193 Ky. 7 | Ky. Ct. App. | 1921
Affirming.
In 1911 the Delaware Insurance Company of Philadelphia and the Reliance Insurance Company each issued to J. B. Haggin, of Lexington, a policy of fire insurance for $4,000.00, upon a three-story brick metal roof build-. ing, located at No..121 East Main street, Lexington, Kentucky, for a term of five years from December 27th of said year. The first floor of the building insured was occupied as a retail store. Later Haggin transferred the property to the appellee, Berryman Realty Company and this company acquired additional ground at the rear, upon which it erected a theatre building, joined to the insured- building, the whole constituting the Ben Ali Theatre. The first floor of the old building was used as an entrance to the theatre. The two policies of insurance issued by the Reliance Company and the Delaware Company for $4,000.00 each were transferred by Haggin to the Berry-man Realty Company .about the same time that, the three story building at 121 Main street was conveyed to said company. Soon after the completion of the theatre the Berryman Realty Company obtained additional insurance upon the entire building, which insurance was written by the ten following companies: Henry Clay Fire Insurance Company, Insurance Company of North America, Hartford Fire Insurance Company, Aetna Insurance Company, Insurance Company of the State of Pennsylvania, U. S. Fire Insurance Company, Old Colony Insurance Company, Milwaukee Mechanics Insurance Company, Imperial Insurance Company and Fireman’s Insurance Company, and this insurance, with that already issued by the Reliance Company and the Delaware Company above mentioned, totaled $79,000.00.
Appellee, Security Trust Compny, held a mortgage against the entire theatre property, including both the old and new buildings, and all of the policies of insurance contained a provision that in case of loss by fire the insurance should go to the Security Trust Company “as its interest may appear.”
In January, 1916, a fire occurred in the auditorium of the theatre, causing great damage to both building and fixtures. Immediately notice of the fire was given to all of the insurance companies which had issued policies on the building. Acknowledging liability, the insurance companies selected the Southern Adjustment Bureau of Louisville as their representative for the purpose of ad
The coverage clause of these two old policies reads as follows: “$4,000.00 on the three-story brick metal roof building, including all permanent fixtures, occupied for ordinary business purposes and dwelling, situated on the north side of and known as No. 121 East Main street, Lexington, Kentucky.” As these two policies were issued some years before the auditorium of the theatre was constructed and was intended at that time to cover only the three-story brick metal roof building, then used as a retail store and office building, it is insisted by the Reliance and Delaware Companies that the liability of these two companies must be confined to such damage .as resulted from fire to the old part of the building, and this is so, unless by subsequent agreement, actual or implied, the coverage clause of the policies was extended so .as to include the addition to the building. Appellants
It is not contended that the language of the coverage clause above quoted is broad enough to include the auditorium of the theatre, which was erected after the issual of the policies, but it is insisted that the agent of the two companies who issued the policies verbally assured C. H. Berryman, president of the Berryman Realty Company, that the policies covered and included the entire theatre building, and further that the companies are now es-topped to deny liability because they did not cancel their policies, although the said contract contained a clause reading: “If mechanics be employed in the building, altering or repairing the within described premises for more than fifteen days at any one time ” the policy shall be void. The only evidence to support the contention that the agent of the companies by verbal agreement extended the coverage clause was given by Hugh W. Young, one of. the adjusters, and by C. H. Berryman, president of the realty company. The witness Young testified:
“Mr. Berryman said that the insurance was left to Mr. Irvine, that the writing of the insurance was in the hands of Mr. Irvine, and that the policies were supposed to cover the Ben Ali Theatre. I then asked Mr. Irvine why he did not reform the two policies to make them concurrent with the other, and he said that he was too busy to make all the endorsements that the companies required and that the policies were all right and covered the theatre building. ’ ’
Mr. Irvine was agent of both the Delaware and the Reliance Insurance Companies at the time of the issual ■' of the policies and at the time of the fire. The testimony of C. H. Berryman on this point is as follows:
‘ ‘'When the Ben Ali Theatre was erected, which materially increased the value of the property covered by these policies, it was necessary for us to increase the insurance, and the new insurance, together with the amount represented by these two policies, was considered suf*11 ficient to protect onr interests. It was, therefore, onr understanding before the fire and after the occurrence of the fire, that these policies were automatically extended to cover the entire property at this location owned by the Berryman Realty Company. In fact the point involved herein was raised during the process of the adjustment, and the agent of the companies, Mr. Irvine, was present and made the statement that it was understood by the two companies named that the theatre portions of these buildings were included in the coverage of these policies.”
