Court Opinion

ID: 6544271
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:18:18.077229+00
Date Added: 2024-06-11T15:55:55.382180
License: Public Domain

Riddick, J., (after stating the facts.) This is an .action on a fire insurance policy. The plaintiff, Loyd, in the written application upon which the policy was issued, stated that there were no unsatisfied judgments against him, and that he was the sole owner of the property to he insured. It was conclusively shown at the trial that these statements were not true. There were unsatisfied judgments against him, and he was not the owner of the property. It belonged to his wife. But it is said that if any forfeiture existed by reason of these statements in the application, it was waived. The facts relied upon as a waiver are .that, shortly after the loss occurred, the adjuster of the association met Loyd and his attorney at the office of the latter. The adjuster had heard of the judgments against Loyd, and on that ground denied that the company was liable, and refused to pay the face of the policy, but offered to compromise. Loyd declined to accept the compromise, and thereupon the adjuster left, saying: “You can make your proofs. I have ninety days in which to settle.” He afterwards furnished blanks for plaintiff to make out his proof of loss. As the adjuster had notice that there were judgments against Loyd, and that the statements in his application with reference to such judgments and liens upon his property were not true, there is ground for the contention that any forfeiture arising from such misstatements was waived by the act of the adjuster in requesting plaintiff to make out proof of loss, and by leading plaintiff to incur expense of making such proof; for when the insurer, with knowledge of any act on the part of the assured which works a forfeiture, enters into negotiations with him which recognize the continued validity of the policy, and thus induces him to incur expense or trouble under the belief that his loss will be paid, the forfeiture is waived. German Ins. Co. v. Gibson, 53 Ark. 494; Phœnix Ins. Co. v. Flemming, 65 Ark. 54; 1 Wood on Insurance, § 89. But if, at the time of such negotiations, the insurer is ignorant of the forfeiture and of the misstatement which causes it, no waiver can be implied. Nor will an act which impliedly waives one ground of forfeiture affect another forfeiture of which the company and its agent were ignorant. Trott v. Woolwich Mutual Fire Ins. Co., 83 Me. 362. Now, if we concede that any forfeiture caused by tbe statements in the application as to judgments and liens was waived, there is still the forfeiture caused by the fact that Loyd was not the owner of the property insured. He stated in his application that he was the sole owner thereof, but at the time he made this statement the property had been sold under a decree against him foreclosing a mortgage on the property, and had been purchased,by another. It makes no difference that the purchaser was his wife, and that the purchase was made by Loyd in her name, as he stated, to avoid other claims against him. The material'fact is that by the sale and purchase all interest in the property owned by him passed to his wife. The sale took place in 1896, and he had no right to redeem. Martin v. Ward, 60 Ark. 510. He stated in his application that he was the sole owner of the property, and the policy stipulated that if this answer was untrue, or his interest any other or less than a perfect legal and equitable ownership,' except as stated thereon in writing, the policy should be absolutely null and void. It follows that the policy is void, unless this forfeiture was waived; and the burden of showing such a waiver was on plaintiff. We have stated the only act relied on as a waiver, and there is nothing to show that at the time of its occurrence the adjuster had notice that Loyd was not the owner of the property, or that his statement in the application that he was the owner was untrue. The adjuster testified that he had no notice of these facts until after this action commenced, and his testimony on this point is uncontradicted. It' is said that Loyd, in his application for insurance, stated that the title to the property was not in his name, and that this statement was sufficient to put the company on inquiry by which they could have learned the facts. But all the statements on this point must be taken together, and they are in effect that he was the sole owner of the property, though the title was not in his name, and that there was an incumbrance on the property to the extent of one hundred and fifty dollars. These statements would naturally lead the company to conclude that Loyd owned the equitable or beneficial title, though the legal title was in another. Loyd must have known that his statements would leave this impression, for in his application to the Teutonia Company he had stated that the nature of his title was a “title bond in fee simple,” and he had been informed by the Teutonia Company that this application had been delivered to the appellant association. He no doubt intended to make this impression, not necessarily to mislead the association, but probably because he himself regarded the purchase of the property in his wife’s name, and the execution of notes by her for the purchase money, as a; matter of no importance. This had been done, as he said, to avoid claims against himself, and he still intended to remain the beneficial owner. But the law regards such a transaction in a different light, and the insurance association cannot be bound by Loyd’s opinion of the matter. He should have stated the facts, and allowed the association to put its own construction upon them. It is a matter of no moment that the legal title did not pass to Loyd’s wife, for the equitable title did pass. The association had been told that the legal title was not in Loyd, but in another. It could not complain of that; but, as before stated, their defense is that, after such sale and purchase by his wife, he was neither the legal nor equitable owner of the property, and that his statement on that point was untrue. Our conclusion is that, under the facts as they appear in the record before us, this contention must be sustained, and the policy held to be void. Rohrbach v. Germania Fire Ins. Co., 62 N. Y. 47; Columbian Ins. Co. v. Lawrence, 2 Pet. (U. S.) 48; 1 Wood, Fire Insurance, § 194. Counsel for appellant-also contends that, as the association, by the terms of its policy, only agreed to pay Loyd a sum not exceeding the value of his interest in the property insured, he could not recover, even if there were no forfeiture, for his wife owned the property. There are cases which hold that, under statutes depriving the husband of the control of the wife’s property, he has no insurable interest therein. Trott v. Mutual Fire Ins. Co., 83 Me. 362; Traders’ Ins. Co. v. Newman, 120 Ind. 554. But we need not discuss that question, for, as the facts appear here, no recovery can be had under any view of the law on that point. Judgment reversed, and cause remanded for a new trial.