Nordness v. Mutual Cash Guaranty Fire Ins.

22 S.D. 1 | S.D. | 1908

FULLER, J.

To the complaint in this action on a fire insurance policy, there was a general denial, and the issues thus presented were tried by the court without a jury. This appeal is from a judgment for the full amount claimed and from an order denying a motion for a new trial.

'The ultimate question of law discussed at the oral argument and in the briefs of counsel is determinable from the following facts and circumstances: Subject to approval at the home office of appellant and by the use of one of its blanks, respondent, a retail merchant at Waubay, made application May 16, 1903, for a con*3current policy of $1,000 on his stock of general merchandise, to become operative at noon on the 7th clay of August, 1903, but such application is silent as to the amount of premium to be paid and the term for which the property was to be insured. While the stock was actually insured for $3,500 at the time of making the application wherein respondent represented the concurrent insurance to be but $3,000, appellant issued the policy for $1,000 during the month of July, without authorizing any concurrent insurance, and forwarded the same to respondent, by whom it was received, together with a bill for the premium of $30 about one week before the 7th of August, when by its terms it was to become effective. This policy was retained by respondent until the 10th day of August, 1903, when he returned it to appellant at Sioux Falls, with the statement, “I cannot recollect ever applying for any insurance in your company, and I cannot use this as I have taken all the insurance I wish to carry.” Appellant’s secretary promptly re-mailed the policy to respondent with a statement of the account as before, and a brief letter to the effect that some one had evidently slandered his company, which was as safe as any in the state, and he hoped the matter would be reconsidered and the policy accepted. Two days after the receipt of this letter with the policy enclosed respondent again returned the same,' and wrote appellant as follows: “Gentlemen: Your favor of the 12th inst, with inclosed policy has been received, and contents has been noted. I regret very much the occurrence, but really it slipped my mind entirely, that I had made an application to your company for this risk, and I have renewed it with other company, so I cannot now use vour policy, as if I kept it, it would insure my stock at full invoice value and I do not wish to do that as I feel I ought to carry some risk myself, consequently it becomes necessary to again return your policy.” The foregoing letter with its inclosure was received by the company in due course of U. S. mail, and on the 26th day of August, 1903, the policy was mailed to respondent at Waubay for the third time, with the following letter, which reached him on the 28th instant about 24 hours after his entire stock of merchandise had been destroyed by fire: “Dear Sir: We beg to acknowledge *4receipt of your favor of the 14th inst. in which you take the liberty to again return Policy No. 247, which was issued to you in strict accordance with your application, dated May 16th, 1903, signed Lr. L. Nordness, and witnessed T. H. Dravis. Which policy we issued and forwarded to you by mail on the 15th day of July, 1903, and which you held in your possession until the loth day of Aug., 1903, at "which time the policy had taken effect and not until then did you return the policy to us saying you could not recollect ever making application with this company for insurance. At which time we returned the policy to you, giving you a full explanation of the fact, relative to your application, but you again took the liberty and returned the policy, offering' as an excuse that you were sorry, but that you had renewed your insurance with some other company. Now, Mr. Nordness, do you think this is a fair deal? We call your attention to the. fact that you had this policy in your possession from the 15th day of July, 1903, up to-the 10th day of the present month, at which time our policy was in force. Now then can you explain your reasons as given in your letter of the xot-h inst., as to not remembering ever making an application to this company, while you had this policy in your possession and being in force at that time? In the face of this you at" tempt to cancel this policy and claim to have renewed with some other company. Had you returned this policy at the time you first received it it would have been perfectly satisfactory, but we can't understand why you should attempt to cancel it now which has a prior claim. We wish to be fair with all our members, but must insist that they comply with the terms of their contract, by virtue of their policy issued to them, and under no circumstances will we permit any member to cancel his policy being in force, until the preminum has actually been paid anil then only in strict compliance with the terms of his policy. The -right, however, to terminate a contract which has been entered into and taken effect is a right which can only be exercised by either party by a strict compliance with the terms of his policy relative to cancellation. We herewith return to you your policy by registered mail, and request you to favor us with your check for the amount of your premium.” Thereupon respondent mailed his check to- the com*5pany for -the premium of $30 and on.' the following day forwarded notice of loss, but the receipt of the check was duly acknowledged on the 29th day of August before appellant had the slightest intimation that a fire had occurred.