There are two general classes of coverage clauses employed in policies of fire insurance. The one copied above is a fair sample of the first class and is not intended to cover additions or alterations made to the insured building after the issual of the policy. The coverage clause contained in the ten policies issued to the Berry-man Realty Company after the erection of the theatre is of the second class and reads:
“On the three, two and one story brick, metal and gravel roof building, the contents and communicating additions, including all permanent fixtures for heating and lighting the building occupied and known as the Ben ,A1i Theatre, situated on north side of and known as 119-121 East Main street, Lexington, Kentucky.” This clause does cover all communicating additions like the auditorium to the old structure.
It is a rule not denied anywhere that a policy of fire insurance does not cover additions made to an insured building unless the contract so provides. Northwestern Fuel Company v. Boston Insurance Company, 145 N. W. 515.
It is admitted that there was no written agreement extending the coverage clause of the old policies or any modification thereof in writing. There is nothing in the evidence quoted which is inconsistent with the written terms of the coverage clause of the policies issued by the Delaware and Reliance Companies and in the absence of clear and positive evidence of such modification or alteration of the written contract, courts are not authorized' to extend, modify or change the plain and unambiguous terms thereof. We, therefore, conclude that the coverage clause of the two policies issued in 1911 by the Delaware and Reliance Companies was not intended to and did not, in fact, cover or include that part of the building which was erected some years after the policies were issued, and that the alleged statements of the agent were
It is next insisted that the payments made by the various insurance companies which are now appellants and others to the Berryman Realty Company after the adjustment had been made were accepted by the said Realty Company in full discharge of all liability on the part of the respective insurance companies. At the time the payments were made by the insurance companies a written receipt was taken by each company from the Berry-man Realty Company and the Security Trust Company, for whose benefit the insurance was issued, which receipts, except for the name and slight modifications, read as follows:
“Received of Old Colony Insurance Co., of Boston, Mass., A. D. Baker & Co., Managers, Lansing Michigan, March 8,1916, the sum of seventy-three hundred and forty-eight and 10/100 dollars, being in full payment and compromise settlement of all claims and demands for loss- or damage which occurred January 11th, 1916, to the property insured under policy No. 379620, issued at Lexington. Kentucky, agency of said company, in consideration of which said policy is hereby reduced to $4,651.90.”
Mr. Berryman testified in substance that at the time he received the drafts from the insurance companies and executed the receipt which is copied, the same was done with the specific and distinct understanding that if the apportionment was found incorrect it would be corrected. This evidence is supported by other witnesses. Mr. Irvine'- testified:
*13 “Berryman didn’t want them to sign the papers under that kind of agreement and they told him, they said: ‘¥e don’t want to keep you out of your money; if it doesn’t make any difference, if it is not correct, it will have to be made correct.
* Q. What, did Mr. Berryman say in response to that ¶?
“A. He said that was the only way he would sign it, he would accept it in that way; he said he had been watiing for the money, he needed it because he wanted to go ahead on the repairs.”
On cross-examination Mr. Irvine was asked this question:
“Q. I believe you had already said Mr. Berryman made a statement. What was that, repeat that?
“A. He needed the money, was being held out of the money, he needed it badly, wanted to go ahead with the repairing; they told him they didn’t want to hold him out of his money, they guaranteed that this apportionment was correct; if it wasn’t correct, these companies would all have to come back and pay the difference.
“Q. Make it correct?
“A. Yes, sir, make it correct; that is exactly what they said.”
The witness Miss Harrison was asked this question:
“Q. Did Mr. Berryman make any statement to Mr. Brock and the other adjusters there present to the effect that he would not accept the amounts from any of the companies unless the entire amount agreed to be paid was made good?
“A. Yes, Mr. Berryman made that statement.”
Then Miss Harrison was asked:
“Q. Miss Harrison, do you recall at the time you delivered the draft to Mr. Berryman any statement that. Mr. Berryman made to you?
“A. Mr. Berryman stated to me various times, Mr.. Hunt, that it was understood with the adjusters that in' accepting the settlement that they were .first making, that he did not waive any claim that he might have against the companies for the adjustment of the disputed amount.
“Q. Did he make -that statement to you at the time: you delivered the draft to him?
“A. As far as my recollection serves me, he did.”
