BERREY, Presiding Judge.
Shelter Mutual Insurance Company appeals from a jury verdict in the amount of $22,400 on the policy, and interest and attorney fees in the amounts of $2,226 and $4,000, respectively. The defendant insurance company contends (1) that the insurance policy was void ab initio due to material misrepresentations made in the insurance application; (2) and that the trial court erred in submitting jury instructions number 7, 10 and 11. This court affirms but reduces the amount of interest awarded.
On May 16, 1980, plaintiffs purchased a house in DeWitt, Carroll County, Missouri, for $2,400 and gave a mortgage of $2,200.00 to the Commerce Bank of Brunswick, Missouri.
In the spring of 1982, the Crewses decided to do some general remodeling on the house. After contracting the Commerce Bank of Brunswick for potential financing,1 Dale Crewse telephoned Larry Sides, an insurance agent for Shelter Insurance Company, to arrange for the procurement of home owners insurance.
Mr. Crewse had purchased insurance for his automobiles on several occasions from Mr. Sides. On March 21, 1982, Mr. Crewse reported a fire loss on his pickup truck to Mr. Sides as well as the adjuster for Shelter, Larry Callahan.
Following up on Mr. Crewse’s contact with Mr. Sides for the purchase of the home owner’s insurance, Bobbie Crewse, wife of Dale Crewse, met Mr. Sides’ at his office in Carrollton, Missouri, on March 31, 1982. In making application for the insurance, Mr. Sides read the questions on the form and Mrs. Crewse responded to the questions asked. Mr. Sides then filled in her answers on the application.
When asked about any previous fires or thefts, Mrs. Crewse testified: “I said, ‘Well, you know about the truck’ and he said, ‘Yes, but that is automobile, and this pertains to real estate.’ ” Mrs. Crewse further testified Mr. Sides never asked her any questions concerning previous bankruptcies, delinquent accounts in the last five years, or, particular conditions of the house such as the type of flue, the number of circuits or the condition of the wiring. These inquiries were listed on the application and answers were filled in.
She also stated at the time she did not have $500 in furs, jewelry or fine arts and antiques as noted on the application and did not answer as such.
On cross-examination, Mrs. Crewse said that although she did remember the fire damage to the vehicle owned by her husband in 1978 or 1979, she did not recall the fire loss sustained to his vehicles in 1975 or 1976. The Crewses were married in 1976. Although at the deposition she testified she could not remember whether questions concerning prior fire losses, bankruptcy, etc. were asked, there was also evidence that Mrs. Crewse was sick with 104 temperature on the day the deposition was taken.
Mrs. Crewse testified after Mr. Sides completed the questionnaire, he “just pushed it over ... with his hand on it” and showed her where to sign. Mrs. Crewse signed the application without reading it.
Mr. Sides testified he asked Mrs. Crewse each question on the application and wrote the responses as given by her. He stated Mrs. Crewse answered “No” to the questions of whether any previous fire losses or thefts had occurred and whether the Crewses had taken bankruptcy within the last five years. He testified he had no knowledge of the fire loss on March 21, 1982, as his secretary did not tell him of every reported fire loss. Mr. Sides’ records, however, contained the information concerning the fire.
[38]*38After signing the application, Mrs. Crewse paid Mr. Sides $115.40 for the first annual premium. Although Mr. Sides testified to the contrary, Mrs. Crewse stated she was not given a copy of the application.
Mr. Crewse testified he sustained fire losses to his motor vehicles in 1975 or 1976 and in 1978 or 1979 and, as previously mentioned, in March 1982. Mr. Crewse filed for bankruptcy in 1979.
In the summer of 1982, a hail and wind storm damaged the house and a claim was made on the home owner’s policy. Mr. Crewse spoke with Shelter Insurance agents and received money for the damage sustained.
