Court Opinion

ID: 7948231
Source: CourtListenerOpinion
Date Created: 2022-09-08 23:23:13.589675+00
Date Added: 2024-06-11T16:33:53.772801
License: Public Domain

Ostrander, J.
(dissenting). The policy in question, like all Michigan standard policies, contains the following:
“This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void * * * if the interest of the insured be other than unconditional and sole ownership; or if the subject of insurance be a building on ground not owned by the insured in fee simple; * * * 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, * * * whether by legal process or judgment or by voluntary act of the insured, or otherwise. * * *
“If, with the consent of this company, an interest under this policy shall exist in favor of a mortgagee or of any person or corporation having an interest in the subject of insurance other than the interest of the insured described herein, the conditions hereinbefore *426contained shall apply in the manner expressed in such provisions and conditions of insurance relating to such interest as shall be written upon, attached or appended hereto. * * * ”
' Who was the insured in the policy in suit, according to its terms? Clearly, it was Neil J. Berston. The persons applying for the insurance so intended, the policy was drawn according to information which they furnished, and the agent who drew it testified that by it he intended to protect three interests — those of Houran, those of the Schiels, and those of the owner. The policy ran for three years. By its terms, in case the contract interest of Houran and of the Schiels was extinguished, and thereafter a loss occurred, Neil J. Berston would be entitled to the indemnity. By its terms, Houran and the Schiels, instead of being the insured, belonged to a class protected by the policy, with rights in many respects unaffected by breaches of its conditions by the insured. Gourlay v. Insurance Co., 181 Mich. 286 (148 N. W. 258). The fact that Houran paid the premium and received the policy is unimportant as affecting the plain terms of the policy itself. Both Houran and the Schiels were and are bound by the contract. Wierengo v. Insurance Co., 98 Mich. 621 (57 N. W. 833); Wyandotte Brewing Co. v. Insurance Co., 144 Mich. 440 (108 N. W. 393, 6 L. R. A. [N. S.] 852, 115 Am. St. Rep. 458). It turns out that Neil J. Berston had no interest in the property. The misrepresentation as to his ownership, though innocently made, was none the less material. The contract makes it material. Graham v. Insurance Co., 87 N. Y. 69 (41 Am. Rep. 349). The policy is void as to Neil J. Berston and as to Houran and the Schiels, because Berston was not owner of the property, and Houran and the Schiels represented that he was.
My Brother Kuhn, as his opinion shows, reforms the contract. He says:
*427“The parties who entered into the contract of insurance were Michael E. Houran and Mary Schiel, each having an insurable interest, as insured, and the defendant company * * * as insurer.”
An answer to this is that the contract itself refutes it and the oral testimony contradicts it. Neither Houran, Mrs. Schiel, nor the defendant’s agent supposed that either Houran or Mrs. Schiel occupied or desired to occupy the position of the insured. It was an'interest “other than the interest of the insured” which Hourian and Mrs. Schiel each sought to protect, to which thé'defendant consented. But suppose they be treated as the insured. Neither disclosed to the agent the real interest which each had in the premises. Most material facts were concealed. Houran was the assignee of the Schiels as,vendees in the land contract. The interest of the Schiels was not only conditioned upon payment of the purchase price to the vendor of the land, but also was conditioned upon paying Houran the debt they owed him. Their interest was incumbered, and Houran held the incumbrance. No one can fairly contend that these were not material facts. That they were concealed — not made known — is undisputed. Aside from this, it appears that the Schiels paid the balance due upon the land contract, and that their vendor, after the policy was issued, conveyed the land to the plaintiff, the sole legatee and devisee of Michael E. Houran, by proper deed of conveyance. The executors of the estate of Michael E. Houran testified that they knew nothing about this conveyance, and whether they did or not was a questibn submitted to the jury with the instruction that, if they assented, the policy was avoided. There was no disputed question of fact. The evidence is overwhelming that a son of Mrs. Houran, the plaintiff, managed to a considerable extent the business which survived his father, and that he repeatedly made settlements, took security, and in similar matters acted as his *428father might have acted in like circumstances. The executors knew, generally, and sometimes specifically, what the son was doing. Moreover, they have not repudiated the particular transaction, but still hold the assignment made by the Schiels and the deed made by the vendor in the land contract. The defendant had no notice of the changed relations, and the policy, by its terms, was avoided. Unless the provisions of the contract of insurance prescribed by the legislature are to be avoided or enforced according to some notion of equitable right formed after the fact, plaintiff cannot recover in this action and defendant’s motion for a directed verdict should have been granted.
Stone, Bird, and Steere, JJ., concurred with Ostrander, J.