Court Opinion

ID: 7968554
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:52:58.299769+00
Date Added: 2024-06-11T16:34:42.800197
License: Public Domain

Canty, J.
The defendant issued a policy of fire insurance to the Devil’s Lake Mill Company, insuring the property hereinafter mentioned against fire. During the life of the policy the property insured was burned. The sum due under the policy was assigned plaintiff, who brings this suit to recover for the loss. On a trial before the court without a jury, judgment was ordered for plaintiff, and, from an order denying a new trial, defendant appeals.
1. It is claimed by appellant that it was not proved on the trial that any proof of loss was ever served on it as required by the policy. The complaint alleges that such proof of loss was served. The answer denies this by a general denial, but alleges that on the same day “a sworn statement in regard to said fire, and the property covered thereby, and the incumbrances thereon,” was made, and sent to it by mail by the mill company, which it alleges was fraudulent. While the answer does not state that this sworn statement contained all the data required to be given in the proof of loss, it at least admits that sufficient was stated to make a defective proof of loss, and the defendant, by retaining it, has waived the right to avoid the policy for want of a sufficient proof of loss.
2. The policy provided that it should be void if the insured has, or shall hereafter procure, other insurance on the property. Permission was given by the written words of the policy for other concurrent insurance to the amount of $3,000. It is admitted, and found by the court, that there was, at the time said policy was made, other concurrent insurance on said property to the amount of $11,000.
It is claimed by appellant that this avoided the policy. In answer to this it is alleged by the plaintiff, and found by the court, that, at the time the policy was made, appellant’s agent knew of this other insurance, and consented thereto; that he intended to consent thereto in the terms of the policy, and promised the mill company so to write said policy, but by clerical mistake the policy was so written as to limit the concurrent insurance to $3,000; and that the mill company did not examine the policy, or know of the mistake, until after the fire.
*498The appellant, by delivering the policy knowing of the existence of this $11,000 concurrent insurance, waived the condition. Brandup v. St. Paul F. & M. Ins. Co., 27 Minn. 393, (7 N. W. 735.)
3. The policy provides that “this entire policy, unless otherwise provided by agreement hereto added, shall be void * * * if the interest of the insured be other than the unconditional and sole ownership, ■ * * * or if the subject of insurance be personal property, and be or become incumbered by a chattel mortgage, * * * or if any change, other than by the death of an insured, take place in the interest, title, or possession of the subject of insurance.”
Prior to the fire the mill company placed two chattel mortgages on the property insured, and the appellant contends that this avoided the policy.
In answer to this the plaintiff contends that the foregoing provisions, being in the printed portion of the policy, are superseded by the written part of the policy, which part is as follows:
“$500. on its grains and seeds of all kinds, also flour, feed, bran, shorts, and grain bags, its own, or held by it in trust or on commission, or sold but not delivered, while contained in the frame, shingle-roof elevator and warehouse building situate,” etc.; that this written part of the policy permits conditions to exist which cover all the conditions which did exist after the chattel mortgages were placed upon the property, and completely unseats and annuls the provision against placing chattel mortgages on the property.
The question, to us, has been a difficult one, but after much consideration we are unable to agree -With counsel, but have come to the conclusion that this written clause does not unseat or annul the provision against mortgaging the property. It certainly unseats the printed condition against selling the property. But can we hold that, in such a case as this, permission to sell property absolutely, includes permission to mortgage it? Is it a case of the greater including the less? We think not. There may be, and often is, a moral hazard in carrying an insurance risk on property covered by a chattel mortgage which would not exist as to property sold absolutely, but left in the vendor’s possession. We are not unmindful that “held in trust,” when used in an insurance policy in this manner, does not signify a technical trust, but has a broad meaning, and will *499include property in the custody of a bailee or mere agent. Neither are we unmindful of the rule that a condition of this character, working a forfeiture, should be strictly construed. We are still forced to the conclusion that the difference between a chattel mortgage and an absolute sale, as affecting an insurance risk, is too substantial for us to hold that, where both are prohibited in the printed part of the policy, permission in the written part of the policy to make the latter includes permission to make the former.
By reason of placing the two chattel mortgages on the insured property, the policy became void, and plaintiff cannot recover.
The order appealed from should be reversed. So ordered.
Buck, J., absent, sick, took no part.
(Opinion published 60 N. W. 345.)