Oatman v. Bankers' Fire Relief Ass'n

Mb. Justice Ramsey

delivered the opinion of the court.

The evidence tended to show that the plaintiffs were the owners of the personal property insured.

1. The plaintiff H. M. Oatman, when a witness in his own behalf, was asked who owned the real estate insured in the policy sued on, and answered: “My wife, Mr. Lane’s boy, Mr. Lane’s wife, Floyd Weaver, and *391Annie Fry, and a few small interests in it of two little cousins of hers or Mrs. Dement’s. I do not know what their given names are; two minor heirs, two little girls.” This witness testified also that he and his coplaintiff owned the dower interest of Mrs. Emma Dement in said real property, and this is all the interest that the plaintiffs claimed in the real property, upon which the house was located, and it was shown that this interest was conveyed by a deed made' by Emma Dement, dated October 26, 1909. This deed is in evidence and is defendant’s Exhibit No. 1. Mr. Oatman admitted that this is the deed by which he and Mr. Lane claimed said dower interest in said real property, and that they had no interest in said real property, excepting what was conveyed by said deed. This instrument was recorded in the records of deeds of Douglas County. It is a quitclaim, and remised and released and quitclaimed unto Mrs. Homer Oatman, T. A. Lane, and J. B. Harris all the rights of dower which said Emma Dement had in the Geo. Dement estate of every kind and nature wherever situated, together with the personal property of said estate set off to said Emma Dement by the County Court of Douglas county, Oregon, including her dower interest in the real estate in Myrtle Creek and the furniture and furnishings in the hotel. It recites that it was made for the sum of $200, paid by Mrs. Homer Oatman, T. A. Lane, guardian of Harold Lane, a minor, and J. B. Harris.

Mr. Oatman, one of the plaintiffs, testified that Mrs. Homer Oatman is his wife, but asserts that he and Mr. T. A. Lane paid the consideration for said deed and that his wife did not pay anything for said dower right or for said personal property. However, the deed is made to her and not to him. He never had any deed for any interest in said land, and hence he had no *392interest therein. Her name may have been inserted in the deed by mistake, bnt we are constrained to construe the deed as it reads. Therefore the evidence shows that the plaintiff H. M. Oatman had no interest in the insured real estate, and that the plaintiff T. A. Lane owned only one third of the dower interest of said Emma Dement in said premises, and that the other two thirds of said dower right in said premises are owned by Mrs. Homer Oatman and J. B. Harris, who are not named as beneficiaries in said policy. The plaintiff H. M. Oatman has no insurable interest in said real property on which said house was located, but he may have an insurable interest in the personal property. A person has an insurable interest in property only when the conditions are such that he will lose in case the property should be burned: Farmers & Merchants’ Ins. Co. v. Mickel, 72 Neb. 122 (100 N. W. 130, 9 Ann. Cas. 992); Home Ins. Co. of N. Y. v. Mendenhall, 164 Ill. 458 (45 N. E. 1078, 36 L. R. A. 374). In the case last cited the Supreme Court of Illinois says: “Where the title of one is such, though not in fee, that he would suffer a loss or damage by the destruction of the premises, he may protect his interest, whatever may be the nature of it, by insurance, and thus it follows that an insurable interest is not always a fee-simple title.”

2. In an action on an insurance policy, the plaintiff must allege and prove that the insured had an insurable interest in the property, both at the time of the making of the contract of insurance and at the time of the loss: Chrisman v. State Ins. Co., 16 Or. 283 (18 Pac. 466); Hardwick v. State Ins. Co., 20 Or. 547 (26 Pac. 840). In this state a husband has no insurable interest in his wife’s property: 19 Cyc. 589; Agriculturad Ins. Co. v. Montague, 38 Mich. 548 (31 Am. *393Rep. 326); Mercantile Ins. Co. v. The Orphan Boy, Fed. Cas. No. 9431.

