Horswill v. North Dakota Mutual Fire Insurance

178 N.W. 798, 45 N.D. 600, 1920 N.D. LEXIS 162

Opinions

Grace. J.

This action is one to recover upon a policy of fire insurance upon a dwelling house, which was totally destroyed by fire, and which prior thereto was located upon plaintiff’s farm. The policy is the standard form in use in this state. The complaint properly states a cause of action upon it, and the answer, in addition to a general denial, sets forth several defenses based upon certain terms of the policy, to which reference will be subsequently made.

The facts are short and simple. The policy in question was issued on the 9th day of July, 1916, in the sum of $2,000, on a certain two-story shingled roof frame building, owned by plaintiff, and situated on northwest quarter of section 30, township 135, range 94. It was written for a three-year period, and was effective from the 9th day of July, 1916, until noon the 9th day of July, 1919. The amount of premium was $30, which was paid. It was a renewal policy, the dwelling having been theretofore insured by the defendant. The application for the previous insurance was executed in 1913, and the inference is that the previous insurance was for three years. No new application was signed at the time the present policy was issued. No objection is made to the consideration of this application in connection with the renewal policy, and it is not necessary to state what would be our conclusion in that regard if such objection had been made. On December 13, 1918, the house was entirely destroyed by fire. Immediately after the fire the plaintiff notified defendant of the loss. He wrote to it at four different times, in each letter calling attention to the loss under the policy. The defendant apparently paid no attention to these letters and sent no blanks upon which defendant might make proof of loss. Some time after plaintiff had written the last letter, an adjuster by the name of Yelzey came to Regent and had a talk with plaintiff with reference to the loss. The adjuster inquired from plaintiff if he had a total loss and was answered in the affirmative. He afterwards went out and examined the loss and reported to plaintiff, in effect, that it was a total loss, saying, in answer to plaintiff’s question: “Is it a total loss or not,” “All there is is ashes.” The plaintiff never made any report or proof of loss other than the notices above mentioned.

Defendant seeks to avoid liability on the policy mainly for the following reasons':'

(1) That the application states the premises are occupied by the owner, whereas they were, in fact, occupied by a tenant!

(2) That a vacancy occurred in the occupancy of the dwelling.

(3) That subsequent to the issuance of the policy plaintiff placed additional encumbrances upon the land.

(4) Failure to make proof of loss.

(5) No waiver by a failure to return unearned premium, and a claim that there is no unearned premium, the rate for occupancy by a tenant being enough higher than the premium when occupied by the owner that it equals the alleged unearned premium.

(6) Errors of law in the instructions given by the court.

With reference to the question of occupancy, it may be said that, while it is true the application states that it is occupied by the owner, there is competent evidence which clearly shows that at the time the application was taken for the insurance the plaintiff had a talk with defendant’s agent, who took the application, with reference to the occupancy of the land by plaintiff or by his tenant. Plaintiff’s testimony is to the effect that the agent asked him if there was a tenant living there, and that he told him there was, and that he told him, further, that he (plaintiff) was living in Regent, and he said that was all right, and that he (plaintiff) told him “that he never would live in it himself, that he knew of at that time.” The plaintiff has had a tenant thereon ever since he made application for and took out the insurance, and had one thereon at the time of the fire, whose name is Frank Busholl, who rented and took possession of the farm in the month of October, 1918. We are of the opinion that there is conclusive proof that the agent of defendant had full knowledge and notice of the fact that the place would be occupied by a tenant during the time-the policy was in effect; that the act of the agent in taking the application for the insurance being one which he was authorized to do, and which was within his authority,' that the principal must also be deemed to have knowledge and notice. The agent, at the time, knew of the tenancy, and knew that the dwelling would be occupied by a tenant, and not by the owner, and he should have so stated those facts in the application, and, not having done so, we think the defendant is estopped to urge the occupancy of the tenant to avoid the policy. This principle is upheld in the case of Leisen v. St. Paul F. & M. Ins. Co. 20 N. D. 316, 30 L.R.A.(N.S.) 539, 127 N. W. 837; Schwindermann v. Great Eastern Casualty Co. 38 N. D. 584-590, 165 N. W. 982; Comp. Laws 1913, § 6350; French v. State Farmers’ Mut. Hail Ins. Co. 29 N. D. 426, L.R.A. 1916D, 766, 151 N. W. 7.

