Court Opinion

ID: 7064692
Source: CourtListenerOpinion
Date Created: 2022-07-24 07:24:42.45234+00
Date Added: 2024-06-11T16:12:19.883667
License: Public Domain

On Petition for Rehearing.
Roby, J.
1. It is conceded in appellant’s brief supporting its petition for rehearing that the word “void,” as used in its policy means voidable at the election of the insurer. Such construction of the term is in the interest of the insuring public, who otherwise would have no certainty of protection, no matter how persistently premiums are paid, and equally in the interest of the insurance companies, who being denied, as they would have to be denied, the right of keeping premiums paid upon contracts subsequently found to have been void from the beginning, would find the repayment of premiums so held, burdensome. Barber v. Lyon (1846), 8 Blackf. 215. This premise being granted, the question of what facts are necessary to make a good answer must be determined by the well-established rules of law, and this is as if should be, for the law is the same for all persons, and insurance contracts are therefore construed exactly as other contracts are. Ohio Farmers Ins. Co. v. Vogel (1906), 166 Ind. 239, 3 L. R. A. (N. S.) 966; 16 Am. and Eng. Ency. Law (2d ed.), 862; *7171 May, Insurance (4th ed.), §172, et seq.; 1 Beach, Contracts, §249.
5. Breach of warranty does not, in England, authorize the vendee to avoid a contract of sale, unless there is an express provision in the contract that he may do so. Street v. Blay (1831), 2 Barn. & Ad. 456; Gompertz v. Denton (1832), 1 Cr. & M. *207; Dawson v. Collis (1851), 10 C. B. *523. Such breach does not confer a right of avoidance in this State. Marsh v. Low (1876), 55 Ind. 271; Hoover v. Sidener (1884), 98 Ind. 290; Wulschner v. Ward (1888), 115 Ind. 219, 222. These decisions accord with the weight of American authority.
6. The contract involved in the ease at bar expressly confers the right to avoid the contract for breach of warranty, and it is therefore only necessary to a good answer that sufficient facts be stated to show a legal election upon its part to avoid the same. A warranty is a promise, usually collateral to the principal contract (Benjamin, Sales [7th Am. ed. by Bennett], §610), but not necessarily so (Mechem, Sales, §§1334, 1393). The rule in all cases of rescission is that the party rescinding must restore, or offer to restore, every thing of value which he has received under the contract. Calhoun v. Davis (1851), 2 Ind. *532; Hanna v. Shields (1870), 34 Ind. 84; Balue v. Taylor (1894), 136 Ind. 368. That rescission will not be permitted unless the parties are placed in statu quo has been declared a great many times. The doctrine has its foundation in the natural justice which will not permit one to retain the advantage and escape the burden of his contract at the same time, and it does not depend upon the reason for rescission, which may be fraud, mistake or (by agreement, as in this case) breach of warranty. “But being possessed of the fruits of the contract as ultimately made, it became necessary for appellee [appellant in this case] to elect as to the status that the transaction should assume. If he would have accomplished a rescission, it - was his duty so to elect with reason*718able promptitude, and to return or offer to return whatever of value he had received by contract. By omission to pursue this course he affirmed the contract.” Horner v. Lowe (1902), 159 Ind. 406.
3. The answer to which the court sustained a demurrer shows a breach of warranty, and that such breach may be made the basis of a rescission appears, but it does not state facts showing a valid election by the company. It does not show a return of premiums. It does not show that no premiums had been received. It does not even contain an expression of willingness to restore the statu quo, and “we think no case can be found in the books which will sustain them in this.” Johnson v. Cookerly (1870), 33 Ind. 151, 155.
The petition is overruled.
All concur.