The evidence tends to show that the plaintiffs had an insnrable interest in the personal property referred to in the policy and that T. A. Lane had an insnrable interest in the dwelling-house, but the plaintiff Oatman appears not to have had any interest in the house. There is an irreconcilable conflict in the decisions of the courts as to whether agents of insurance companies can waive conditions in contracts of insurance. This court in several cases held that conditions in such contracts could be waived: Arthur v. Palatine Ins. Co., 35 Or. 27 (57 Pac. 62, 76 Am. St. Rep. 450); Allesina v. London Ins. Co., 45 Or. 442 (78 Pac. 392, 2 Ann. Cas. 284).

3. But in 1907 the legislature of this state passed an act on this subject (Section 4666, L. O. L.) changingthis rule, and this act was amended in 1911: See Laws of 1911, pp. 279-284. This statute requires insurance companies to incorporate into their policies, inter alia, the following condition: “This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void * * if the- interest of the insured be other than unconditional and sole ownership; or if the subject of insurance be a building on ground not owned by the insured in fee simple,” etc. Under this provision, which is a part of the policy sued on, less than an unconditional or sole ownership or an interest less than a fee simple may be insured, but a statement setting forth such interest must be indorsed on the policy or added thereto or the policy is void. The policy sued on contains the conditions of the statute quoted, supra, but contains no indorsement or statement showing that the insured’s' interest in the real property on which, the dwelling-house was situated was less than a sole ownership, or that their estate *394therein was less than a fee simple. Hence, according to the terms of said policy and of said statute, said policy is void.

4. It was argued by the respondent that said statute did not affect the validity of the policy, and that it merely imposed on an insurance company a fine for noncompliance with its terms. But we think that noncompliance with its terms invalidates the policy, so far as it applies to interests in real property.

The statute declares that, unless its terms are complied with, the policy shall be void, and statutes are to be construed according to the language used. This statute was construed by this court recently in Finlon v. National Union Fire Ins. Co., 65 Or. 493 (132 Pac. 712), and it was there held that noncompliance with the provisions of said statute invalidated the policy. In that case, commenting on the statute referred to, Justice Burnett said: ‘ There being no agreement to the contrary indorsed upon the policy or added thereto as required by the statute, that instrument [the policy] was shown to be void, making plaintiff’s case amenable to the objection urged by the motion for a non-suit.” We follow that decision and hold that the policy in this case is void so far as it attempted to insure the dwelling-house.

5. The policy in this case placed $1,600 on the dwelling-house and $400 on personal property. We hold that the policy is separable and that it is void as to the $1,600 on the house and valid as to the $400 on the personal property.

19 Cyc., p. 626, says: “When the contract (policy) is invalid as to part of the risk, it may be enforced as to that part as to which it is not invalid, if the two can be separated. ‘Agreements or stipulations in a policy, which are forbidden by law, will be disregarded and the contract sustained.”

*395In this case the insurance on the personal property is separable from the void part of .the policy and enforceable.

In the first instruction given by the trial court to the jury is contained the following: “There has been some evidence introduced here tending to show that there was a deed made by the parties owning this property to Mrs. Oatman and to Mr. Lane, and the evidence tends to show that he was guardian of Harold Lane. I instruct you as the law that the ownership of such an interest, with the knowledge of the defendant making the policy, would be an insurable interest, and the plaintiffs under such a state of facts would be entitled to recover, under the policy, the value of the property destroyed.”

The evidence shows that the deed referred to in the foregoing instruction was made by Mrs. Emma Dement, and that all the interest that she had or conveyed was her right of dower in said premises, and she conveyed this dower right to Mrs. Oatman, Mr. Lane, and J. B. Harris; Mrs. Oatman and Mr. Harris are not among the beneficiaries of the policy issued, and all the evidence as to the fee-simple title of the land, upon which the dwelling-house was situated, tended to show that it was vested in a number of heirs who were not beneficiaries of the policy. It is evident that the plaintiffs acted in good faith in obtaining this policy, and that the defendant’s agent knew substantially what the facts were as to the title of the real premises, but the statute referred to, supra, declares that a policy issued as this was issued is void. It is our duty to obey the mandate of the law and. hold that it is void as to the dwelling-house. It follows that the above instruction was erroneous. It is not necessary to pass on the other questions raised by this appeal.

*396The judgment of the court below is reversed and a new trial granted.

Reversed : Rehearing Denied.

Mr. Chief Justice McBride, Mr. Justice Moore and Mr. Justice Burnett concur.