Farmers Insurance v. Reavis

Hadley, J.

Appellees -sued appellant in two paragraphs. By the first, they seek to recover on a fire insurance policy the value of the property destroyed, and by the second, they seek recovery upon an account stated. Upon the issues joined there was a trial by jury, and with a general verdict in favor of appellees the jury returned answers to a large number of interrogatories. The overruling of appellant’s motion for judgment in its favor on the answers to the interrogatories notwithstanding the general verdict, and the sustaining of appellees’ motion for judgment on the general verdict, are the only questions presented for decision.

The material facts, as shown by the answers to interrogatories, are as follows: Appellant is a mutual insurance company. Its board of directors consisted of one member from each township of the county. It was the duty of each director to receive all applications for insurance in Ms respective township, make surveys and estimates of value of property to he insured, collect all fines and assessments, on account of losses, made upon members holding insurance in his township, and to keep a record of all transactions in regard to membership and insurance in his said territory. All resident owners of farm property are eligible to membership in said association upon paying a fee of $5 and agreeing to pay all assessments on account of losses. In case of a loss it was the duty of the secretary of the company without delay to examine the premises, “and after taking such steps as he may deem necessary for the purpose, he shall determine the amount of the loss sustained.” A by-law of the company in force at the time of the insurance provides : “Section 13. All members of this association using gas are required to have good regulators at their houses, and the pipes that are in their houses clear of leaks. The association is not responsible' for any loss that may occur by fire if these requirements are not complied with.” On May 28, 1894, appellant wrote a policy of insurance upon the dwelling-liouse and contents of appellees. John L. Thomas at the time was the secretary of appellant, and Perry Heritage a director for the township in which the property insured was situate. Heritage, as township director, solicited and prepared appellees’ application for insurance, and was at the time informed that appellees were burn-ing gas from a high-pressure line without a regulator. The property was destroyed by fire December 8, 1896. ' During all the period from the issuing of the policy to the destruction of the property Heritage knew that appellees were using gas without a regulator, and prior to December 23, 1896, reported the same to the company, and with such knowledge during all of said time continued to and did assess, collect, and receive from appellees all assessments and premiums accruing upon said policy. Three days after the fire Heritage, as director, and John L. Thomas, as secretary of the company, visited appellees’ premises, and took down a list of the property claimed to be destroyed, and fixed the value thereto, after which appellee Jesse F. Reavis inquired of Thomas when they should get their money, and the latter answered that the company would take thirty days to investigate, and if it found nothing crooked or wrong the company would pay the money at the end of that time. The value of the insured property destroyed was $517, and the value of the property insured was $1,200. Appellees, after April 6, 1896, at no time procured from the company a permit to use gas from a high-pressure line. At the time and before the fire appellees supplied their lights and cooking stove with gas through a low-pressure regulator, and their sitting-room grate with gas from a high-pressure line through a three-eighths pipe without a regulator.

Appellant grounds its defense on appellees use of natural gas from a high-pressure line without a regulator, in. violation of the company’s by-laws. Appellees seek to avoid the answers by replying that the company solicited, accepted, and continued appellees’ risk, and demanded, collected, and retained from them all premiums and assessments, with full knowledge that they were supplying their grate from a high-pressure line without a regulator other than double key valves.

Among its other findings, the jury answered, in response to an interrogatory, that it's verdict was based on the second paragraph of complaint. Appellant’s first contention is that this w'as equivalent to a finding for the defendant on the first paragraph, and as the other findings, show there was no account stated between the parties, as alleged in the second paragraph, there is, therefore, no basis for the general verdict to rest upon, and it must fall. The interrogatory in question should not have been submitted to the jury. The answer called for was not such a fact on the issues of the cause as is contemplated by §555 Burns 1901, and being unauthorized by the statute must be treated assurplusage. Clear Creek Stone Co. v. Dearmin (1903), 160 Ind. 162; Consolidated Stone Co. v. Morgan (1903), 160 Ind. 241; Salem-Bedford Stone Co. v. Hilt (1901), 26 Ind. App. 543. If such a finding is desirable it should be sought through the medium of the general verdict.

We must not lose.sight of the fact that in testing all questions of conflict between, the general verdict and special findings of the jury we must assume that every fact provable under the issues, which is essential to the support of the general verdict, was by the jury found established. This rule has been affirmed so often that we deem it unprofitable to cite cases.

It is insisted that the use of gas by appellees in their grate without a good regulator, in violation of section thirteen of the company’s by-laws, forfeited their right of recovery. While it is true that the answers to interrogatories show that the by-laws provided that members — or insured persons — were “required to have good regulators at their houses,” and that in default of which the association would not be liable for any loss by fire, it is also shown by such answers that a director of appellant, whose duty it was to solicit, supervise, and accept all insurance in his township, and to collect the initiation fee, and all fines and assessments that should be levied against the policy, and to keep a record of all the company’s business in his township, and who did solicit appellees’ insurance, and did prepare, approve, and accept appellee’s application, and forward the same to the secretary of the company for an issuance of the policy, was at the time of taking such application fully informed by appellees that they were using gas without a regulator. It also appears that this information was, by the director, prior to December 23, 1896 — which we must presume was at the time of forwarding the application — reported to the company. It is still further shown that, after being thus informed, and continuing so informed from the date of the policy to the time of the loss, the company continued to demand, collect, and retain all regular premiums and assessments made against appellees’ policy prior to the burning of their property. Having, with knowledge of the broken condition, .demanded and collected the assessments, appellant, with the money in its possession, will not be heard to say that appellees had no insurance for the money that was paid. When the company received notice that appellees were using gas without a regulator, it might have refused to issue the policy, or, if such notice was received after the policy had been issued, it might have declined to make further assessments or receive further payments, and canceled the policy; but having gone on making and collecting assessments, and holding out to the insured the reasonable belief that the policy was valid, the company will not now be permitted to insist upon a forfeiture.

“It is abundantly settled,” said Mitchell, J., in Havens v. Home Ins. Co. (1887), 111 Ind. 90, 60 Am. Rep. 689, “that, nothwithstanding conditions in the policy, if at the time the insurance was effected, or afterwards, there were conditions, uses or incidents of the risk, which were in conflict with conditions in the policy, and which were known to the insurer, or its agent, whose knowledge is imputable to the company, such conditions, uses or incidents, can pot be used to defeat a recovery after a loss has occurred. Jssuipg .op continuing a policy of insurance, with full knowledge by the company of existing facts, which, according to a condition of the contract, ¡make it voidable, is a waiver of the condition.” See authorities collected on page •92 of that case. See, also, German Mut. Ins. Co. v. Niewedde (1895), 11 Ind. App. 624; Northwestern, etc., Assn, v. Bodurtha (1899), 23 Ind. App. 121, 77 Am. St. 414.

It follows that the special finding of the jury that appellees were using gas without a regulator was not in ponfliot with the general verdict, and appellant’s motion for judgment was properly overruled.

Judgment affirmed.