Neher v. Western Assurance Co.

Fullerton, J.

Respondent, being the owner and in possession of certain personal property covered by two certain chattel mortgages, aggregating $1,000, each of which were properly recorded, applied to appellant’s agent for insurance upon the property against loss by fire. The agent acting in behalf of the appellant agreed to insure the same against direct loss by fire, in a sum equal to its value, but not exceeding $1,600, for a term commencing at noon on June 23, 1903, and terminating at noon on June 23, 1904, for a consideration of $21.60. The consideration was paid, and later on a policy was sent the respondent from the appellant’s office containing, among other conditions, a condition in the following words: “This entire policy . . . shall be void ... if the subject of insurance be personal property and be or become incumbered by chattel mortgage.” The property was in value greatly in excess of $1,600, and was destroyed by fire during the period covered by the contract of insurance. Payment for the loss was demanded by respondent, and refused by appellant on the ground that the contract of insurance was void by reason of the stipulation in the policy above quoted.

The application for insurance was made orally, and no representations of any kind as to- the condition of the property were made by the applicant; the appellant relying for its information as to the condition of the property entirely upon the representations of its own agents. The respondent was not informed that the appellant refused to issue insurance on personal property covered by mortgage, nor did he learn, until after his property was destroyed, that the policy issued to him contained any condition to that effect. The appellant had no actual notice of the mortgages until after the destruction of the property by fire. These facts were stipulated by the parties, and the trial court decided thereon that the respondent was entitled to recover the full sum named in the contract of insurance, and entered a judgment accordingly.

*159The judgment was right. In Dooly v. Hanover Fire Ins. Co., 16 Wash. 155, 47 Pac. 507, 58 Am. St. 26, the policy contained a condition to the effect that it should be void if the interest of the insured in the property covered by the policy be other than unconditional or sole ownership. The interest of the insured in the property was less than unconditional and sole ownership; and, on the destruction of the property by fire, the insurance company sought to avoid payment of the loss on that ground. The court held that, inasmuch as the application was an oral one, and no misrepresentations were made concerning the insured’s title to the property, his right to recover was not barred by this clause of the policy. In the course of the argument the court said:

“There having been no written application in which ques-tions were asked and answered concerning the status of the property, we think, under the authorities and as a question of right, that this condition which is injected into the policy, among numerous other conditions more or less technical and hard to understand by the ordinary mind, ought not to prevent a recovery, in the absence of any misrepresentation on the part of the insured. The insured, as a matter of fact, ordinarily knows nothing about the policy until it is made out and returned to him after the payments for the same have been made to the agent at the time.the contract was made, and the insurer, having failed to obtain this information, must be held to have done so at its peril.”

To the same effect are the cases of Pioneer Sav. & Loan Co. v. Providence Wash. Ins. Co., 17 Wash. 175, 49 Pac. 231, 38 L. R. A. 397, and Burrows v. McCalley, 17 Wash. 269, 49 Pac. 508. These cases cannot be distinguished in principle from the case at bar, and authorize the judgment entered therein.

The judgment is affirmed.

Mount, O. J., Dunbar, and Hadley, JJ. concur.