Case Name: Filmore D. Heldreth v. Federal Land Bank of Baltimore et al.
Court: Supreme Court of Appeals of West Virginia
Jurisdiction: West Virginia
Decision Date: 1932-02-23
Citations: 111 W. Va. 602
Docket Number: No. 7051
Parties: Filmore D. Heldreth v. Federal Land Bank of Baltimore et al.
Judges: 
Reporter: West Virginia Supreme Court
Volume: 111
Pages: 602–604

Head Matter:
Filmore D. Heldreth v. Federal Land Bank of Baltimore et al.
(No. 7051)
Submitted February 17, 1932.
Decided February 23, 1932.
E. A. Bartlett and Wm. T. George, for appellant.
Harvey F. Smith and Cook <& Markell, for appellee State Assur. Co., of Liverpool, England.
1. P. Whitehead, and Charles W. Louchery, for appellee Federal Land Bank of Baltimore.

Opinion:
Maxwell, Judge:
This suit was instituted by a mortgagor to cancel an assignment by the mortgagee to the insurer of so much of the mortgage debt as equals the amount paid by the insurer to the mortgagee under "standard" mortgage provision of plaintiff's policy of fire insurance for loss of a dwelling on the mortgaged property. On the merits, the trial court found against tbe plaintiff and dismissed Ms original and amended bills. Tbe plaintiff appeals.
Tbe insurer denied liability to tbe plaintiff, but, recognizing its liability to tbe mortgagee under tbe "standard" mortgage clause of tbe policy, it paid to tbe mortgagee tbe insurance on tbe dwelling in tbe amount of $1,000.00. And, under a provision of tbe policy wbicb subrogated tbe insurer to tbe rights of tbe mortgagee, pro tanto, in sueb circumstances, tbe insurer obtained of tbe mortgagee an assignment of tbe mortgage to tbe extent of tbe insurance paid.
None of tbe grounds relied on by itbe insurer in support of its denial of liability to tbe insured need be considered, save one, and it is predicated on a condition of tbe policy that "this policy shall be void if there be now or shall hereafter be procured any other insurance upon such property not permitted in writing hereon." Tbe policy did not contain any permission in writing thereon for additional insurance. But there was other insurance. This is admitted by tbe insured.
In tbe standard form of fire insurance prescribed by Acts of tbe Legislature of 1923, chapter 18, (Code 1931, 33-4-7) there is found this provision: "Unless otherwise provided by agreement in writing added hereto this Company shall not be liable for loss or damage occurring, (a) while tbe insured shall have any other contract of insurance, whether valid or not, on property covered in whole or in part by tMs policy." It will be observed that the quoted condition of the policy is in substantial compliance with the statutory condition. A breach of such condition is, of course, a sufficient ground for denial of liability by tbe insurer to tbe insured. That such conditions are reasonable and proper is generally recognized. 5 Couch on Insurance, Sec. 1041; 26 Corpus Juris, p. 256; 14 Ruling Case Law, p. 1065; Insurance Co. v. Williams, (Ind.) 112 N. E. 556; Insurance Co. v. Bank, (Va.) 118 S. E. 236.
In discussion of this condition of tbe policy, tbe trial chancellor said: "There is no evidence here that tbe.condition was ever waived by tbe Company, but on tbe contrary it appears that the Company bad no notice of this insurance until long after the fire and but shortly before the filing of this suit, as well as after it had made payment to the mortgagee. I see no reason why the Company cannot now rely upon such violation of the agreement by the insured to defeat his claim even though at the time of the payment to the Bank, upon denial of liability to plaintiff, it had no knowledge of this breach of contract." In the opinion thus expressed we concur. We think that the insurer's right to rely on that breach was not impaired by the fact that it did not become advised of the other insurance until some time subsequent to the fire. (The denial of liability was at first based on other grounds, not necessary to be discussed in this opinion.) Our said conclusion, as was evidently the trial chancellor's is predicated on the reasons which underlie such condition in a fire insurance policy. Such condition is deemed reasonable and proper because the moral hazard should not be increased without the knowledge of the insurer. It is considered that not infrequently the motive for the preservation of property decreases as insurance mounts. It will be noted that under our statute, quoted and cited, the condition obtains even though, such other insurance may be invalid. Thus it is evident that the Legislature considered that additional insurance increases the moral hazard though it is invalid, if the fact of such invalidity is unknown to the insured, and in such cases it is to be presumed that he does not know of the invalidity else he would not assume the burden of paying the additional premiums. It follows that plaintiff's effort to meet the difficulty by undertaking to waive, on submission of the case, any benefits he might have under the other insurance, is without avail.
The plaintiff thus having breached an unequivocal condition of his policy, the insurer was justified in denying liability to him under the policy, and, having discharged its liability to the mortgagee under the "standard" mortgage clause, was entitled to an assignment pro tcmto from the mortgagee. We perceive no error in the finding of the chancellor.
Affirmed.