On March 13, 1983, the Crewses’ home and contents, including materials to build a garage, were completely destroyed by fire. Larry Callahan, an adjuster for Shelter, gave the Crewses a check for $1,500 as an advance payment on March 14, 1983; however, Shelter reserved their rights to proceed with further investigation before the full claim would be paid. At that time, the Crewses openly responded that they had suffered prior fire losses and filed for bankruptcy in 1979 when asked similar questions as were contained in the insurance application by Mr. Callahan.
On April 4,1983, a proof of loss schedule was filed with Shelter. On April 29, 1983, the insurance company informed the Crewses the claim would not be recognized as Shelter investigators had found they had taken bankruptcy in 1979 and sustained fire losses prior to the application with Shelter.
Dave Aufrenc, a property underwriter for Shelter, testified he approved of plaintiffs’ application on April 8, 1982. He stated had he known of the previous fire losses, his actions on the application would have been different if “these losses were questionable.” He stated the application would not have been approved if he had known about the bankruptcy in 1979. There was testimony, however, from Claude Hutchinson, an agent for various insurance companies as well as from Mr. Aufrenc that other insurance companies do not find bankruptcy to be a factor when considering an application for property insurance against fire.
Shelter Insurance alleges the policy was void ab initio because the misrepresentations made by Mrs. Crewse in the application were material as a matter of law.2 In Miller v. Plains Insurance Company, 409 S.W.2d 770, 773 (Mo.App.1966), the court noted the insurer “was not limited to ordinary cancellation of the policy to avoid liability” and held an insurance policy void ab initio because of material misrepresentation made by the insured. When an insurance company seeks to cancel the policy it is merely terminated prior to its expiration. Waynesville Security Bank v. Stuyvesant Insurance Co., 499 S.W.2d 218, 220 (Mo.App.1973). In contrast, a contract which is declared void ab initio is “null from the beginning if it seriously offends law or public policy.” Black’s Law Dictionary 1411 (5th Ed.1979). See Prudential Property and Casualty Insurance Co. v. Cole, 586 S.W.2d 433 (Mo.App.1979) (homeowner’s policy declared void ab initio on the basis of fraudulent misrepresentations.)
In Haynes v. Missouri Property Insurance Placement Facility, 641 S.W.2d 497, 499 (Mo.App.1982) the court stated:
The fact that there were misrepresentations are not sufficient alone to void the policy. A representation in an application for insurance, which is not in the form of a warranty or incorporated in the policy itself, must not only be false, but also material to the risk in order for the insurer to avoid its policy.
Defendant, an insurer, argues it would have increased the premium or refused to issue the policy altogether had the questions been answered truthfully. Bearden [39]*39v. Countryside Casualty Co., 352 S.W.2d 701, 707 (Mo.App.1961).
The question presented is not whether the insurer was actually influenced. A misrepresentation is material if it would likely affect the conduct of a reasonable man with respect to his transaction with another. Miller, supra, at 774. In other words, “What those engaged in the ... insurance business, acting reasonably and naturally, in the accordance with the practice usual among such companies under such circumstances would have done had they known the truth.” Haynes, supra, at 499, (citing to Chambers v. Metropolitan Life Insurance Co., 235 Mo.App. 884, 138 S.W.2d 29, 39 (1940).
Therefore, although Mr. Sides’ testimony that he would not have submitted the application had he known of the bankruptcy is one factor to be considered, it is not controlling. Evidence was also presented that the insurance industry does not generally consider bankruptcy to be a factor in the decision in accepting an application for homeowner’s insurance. Regardless of whether a misrepresentation concerning the Crewses’ bankruptcy in 1979 had been made, the jury had sufficient evidence to find bankruptcy was not material to the risk in this case.
