 N.W. 153,211 Iowa 1051 |
| Parties | TRAVELERS INSURANCE COMPANY OF HARTFORD, CONNECTICUT, Appellant, v. FARMERS MUTUAL FIRE INSURANCE ASSOCIATION OF MONONA COUNTY, Appellee |
| Court | Iowa Supreme Court |
REHEARING DENIED FEBRUARY 12, 1931.
Appeal from Monona District Court.--M. W. NEWBY, Judge.
Suit in equity, to set aside a purported cancellation of an insurance policy upon the buildings of one George H. White, which policy was drawn payable to the plaintiff, as the mortgagee as its interest may appear. Reformation of the terms of the policy was also prayed, on the ground that they were the result of mutual mistake; and judgment was prayed on the reformed policy. The answer was: (1) A general and special denial that there was any mutual mistake; (2) that the policy in question had been duly and rightfully canceled, with due notice to all parties concerned; (3) that no proofs of loss were ever presented to the defendant; (4) that the plaintiff's cause of action, if any, was barred by the statute of limitations. The district court found with the defendant, and dismissed the petition. The plaintiff has appealed.
Reversed.
Sims & Page and Underhill & Miller, for appellant.
George E. Allen and Prichard & Prichard, for appellee.
In June, 1925, George H. White became the purchaser of a tract of land comprising 429 acres, and being a part of a certain Section 22. This tract contained two sets of farm buildings. For reasons to be hereinafter stated, he conveyed a substantial part of such tract to Martha A. White, his mother. One set of buildings was located upon the portion of the tract conveyed to Martha A. White, and the other set was located on the portion of the tract retained by George H. White. For convenience of later discussion, we set forth the following plat of this tract, which indicates the parts thereof held respectively by George H. White and Martha A. White:
[SEE PLAT IN ORIGINAL]
The oblique line representing the eastern boundary of the 429-acre tract represents also the line of a ditch, known as the "West Fork Ditch." The respective locations of the two sets of buildings are indicated by the letters "X." A policy of insurance known as No. 3044 was executed by the defendant, purporting to cover the buildings owned by George H. White. Another policy of insurance, known as No. 3045, was executed by the defendant, purporting to cover the buildings owned by Martha A. White. These policies proved to be inaccurate in their descriptions of the buildings, respectively. The buildings purporting to be insured in policy No. 3044 included a barn and corncrib and a poultry house.
Immediately preceding the issuance of such polices, the Travelers Insurance Company, as mortgagee, had negotiated real estate loans, secured by mortgages, for $ 16,500 on the Martha A. White portion, and for $ 18,500 on the George H. White portion. It was a part of the requirement of this mortgagee upon the mortgagors that they carry insurance, and that the same be made payable to the said mortgagee. Such mortgage clauses were attached to each policy, and were delivered to the plaintiff, and were at all times held by it. In October, 1927, the barn located upon the George H. White land was destroyed by fire. Notice of the fire was duly given to the defendant by Anderson & Clark, the agents of George H. White. In response to such notice, the secretary of the defendant asserted that the policy had been duly canceled, on May 31, 1927, for failure of the insured to pay an assessment duly made in January of the same year. Such cancellation appeared upon the records of the defendant by entries made thereon by its secretary, Hathaway. Prior to such cancellation, notice of intention to cancel was sent to George H. White by registered mail, as required by the bylaws. A purported notice was also sent to the plaintiff by mail, unregistered, which notice was never received by plaintiff.
We consider first the question whether the purported cancellation was effective as against the plaintiff.
I. The mortgage clause attached to the insurance policy purported to render the insurance payable to the plaintiff, as mortgagee. It contained the following proviso:
It is to be noted from the foregoing that notice to the mortgagee of intention to cancel the insurance was a condition precedent to such cancellation, so far as such mortgagee was concerned.
Section 3 of the by-laws of the defendant-company provides as follows:
"If any member fails to pay his or her assessment within the time specified, the secretary shall, after five days, in person or by registered letter, notify such member that ten per cent is added to his or her assessment as costs of collection and citing the delinquent to pay same with the cost, within thirty days, under penalty of forfeiture of insurance, and that at the end of said thirty days, his or her insurance shall be suspended or canceled, unless such payment shall have been made;"
There is no other by-law covering the subject of notice of intention to cancel. The defendant-company gave notice by registered mail to George H. White, as required by the by-laws. It gave a similar notice to H. C. Adams & Company. This company had formerly been the representative of the plaintiff-company in the making of mortgage loans, and it was such representative at the time of the making of the mortgages in 1925. Its agency, however, had terminated long before the fire loss in this case, and notice to it was not effective, as against the plaintiff. The secretary of the defendant-company testified, however, that he sent notice to the plaintiff by an unregistered letter. Under the testimony for the plaintiff, no such letter was ever received by it. Was it a sufficient compliance with the precedent condition contained in the proviso above quoted that the defendant-company should mail an unregistered letter to the plaintiff, regardless of whether such letter reached its destination or not? Only two forms of notice are contemplated in the bylaws. One of these is a notice "in person," and the other is a notice by "registered letter." A notice "in person" is necessarily actual notice. It was requisite, therefore, upon the defendant to show, either that it had given notice by a "registered letter," or that it had in some other manner given actual notice to the plaintiff. A letter mailed to an addressee would become actual notice to such addressee upon receipt thereof. The secretary of the defendant-company, as a witness, reconstructed what he believed to be the form of contents of the unregistered letter which he claims to have sent to the plaintiff-company at its proper address, at Hartford, Connecticut. This reconstructed letter was made by using the printed blank form of the defendant-company and inserting certain writing in the blank spaces therein. In setting the same forth herein, we indicate the written portion of such reconstructed letter by italics, and the printed matter by ordinary type.
Hartford, Conn.
If we assume the sufficiency of the form of the foregoing to constitute notice, if received, the question still remains Did the plaintiff receive the same? The testimony in its behalf is positive that it did not. We may grant that defendant's proof of mailing such a letter to a proper address, duly stamped, would be prima facie sufficient to show that the letter arrived at its destination, in ordinary course of mail. That is to say, the court, as a trier of fact, could indulge such an inference. But the burden of the affirmative is, nevertheless, upon the defendant. The inference referred to is ordinarily indulged in by the court only in the absence of evidence to the contrary. The conflicting testimony and the effect of its may be summarized in a word. If the defendant actually mailed such a letter, the probability is great that it reached its destination. On the other hand, if the plaintiff never received such a letter, the probability is great that it was never mailed. In that sense, the evidence for the plaintiff is directly contradictory to the evidence for the defendant. We may assume that one witness is as credible as the other. This only presents an illustration of the hypothetical equipoise, which seldom comes into being as a practical fact. In attempting to give the notice in the manner in which it did, the defendant wholly ignored...
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- Travelers' Ins. Co. of Hartford, Conn. v. Farmers' Mut. Fire Ins. Ass'n of Monona Cnty.