Case Name: Eminence Mutual Insurance Company vs. Jesse
Court: Kentucky Court of Appeals
Jurisdiction: Kentucky
Decision Date: 1859-01-14
Citations: 1 Met. 523
Docket Number: 
Parties: Eminence Mutual Insurance Company vs. Jesse.
Judges: 
Reporter: Kentucky Reports
Volume: 58
Pages: 523–528

Head Matter:
CASE 35 — PETITION EQUITY
JANUARY 14, 1859.
Eminence Mutual Insurance Company vs. Jesse.
APPEAL FROM HENRY CIRCUIT COURT.
The charter of an insurance company provides that every person obtaining insurance shall thereby become a member of the company, during the continuance of his policy, and liable for his proportion of losses, &c., incurred whilst he is a member; that his right, title, and interest in the land on which the buildings insured are situated shall be pledged to the company, who shall hold a lien upon the same ; that policies should be deemed valid in all cases where the insured has a title in fee-simple, unincumbered, to the buildings insured, and to the land covered by the same ; but if the insured have a less estate in the land, then the policy to be void, unless the true title of the assured be expressed in the policy. The building insured in this case, as well as the land upon which it was situated, belonged to the wife of the assured, which fact was not disclosed to the company, nor expressed in the policy, which was procured by the husband in his own name, as owner of the property, at its full value. Held — That the policy was not binding on the company.
The facts sufficiently appear in the opinion of the court.
J. M. and W. C. Bullock for appellants—
1. The appellee having failed, upon inquiry, at the time of the application for insurance, to disclose the true condition of the title of the property insured, the policy is not binding upon the company, even as a general policy. (Angelí on Insurance, 2d eel., sec. 187, page 248; Phillips on Insurance, 3d cd., 354; 1 Marshall on Insurance, 467; 2 Peters’ U. S. Rep., 49, 50.)
2. In policies issuing from, a mutual insurance office, the extent and character of the title to the property insured, whether the assured be questioned in regard to it or not, are rendered essentially material and important from the peculiar nature and organization of the company. (See authorities supra; Angelí, supra, secs. 188, 189, 190-192, and references; Sess. Acts, 1853-4, page 443 ; 8 Peters’’ U. 8. Rep., 560.)
3. The policy is void, under the operation of the 12th section of the act incorporating the company. (See act, supra; 7 B. Mon., 470-3; 8 B. Mon., 645-6; 1 Mon., 34; 13 B. Mon., 314; 1 J. J. Mar., 327; Angelí, pages 61, 62; 2 Johnson’s Ch’y Rep., 630; Roberts on Frauds, note, pages 82, 83 — 4; Angelí, sec. 383, page 448.)
PRYOR and Deane on same side—
1. The judgment is for too much. By the terms of the charter it should not be for more then two thirds of the value of the property.
2. The plaintiff failed to establish either fraud or mistake.
3. The policy is void; no lien could be enforced as required by section 8 of the charter. It is void because the plaintiff had not the fee-simple title to the property insured. (See section 12 of the charter.)
James Harlan for appellee—
1. A court of equity has power to reform a policy of insurance and make it conform to the intention of the parties, and then grant relief to the plaintiff. (13 B. Mon., 314; cases referred to in a note to the 3d American edition of Adams’ Equity, top page, 406-7 ; 3 B. Mon., 231.)
2. The representation of title made by Jesse was sufficient. (Addison on Contracts, 562.) He acted in good faith, and his answers to the questions of the insurance company are not warranties. (8 B. Mon., 637.) If the character of the -title was not inserted in the policy it was the fault of the company, whose business it was to fill it up.
3. There is nothing in the charter of the company that renders the policy void.
T. N. and D. W. Lindsey on same .side—
There is nothing in the charter of the company which prohibits a husband from insuring in his own name the property of his wife. (Sess. Acts, 1853-4, page 443.) Jesse stated truly the character of his title, but the secretary of the company omitted, through fraud or mistake, to put down his answers correctly. The charter does not prohibit the insuring of any kind of interest in property; the interest of the husband was insurable. The title to the property was good, and the husband might well procure insurance upon it. Proposals made, or conversations had between the parties prior to the subscription, are regarded as waived, if not inserted in the policy or contained in a memorandum annexed to it.
Authorities cited: 13 B. Mon., 314; Angelí on Insurance, 56, 58; 2 B. Mon., 50. .
John Rodman on same side—
The appellee truly stated the title to the property insured. Having done this, there is nothing in the charter which forbids its insurance. (Sess. Acts, 1853-4, page 443.) As husband, the appellee had an insurable interest. (2 Peters’ Rep., 43; 1 Phillips on Insurance, 26; 2 B. Mon., 50.) The rule adopted by the company, that property of the wife should not be insured in the name of the husband, did not prevent them from granting the policy in this case, as they had full power to change the rule. Where a mistake is made in reducing a policy of insurance to writing, the assured may have relief in a court of equity. (3 B. Mon., 231; 7 B. Mon., 473; 13 B. Mon., 314.)