Whether the failure to disclose a prior fire on the application for insurance was material as a matter of law or as a matter of fact must be viewed on a case by ease basis. Shelter attempts to distinguish DeLisle v. Cape Mutual Insurance Co., 675 S.W.2d 97 (Mo.App.1984) in which an undisclosed fire loss was held not to be material and, therefore, insufficient to avoid the policy. However, the instant case and DeLisle reveal significant similarities.3
First, here as in the DeLisle case, there was evidence that the defendant had independent knowledge of a previous fire loss. Id., at 100. Mr. Crewse reported the fire loss on his pickup truck to Mr. Sides’ secretary and Mr. Callahan on March 21, 1982, ten days prior to Mrs. Crewse making application with Shelter thus putting Mr. Sides and Shelter on notice. The knowledge of its agent is imputed to the insurer and the insurer, “may be bound not only when the agent knows the truth, but when he is in a position where he should know the truth from the circumstances.” Macalco, Inc. v. Gulf Insurance Co., 550 S.W.2d 883, 895 (Mo.App.1977).
Second, in the DelAsle case, the insurer’s agent completed the application and the insured was not asked any questions. DeLisle, supra, at 100. In the instant case, the evidence reveals Mr. Sides did ask Mrs. Crewse some questions; however, there was conflicting evidence of whether all the questions on the application were asked. There was also evidence that agent Sides may have thwarted further discussion concerning previous fires by suggesting the question dealt only with fires on real estate.
The court did not err in failing to sustain Shelter’s motion for directed verdict at the close of the plaintiffs’ evidence on plaintiffs’ claim for a breach of contract as well as the motion for directed verdict at the close of Shelter’s evidence on its counterclaim for fraud or for failing to sustain Shelter’s motion for judgment notwithstanding the verdict, or in the alternative motion for a new trial as there was evidence to support the jury’s resolution of this conflict.
In most instances, the question of whether the misrepresentations in an application were material is one for the trier of fact to decide. Weekly v. Missouri Property Insurance Placement Facility, 538 S.W.2d 375, 378 (Mo.App.1976); Haynes, supra, at 499. Since there was conflicting evidence on this issue the jury is entitled to resolve this conflict. The jury found Shelter did not meet its burden to establish its right to avoid the policy.
[40]*40Shelter urges this court to find that the trial court erred in submitting Instruction No. 7 as it does not accurately reflect the law in this case and fails to require the jury to find that Shelter was obligated on the contract. Instruction No. 7 patterned after MAI No. 26.02 is a verdict director in which the sole issue is the breach of a bilateral contract. Shelter contends this instruction failed to hypothesize the necessary element that the policy was in force; Shelter’s position is that the policy was void ab initio as a result of the material misrepresentation. This argument is unpersuasive for two reasons.
First, as Shelter notes, “it is well settled law that an essential element of a verdict directing instruction may not be omitted therefrom unless such element is conceded.” Carter v. Boy’s Club of Greater Kansas City, 552 S.W.2d 327, 333 (Mo.App.1977). In support of the contention that Shelter conceded the validity of the policy, plaintiffs point to Shelter’s answer which states, “it issued the policy referred to by plaintiffs ... purportedly to be effective from March 31, 1982, to April 27, 1983,_” This court, however, does not have to look to Shelter’s answer to determine whether Shelter admitted the policy was in effect. The insurance company gave validity to the policy by satisfying the Crewses’ claim for the damage caused by the hail and wind storm. The insurance company claimed the policy was not in existence only when it was for their substantial benefit.
Secondly, if an instruction omits a necessary element, this error can be cured by the submission of the defensive matter in another instruction. Scott v. Missouri Insurance Co., 246 S.W.2d 349, 354 (Mo.App.1952). Plaintiffs’ Instruction No. 7 referred the jury to Instruction No. 9, patterned after MAI No. 32.19, for the affirmative defense of misrepresentation tendered by the defendant Shelter.
Shelter also contends the trial court erred in submitting Instruction No. 11 which parallels the language of section 375.420, RSMo 1978, because the evidence did not support a finding that their refusal to pay the claim was in any manner vexatious or in bad faith.