Vacancy is another defense relied upon by the defendant to avoid its liability under the policy. This question, we believe, is one for the jury. By a verdict in plaintiff’s favor it has, in effect, found there was no vacancy. After Busholl entered the land and took possession, he moved in some furniture, among other things, a stove, beds, chairs, tables, dishes, clothes, etc. He was a bachelor. One Sagmiller and wife, in the latter part of 1918, also stayed at the house with him for a period of four weeks while he and they were working upon the farm. Two days prior to the time of the fire Busholl slept in the house. At that time there was a bed, bedclothes, spring, and mattress there. He slept on the premises all the time after he rented it, except the nights he slept at Sagmiller’s. It appears, also, from the testimony that he and Sagmiller were working together at Sagmiller’s coal mine for the purpose of getting out their coal for the winter, and during that time the plaintiff stayed at Sagmiller’s place. Two or three days before the fire he went over to the dwelling house in question for the purpose of making room to hold the coal for the winter. As near as may be gathered from the testimony, his absence was a mere temporary one, and he intended to return to the dwelling, and this though he had moved part of the furniture out of the house. There are many reasons why he may have moved out part of the furniture temporarily. He may have desired and needed to have used it temporarily elsewhere. The fact that he went over to see about fixing room for the coal shows that he intended to return, and his testimony is to the effect that his intent was to return. Other circumstances would also show this, as he had rented the land for the following year and intended to and did crop it. We further think there is a failure on part of the defendant to show vacancy, as the moving out of part of the furniture, or even all of it, is not sufficient of itself to show a vacancy or abandonment of the dwelling entirely. There is no showing but what Busholl had stock, machinery, and all of the other things necessary to farm the premises, on the place. Neither is there any showing to the effect that the owner did not have other furniture at the premises. A clause in the policy which provides that it shall become void if a vacancy occurs in the manner therein stated must be strictly construed. The policy provided if the dwelling became vacant for a period of ten days this would avoid the policy. As above stated, the question of vacancy was a question of fact for the jury, and it has decided against the contention of the defendant, and we think there is substantial evidence to sustain it.

Another defense is that there was no proof of loss. Certainly there was sufficient notice of loss. Plaintiff repeatedly sent written notice to defendant of the loss. Section 6545, Comp. Laws 1913, so far as applicable to this case, in effect provides: Upon notice of a loss being given to the insurer on behalf of the insured, the insurer shall, within twenty days after such receipt of such notice, furnish to the insured a blank form of proof of loss. The insured shall have sixty days after such blank form is furnished in which to make such proof of loss. If the insurer shall fail to furnish such blank form of proof of loss, he is deemed to have waived such proof, and any agreement made to waive the provisions of this section is void.

The evidence, fails to disclose that such blanks were furnished the plaintiff, and we think the company has waived any right of defense for failure to make proof of loss. It is also clear in this case that a proof of loss would have availed nothing. The plaintiff had notice of the loss, — this, it must admit, — and the loss was a total one, and the only thing that could be stated in the proof of loss, were it made, was that the loss was the amount of the policy, $2,000. We think, also, the defendant having neglected or refused to answer plaintiff’s notice of loss, or to give the matter any proper attention, together with the failure to furnish blanks, operated as a waiver of proof of loss. The agent of defendant finally came out to the place, and knew of his own knowledge that the loss was total, and his knowledge was the knowledge of the company.