Opinion:
CHIEF JUSTICE SIMPSON
delivered the opinion op the court:
The principal question in this case is, whether when the appellee, Jesse, made his application to procure an insurance upon the dwelling-house which was subsequently destroyed by fire, he made such a representation of his title thereto as would, had it been expressed in the policy, have clearly manifested its true nature and extent?
The importance of this inquiry becomes evident by adverting to some of the provisions of the charter under which the appellants have a corporate existence.
By the 2d section thereof, all persons who may at any time become interested in the company, by having their property insured therein, are to be deemed to be members thereof for and during the continuance of their policies.
By the 8th section, it is provided that every member of the company shall be bound to pay his proportion of all losses, and expenses incurred by the company during the time he is a member thereof, and that his right, title, and interest in the land on which the buildings insured are situated shall be pledged to the company, and that the company shall have a lien upon the same to secure its payment.
And by the 12th section it is provided that every policy of insurance issued by the company shall be deemed valid and binding, in all cases where the insured has a title in fee-simple, unincumbered, to the buildings insured, and to the land covered by the same; but if the insured have a less estate therein, the policy shall be void, unless the true title of the assured be expressed in the policy.
The property insured in this case belonged to the wife, and not to the husband, who procured the insurance in his own name. The nature of the title was not expressed in the policy, and for that reason it is insisted by the company that the policy is void.
The representation which the insured made concerning the title was, in answer to the question, " have you a clear title to the property which you wish insured." He states that the answer to this question was as follows, viz: " It was the house and possessions of J. P. Foree, whose title was as good as any man's in the country, and who was the father of my wife." No further explanation was made concerning the title. He was then asked by the secretary of the company, as is proved by the latter, have you a clear title to the property ? To which he answered yes, and the answer was so written in the application.
The secretary of the company states in his evidence that he did not understand from the foregoing answer that the property insured belonged to the wife of the applicant, but he thought " the remark was made to show that the title was good and unquestionable."
It is not very material, however, in what sense it was understood by the secretary of the company. The real question is, would it, if it had been inserted in the application, and thereby made part of the policy, have been sufficient to show the true nature of the title to the property ?
We have no difficulty in answering this inquiry. The question propounded had reference to the title of the applicant. According to the answer, his title was that which had belonged to J. P. Foree, whose title was as good as any man's in the country, and who was the father of his wife. The plain and obvious meaning of the answer was, that the applicant was invested with the title of J. P. Foree, whose daughter he had married, and that the title was as good as any man's in the country. The question had no reference to the title of the wife, nor did . the answer show that she was the owner of the property. The applicant represented himself as the owner of the property insured, and if his answer, in the very language it was made, had been inserted in the policy, it would not have expressed the true nature of his title.
It is argued, however, that the husband had an' insurable interest in the property, and had also a right to insure it for the benefit of his wife; and as the title was in her, it is not material whether it was so expressed in the policy or not.
The interest of the husband in the real estate of his wife is not a proper subject of insurance under the provisions of the charter of this company. He cannot create a permanent lien on the land on which the buildings insured are situated, to secure the payment of his proportion of the losses which may be sustained by the company during the continuance of his policy. His interest is contingent, and terminates upon his death. The lien would therefore be temporary in its character, and of but little value. If his interest be insurable at all, it is only insurable in proportion to its value, and not upon the whole value of the property. Consequently he cannot insure the property of his wife in his own name, nor has he any right to insure it as his own property, to its full value, as he did in this instance.
It is said, however, that an insurance in the name of the wife will not create a lien upon her property, and therefore, according to this construction of the charter, her property cannot be insured by this company.
What effect an insurance in the name of the wife would have we are not called upon to decide in this case. If, however, the argument be correct, it only proves that the charter is defective, in not providing some mode by which an insurance on the property might be effected, so as to create the required lien. It could no doubt be created by a joint conveyance by the husband and wife, made expressly for that purpose, if in no other manner.
The charter evidently contemplates the creation of a lien by the act of insurance. The party assured can only create a lien upon his own title. The reason for requiring the true title of the assured to be expressed in the policy, when his estate in the property is less than a fee-simple, becomes obvious when this provision of the charter is considered. The person obtaining the insurance thereby becomes a member of the company, and unless he has aright, and is capable to create a lien on the property insured, or on his interest therein, the object contemplated by the charter will be defeated.
The estate of the assured in the property embraced by the policy was, in this case, less than a lee-simple. His true title was not expressed in the policy, nor would it have been had all that he said in relation to it been stated therein at length. By the express provisions of the charter, the polic3r was therefore void, and the company discharged from all liability upon it.
Wherefore, the judgment is reversed, and cause remanded with directions to dismiss the plaintiffs petition.