Section 375.420, RSMo, states in part that:
If it appears from the evidence that such company has refused to pay such loss without reasonable cause or excuse, the court or jury may, in addition to the amount thereof and interest, allow the plaintiff damages not to exceed twenty percent of the first fifteen hundred dollars of the loss, and ten percent of the amount of loss in excess of fifteen hundred dollars and a reasonable attorney’s fee and the court shall enter judgment for the aggregate sum found in the verdict.
In DeWitt v. American Family Mutual Insurance Co., 667 S.W.2d 700 (Mo. banc 1984), the court stated that where “there is no appropriate MAI instruction, the verdict directing instruction must follow the substantive law and be understandable.” Id., at 711, (citing to National Super Markets, Inc. v. Shower, 613 S.W.2d 154, 156 (Mo.App.1981). The DeWitt court also stated that a jury instruction based on the above statute and similar to the one submitted by the plaintiffs was not confusing and did not mislead the jury. Id., at 711. This court finds in the instant case that plaintiffs' Instruction No. 11 was not confusing or misleading.
The jury did not award a percentage amount in damages for vexatious refusal to pay; however, the jury awarded $4,000 in attorney fees. Such an award of attorney fees without an award for vexatious damages is permitted. The jury’s failure to award vexatious damages does not nullify this award of attorney fees. Travelers Indemnity Co. v. Woods, 663 S.W.2d 392, 397 (Mo.App.1983); DeWitt v. American Mutual Insurance Co., Id., at 710.
Section 375.420, RSMo 1978, must be strictly construed as it is penal in nature. Fohn v. Title Insurance Corporation of St. Louis, 529 S.W.2d 1, 5 (Mo. banc 1975). The insured must show the refusal was [41]*41willful and without reasonable cause as the facts would appear to a prudent and reasonable man before trial. Hay v. Utica Mutual Insurance Co., 551 S.W.2d 954, 958 (Mo.App.1977). The jury may find, however, vexatious delay upon a general survey and consideration of the whole testimony and all the facts and circumstances in connection with the case. DeWitt, supra, at 710.
The case must turn on the particular facts presented. Fohn, supra, at 6. Without reviewing the entire record, several facts in the evidence point to bad faith on defendant’s part. First, agent Sides knew of a previous fire loss and still processed the application. Secondly, evidence was presented that there were answers written to questions on the application that were never asked. Finally, the defendant’s adjuster investigated and paid a claim on the policy submitted by the plaintiffs for wind and hail damage to their home in the summer of 1982. At that time, Shelter again had the opportunity to review the application. Without notification of the errors in the application, the plaintiffs had no reason to doubt the validity of the policy. Shelter apparently found the inaccuracies only when it was most profitable to do so.
Appellate courts should sustain the jury’s verdict “unless there is no substantial evidence to support it or it was against the weight of the evidence or it erroneously declares or applies the law.” DeWitt, supra, at 710. This court finds evidence to support the jury’s verdict for attorney fees based on Shelter’s vexatious refusal to pay.
Finally, the defendant insurer alleges trial court error in admitting Instruction No. 10 patterned after MAI No. 4.08 and modified pursuant to section 379.140, RSMo 1939. The instruction to the jury stated:
If you find in favor of plaintiffs on plaintiffs [sic] claim for damages then you must award plaintiffs the sum of $22,400 with interest rate of nine percent (9%) per annum, from March 13, 1983, less any amount the property depreciated between the time the insurance policy was issued and March 13, 1983.
The Crewses were insured for $15,000 on a dwelling house, $1,500 for appurtenant structures, $6,000 for unschedule personal property, and $1,500 for additional living expenses totaling $24,000 with a deducta-ble amount of $100. The jury returned a verdict of $22,400. The figure of $22,400 is arrived at by subtracting the $100 deductible and the $1,500 additional living expenses paid by Shelter the day after the fire from the total amount insured.