Section 6624, Comp. Laws 1913, provides: “Whenever any policy of insurance shall be written to insure any real property in this state against loss by fire, and that property insured shall be destroyed without fraud on the part of the insured or his assigns, the stated amount of the insurance written in such policy shall be taken conclusively to be the true value of the property insured.” It is clear in this case that the loss was total. Under that section the amount of the loss is the face of the policy. The defendant had notice of the-loss and knew that it was total. Its agent ascertained that the loss was total. A proof of loss could have given no greater information, nor could it have changed the amount of the loss. That section also makes it unneces sary, where the loss is total, to produce any evidence of the value of the building insured. The value thereof in such case is determined by the-amount written in the policy, and, except for fraud, that amount is conclusive. The defendant could have ascertained the value before issuing' its policy. If it did not do so, it should have. As it has failed to do so,, and there is no fraud, it is bound by the amount for which the buildings are insured. It is not claimed in this case there is any fraud, and the record discloses none. The plaintiff did introduce competent testimony showing the value of the dwelling to be $3,800, but this was entirely unnecessary, and, in this case, entirely superfluous.

As to the defense that subsequent to the issuance of the policy the-plaintiff placed additional encumbrances upon it, we are convinced the defendant cannot, at this time, rely upon and claim anything by reason thereof. At the close of plaintiff’s case, and again at the close of the entire case, the defendant made a motion for a directed verdict, basing such motion upon two grounds, viz., (1) That the premises were-vacant; (2) that there was no proof of loss. The ground of placing encumbrances upon the property subsequent to the issuance of the policy was not included as one of the grounds for a directed verdict. The rule would seem to be that where a motion for a nonsuit or a directed verdict is made, the appellate court will consider the grounds urged in the trial court, and none other, and that on appeal the appellant will not be permitted to change the grounds relied upon in the motion or add others to it in the appellate court. First Nat. Bank v. Laughlin, 4 N. D. 391, 61 N. W. 473; Erickson v. Wiper, 33 N. D. 225, 157 N. W. 592, and cases and authorities cited therein. We think this disposes of appellant’s contention in this regard. However, in this case it does appear from the evidence of plaintiff, in effect, that at the time the application was taken the plaintiff told the agent of defendant that the premises were encumbered, and that he, being in business, that it was-likely he would place other encumbrances upon the land. Assuming this to be true, we think that the defendant would be deemed to have knowledge of such encumbrances or intended encumbrances at the time the application was taken. If this is true, we doubt if the defendant could avoid liability on the policy unless it could show a positive-increase of risk. However, as we view the matter, a decision of this question is not necessary to a decision of this case; for, as above in dicated, we think on this appeal defendant is restricted to the matters stated in its motion for a directed verdict.

Adverting to the matter of unearned premium, we think that the premium paid must be taken as the proper premium for the policy issued in this case, even if it is a premium such as should have been paid where the premises are occupied by the owner, and not a tenant. Defendant had knowledge that the premises were occupied and would be occupied by a tenant. The plaintiff had a right to rely upon the amount of premium paid as being the proper premium in amount. The defendant, having knowledge of the true status at the time of the application and the issuing of the policy, is bound by the amount of the premium charged, even if it be somewhat smaller than should have been charged, where the premium charged was not intended to be discriminatory, but, if wrong at all, was wrong as the result of a mistake on its part. There is no claim in this case that the premium charged was intended to be a discriminatory one, and it is held that it was not so intended. In these circumstances, there was clearly some unearned premium; that is, the amount which would be left unearned of the premium from the date of the fire to the expiration of the policy. The defendant made no offer to return the unearned premium, and we are of the opinion that it cannot retain it and still deny liability on the policy. Yusko v. Middlewest F. Ins. Co. 39 N. D. 66, 166 N. W. 539.

While the instructions of law given by the court are not, perhaps, model in every respect, they having been given orally, and hence perhaps were not as clear a statement of the law on the subject-matter involved in the action as would have been given by the learned trial court if it had first reduced the instructions to writing and then have given them, nevertheless, we are convinced there is no prejudicial reversible error therein. We think, taken as a whole, they fairly state the law of the case and contain no reversible error.

We have examined all the errors assigned by defendant, and find none which would require and for which it would be proper to reverse the judgment appealed from. We think the judgment should be affirmed. It is affirmed.

The respondent is entitled to his costs and disbursements on appeal.

Bronson and Robinson, JJ., concur.