After making tire application and'before receiving the policy under consideration, respondent procured policies from certain other companies, without the knowledge or consent of appellant so that his effective insurance amounted to $3,800 independently of the $i,ooo, to recover which this action was instituted. True, lie stated in his first letter upon returning the policy to appellant that he had taken all the insurance he wished to> carry, and again, wrote that the $1,000 insurance for which he had made the application had beca obtained elsewhere, and, as he desired to carry some of the risk, he returned the policy again so> that the property would not be insured at its full' value. Now it was shown by the undisputed evidence that at all times material to this action his stock of merchandise was worth from $6,000 to $6,500, and that he made application to appellant for the policy of $1,000 to take the place of and become effective at the expiration of an old line policy for the samé amount. However, he had previously applied to the South Dakota Mutual Company, of Aberdeen, with the same intention, and had its policy for $1,000 in his possession when he made the application’ and received the policy in question, but of this he gave appellant no information whatever. With reference to the subject he testified as follows: “At the time I received the policy I had all of this here: The Cbmmercial Mutual, $1,000.00; the Mitchell Mutual, $1,500.00, and one thousand in the South Dakota Mutual — that is the Aberdeen companjc That is I had a policy, but there was a controversy between- us — between the company at Aberdeen and myself about the premium. They raised the premium and we corresponded back and forth. It took quite a while before we got that adjusted, so- that was pending at the time I got the policy — at the time I made the application and had received the policy. Q. Now when you received this policy from the Sioux Falls company did you return it to them? A. I did after I had fixed that up with Aberdeen. Cross-examination. At the time I signed the application which has been- offered in evidence I had *6a policy of insurance on this stock of goods in the Commercial of Mitchell, $1,500.00, and the Redfield company, the Merchants, I think, $1,000.00, and then I think the Phoenix — an old line company — I had $1,000.00 in that. That expired at the time this policy I made an application for was to> take effect. Q. That you renewed? A. That was renewed with the other company. Q. Was that what you call the Aberdeen company? A. That was the one I was to renew with your company. Q. You renewed the old line company policy with the Aberdeen company? A. Yes. sir: but the intention was to renew it with yours.” To properly characterize the transaction and determine whether the parties ever entered into the contract of insurance, the foregoing unchallenged testimony introduced by respondent in support of his complaint is entitled to consideration, and there is no merit in the present contention of his counsel that it is not within the issues raised by the general denial, an:l must be disregarded.

From the record before us it affirmatively appears that neither the amount of premium to be paid nor the period for which the property was to be insured was ever agreed upon, and the inference is irresistible that respondent never intended tO' accept die policy in question, if able to attain a satisfactory adjustment of his controversy with the Aberdeen company, whose policy he secretly held pending- the negotiations for a reduction of its premium. Speaking for this court in Brink v. Insurance Association, 17 S. D. 238, 95 N. W. 930, Judge Haney said: “A contract of insurance is not complete without a meeting of the minds of the parties in respect to the following particulars: The sum to be insured, tire time when the insurance is to begin and terminate, the subject to be insured, and the consideration.”

Such uncontroverted proof of no mutuality or meeting of minds as to the premium, the period of'insurance, and the amount of concurrent insurance would defeat an action by the company to recover the $30 which it promptly returned to respondent upon learning of the fire, and which before the loss respondent had repeatedly refused to pay.

Upon the facts and circumstances disclosed by the record, respondent was not entitled to recover, and the judgment appealed from is reversed.