Shelter erroneously contends the appurtenant structures, insured in the amount of $1,500, were not totally destroyed because a small tool shed on the back of the property did not burn. Mr. Crewse testified he had purchased building materials for a garage which were destroyed in the fire along with his home and contents. The policy definition for appurtenant structures includes “a detached garage on the premises” and “materials and supplies located on the premises or adjacent thereto, intended for use in construction, alteration or repair of such garage.” A “garage” in its ordinary meaning does not encompass a tool shed or outbuilding. The destruction of the materials described by Mr. Crewse, however, unequivocally comes within this policy provision.
The evidence concerning the value, type and quantity of the building materials for the garage construction was virtually no-nexistant.4 At trial Shelter contested whether the appurtenant structure was actually destroyed; no evidence was presented to dispute the actual value or the amount of depreciation of the materials for the garage. The court in Wells v. Missouri Property Insurance Placement Facility, 653 S.W.2d 207, 210 (Mo. banc 1983) noted, [42]*42“[t]he insurer bears the burden of proving depreciation, and absent such proof the amount of the policy conclusively establishes the value of the property. ” (Emphasis added).
Assuming that the materials for the garage were less than the insured amount, the defendant is still required to pay the full $1500, the total amount insured on appurtenant structures. In Joyce v. St. Paul Fire and Marine Insurance Co., 211 S.W. 390, 390 (Mo.App.1919) there was a difference between the policy amount and the actual cash value amount of the property. The court stated:
[T]he actual cash value of the property might have been only $750 at the time of the fire; yet defendant, having agreed on a greater value when the policy was written, was held to that value, however, excessive, if there had been no depreciation up to the time of the fire. Id., at 390.
See also, Gamel v. Continental Insurance Co., 463 S.W.2d 590, 593-595 (Mo.App.1971). Similarly, Shelter agreed to a policy amount of $1,500 on the appurtenant structures, and is liable for that amount unless evidence was presented concerning the amount of depreciation.
Shelter also attempts to dispute the amount of unscheduled personal property for $6,000. The law in Missouri is, however, that “the defendant [insurer] shall not be permitted to deny that the property insured thereby was worth at the time of the issuing of the policy the full amount therein on said property.” Section 379.140; see § 379.145-160, RSMo 1978; Wells, supra, at 210. Therefore, the evidence supports the amount that the Crewses were entitled to receive under the policy as well as the instruction submitted by plaintiffs as it directed a verdict in that amount if the issues were found in favor of the Crewses.
Shelter argues that plaintiffs’ Instruction No. 10 more closely resembles MAI 4.09 rather than MAI 4.08 submitted by plaintiffs thus resulting in prejudicial error. The “ultimate test” where there is no applicable MAI, however, “is whether the instruction followed the substantive law and whether it could be understood.” Kirkwood Medical Supply Co. v. Ann Patterson Enterprises, 511 S.W.2d 433, 435 (Mo.App.1974).
In case of total loss, as in plaintiffs’ case, Section 379.140 states in part:
[T]he measure of damage shall be the amount for which the same was insured, less whatever depreciation in value, below the amount for which the property is insured, the property may have sustained between the time of issuing the policy and the time of the loss, and the burden of proving such depreciation shall be upon the defendant.
In submitting Instruction No. 10 plaintiffs cited Wells, supra, which stated “Section 379.140 ... establishes as the measure of damages for a total loss of real property the face value of the policy less the amount the property depreciates between the time the policy is issued and the time of the casualty.” Id. at 210. See also, Duckworth v. United States Fidelity and Guaranty Co., 452 S.W.2d 280, 282 (Mo.App.1970) (court held section 379.140 damages applied to personal property as well as real property). Thus, the instruction as submitted by plaintiffs appropriately reflected the law of this state and produced no prejudicial error.