As all the insurance companies acknowledged liability on account of the loss to the theatre by fire but one thing
The principle is well stated in the case of Mannakee v. McCloskey, 23 Ky. L. R. 515, where we said:
“And the doctrine is well settled in this state that the acceptance of a part of a debt due and payable in satisfaction of the whole debt does not operate as a bar to the recovery of the residue; for the debtor being under the obligation to pay the whole debt at the time and the creditor being entitled to receive the whole, agreement that a part shall be satisfaction of the whole is an agreement without consideration and cannot be enforced either in a court of law or equity. See Jones v. Bullitt, 2 Litt. 51; Stringfellow v. Williams, 6 Dana 237. It follows that there was no consideration for appellant’s agreement to surrendered the balance due her under the contract of No*15 vember 1, 1895, and the court should have given her a judgment for the amount found to be due by that contract, subject to a credit of $1,200.00.”
There was no consideration passing’ from the insurance companies to the Berryman Realty Company sufficient to support an agreement on the part of the Realty Company to accept a paid of the debt due it in full satisfaction of the entire claim unless prepayment of the sum due be so considered and this will be adverted to later. The evidence clearly shows that Berryman, the president of the Realty Company, refused to accept the drafts of the insurance companies except on condition that if the apportionment was incorrect or the Reliance and Delaware held not liable, a new apportionment would be made among the companies liable and the full balance paid by the insurance companies to the Realty Company. No one claims any agreement was actually entered into whereby the partial payment was to be in full accord and satisfaction except what is shown by the written receipt. The prima facie case shown by the receipt is entirely overcome by the evidence showing that the receipts were given with the distinct understanding that the amount received was not in full unless the Reliance and Delaware Companies paid the amount assessed against them by the adjusters. It is a principle well recognized that nothing can be regarded as consideration which is not so considered by both parties*to the agreement.
As the insurance money was paid and receipt taken before the same was due it is insisted by appellants that such payment is sufficient consideration to support the agreement; but it has been held otherwise by the Supreme Court of the U. S. in the case of Fire Insurance Co. v. Wickham, 141 U. S. 584, where that court said:
“But assuming that the receipts upon their face show a complete settlement of the entire claim for one-half the total amount, what was the consideration for the release of the other half? The only one that is put forward for that purpose is that payment was made five days after proofs of loss were furnished, or fifty-five days before anything was actually due by the terms of the policy. That prepayment of part of a claim may be a good consideration for the release of the residue is not disputed, but it is subject to the qualification that nothing can be treated as a consideration that is not intended as such by the parties. Thus in Philpot v. Gruniger, 14 Wall 570, 577, it is stated that nothing is consideration that is*16 not regarded as such by both parties. ‘To constitute a valid agreement there must be a meeting of minds upon every feature and element of such agreement, of -which the consideration is one. The mere presence of some incident to a contract which might, under certain circumstances, be upheld as consideration for a promise, does not necessarily make it the consideration in that contract;’ ”
It is lastly but earnestly insisted by counsel for appellants that the trial court erred in sustaining a demurrer to the third paragraph of the answer, which is a counterclaim for $4,254.62 claimed to have been paid by mistake of the defendants, insurance companies, to the plaintiff, Berryman Realty Company, on account of alleged injury to certain brick walls of the building damaged by fire. The pleading avers that, “in the ascertainment of the damage and loss on said insured building, the plaintiffs represented to these defendants and to 'the adjusters representing them in making up said loss proofs, that the walls of that part of the said building inclosing three sides of the stage were a total loss; that these defendants denied said claim, but that the plaintiffs represented to these defendants that the board of commissioners, acting through the commissioner of public safety, had condemned said walls as unsafe by reason of said .fire, and that consequently they would have to be torn down to their foundations. Said representations were made by the plaintiffs intending these defendants to rely on same as true, and they, not knowing otherwise, believed it was true. And these defendants settled and paid said loss, including the estimate based upon the fact that said walls were condemned because of damage by said fire and would have to be torn down. ” The pleading further avers that after the payment of the money the defendants discovered that the walls were not damaged as represented by the plaintiffs, and were not condemned by the public authorities of the city of Lexington, nor torn down; that the defendants paid the money relying upon the representations of the plaintiffs that the walls were so damaged as to be of no value, and in making said payments and settlement of loss they took into consideration and settled upon the assumption that the statements of the plaintiffs regarding the damage to the said walls were true, when in truth and fact they were not so. It will be observed that while the pleading avers that the representations were made to the adjusters into whose hands
The judgment is affirmed as to the Old Colony Insurance Company, and the motions for appeal made by the Henry Clay Insurance Company, Aetna Insurance Company, Hartford Fire Insurance Company, Milwaukee Mechanics Insurance Company and the Imperial Assurance Company are denied and the judgments affirmed.