The defendant also alleges Instruction No. 10 is contrary to the law as applied to the evidence in that they were entitled to a $8,887.44 credit for satisfaction of the plaintiffs’ note to the Commerce Bank of Brunswick, Missouri, and that the interest begins from June 3, 1983, sixty days after the date of proof of loss and not from the date of loss, March 13, 1983.
Shelter’s payment to the Brunswick bank satisfying the Crewses’ obligation to that bank may be viewed in one of two ways. The satisfaction of the note may be seen as a partial prepayment of the $15,000 insurance on the dwelling building and the $8,867 should have been accounted for in the instruction. On the other hand, Shelter’s payment may be viewed as a purchase [43]*43of the right to sue on the note as against the Crewses and replace the bank as a substituted creditor. The jury believed the latter to be the correct view, as does this court in this case.
Shelter Insurance stated that through the Crewses’ misrepresentation they became obligated on the notes pursuant to the standard mortgage clause in the insurance policy.5 The clause states, in part:
If this Company shall claim no liability existed as to the mortgagor or owner, it shall to the extent of payment of loss to the mortgagee, be subrogated to all the mortgagee’s rights of recovery, but without impairing mortgagee’s right sue; or it may pay off the mortgage debt and require an assignment thereof and of the mortgage.
(Emphasis added). Policy provisions like the one above have been held valid and enforceable. Mosby v. Aetna Insurance Co., 285 Mo. 242, 225 S.W. 715 (Mo.1920); Kilpatrick v. Hartford Fire Insurance Co., 701 S.W.2d 755 (Mo.App.1985).
In Kilpatrick, supra, this court upheld a directed verdict in favor of the insurer on its counterclaim for the amount of the insured’s notes purchased by Hartford. The Kilpatrick court specifically noted:
The purchase of the notes by Hartford did not constitute payment of the fire insurance claim. Rather by purchasing the notes and seeking payment from Kil-patrick, Hartford stood in the same position as any party who purchased the notes and then sought to enforce payment. Since the claim had not been paid by the purchase of the notes, the court correctly entertained Kilpatrick’s action on the policy.
Id., at 758.
At the time Shelter exercised its option under the contract, the notes to the bank were current as the Crewses had made their last payment to Commerce Bank on April 30,1983. No evidence was presented by Shelter that the Crewses were in arrears in their payment of the note since the purchase of the notes by Shelter. These facts support the jury’s implicit finding that the defendant became a purchaser of the notes. Cf. Thompson v. Longan, 42 Mo.App. 146 (1890) (the court found ample evidence to support the jury’s finding that the holder of a note secured by a mortgage was a purchaser from the original owner rather than finding the debt had been paid). Similarly, there was sufficient evidence to support the jury’s finding against the defendant Shelter for the amount of the notes on their counterclaim for fraud against the Crewses.6
[44]*44Instruction No. 10, however, is not completely free from error. In this state, interest is recoverable from the date the payment is due under the policy. Reliance Insurance Company of Pennsylvania v. Community Federal Savings and Loan Association, 440 S.W.2d 929, 931 (Mo.1969). The policy issued by the defendant contains an identical provision as noted in the Reliance case supra, at 931. It states, “the amount of loss from which this company may be liable shall be payable 60 days after proof of loss ... is received by this company....” Shelter received plaintiffs’ proof of loss schedule on April 4, 1983, and hence, no interest could be awarded prior to June 3, 1983. This court adjusts the interest accordingly pursuant to Rule 84.-14.
Therefore, the judgment as entered by the trial court is affirmed in the sum of $22,400 on the policy and $4,000 in attorney fees. The interest assessed, by the jury shall be calculated from June 3, 1983, (not March 13, 1983, as the jury was instructed) to April 18, 1984, at nine percent (9%) per annum interest, pursuant to law. Judgment is therefore entered in the sum of $1,754.50 as interest from June 3, 1983, through April 18, 1984.
KENNEDY, J., concurs.
DIXON, J., dissents in separate opinion.