WILLIAiIlb V. llU."FALO GEHMAN INS. CO.
BUFFALO GERMAN INS.
(Circuit Court, D. Kentucky.
-BOND Fon UONVEYA)lCE.
February 19, 188&)
INSURANCE-SOLE OWNERSHIP OF PnOrERTy-OUTS'UNDING INTEREST
A policy of fire insuranr'e described the property insured as "his two-story dwelling-house," etc" and it appeared that he had purchased the fee and taken: a bond for a conveyance. but that the vendor had only a .life estate in the property, with a remainder in six-sevenths thereof; that a suit had !Jeen instituted to perfect the title, to which the insured was a party; and that there was an outstanding purehase note, which he owned at the time of the ance and the loss, Held, that the outstanding note, and the fact that the insured only held under a title bond, was not material to the riek, and that the fact of the outstanding seventh interest or remainder did not prevent him from being" rne sole and unconditional owner," within the meaning of the policy.
SAME-llIATERIALITY OF DEFECT IN TITI.E-QnESTION Fon JURY.
In such a case the question whether the defect in the title or interest of the insured was material to the risk should have been submitted to the jury, and the peremptory instruction to the jury to find for him was error.
Motion for new trial.
BARR, J. I gave the instructions for plaintiff on the trial of this (Jase, and I am glad a motion for a new trial has been entered, as it gives an opportunity for the examination of the authorities, and a. more mature consideration of the questions upon which the case turned. The material facts are not in contloversy, and, if I remember them, they are briefly these: No previous written application for insurance was made by plaintiff, and at the time he insured he was in the possession of the property insured, claiming the absolute ownership thereof. He had purchased a fee-simple title, and held a title bond for a conveyance with covenant of warranty. There was an outstanding purchase note, which he owed at the time of the insurance and at the time of the loss. At this time there was a defect in the title of the vendor, Mrs. Perkins. She had a life estate in the property, and had obtained from her children their interest, except one of them, who held an undivided one-seventh in the remainder after the death of Mrs. Perkins. There was pending in the McCracken circuit court a chancery suit at the this insurance was obtained. Williams was a party to this litIgatIon, and its object was to perfect Mrs. Perkins' title so that he might obtain from her a perfect title. The poliny dethe property insured as plaintiff's: "His two-story frame dwelllUg-house and ell." There was no other statement as to title and ownership; and as the policy provides that the assured, by the acceptance of this policy, warrants that he, among other things, has not ".omitted to state to the company any information material to the risk," the learned counsel insists that the omission to state to the company the outstanding vendor's note, and that he only held
Yeise1' It "Moss, for plaintiff. Gilbert It Reed, for defendant.
under a title bond, was and is fatal to his contract of insurance. The outstanding note, and the fact that plaintiff's title was evidenced by a title bond instead of a deed, were not material to the risk, since the loss to the assured would have been equally as great as if his title had been a legal instead of an equitable one, and the note had been paid instead of being unpaid. It will be observed that the assured was not asked as to the evidence of his title, nor did he warrant against incumbrances. The defect of title, the outstanding oneseventh interest in the remainder, which the assured had notice of, I will consider nnder the next defense. There is a provision of the policy which provides that it shall become void unless consent in w.riting is indorsed by the in each of the following instances,
"If the assured is not the sole and unconditional owner of the property; or if any change takes place in the title, interest, location, or possession of the property, * * *- whether 1.>y sale, transfer, or conveyance, in whole or in part, or by legal process, or 1.>y jUdit'ial decree; or if the title
or possession 1.>e now, or shall hereafterbecome, involved in litigation."
This is rather awkwardly expressed, but I presume the meaning is that if the assured is not sole and unconditional owner of the properly insured, or if the title or possession of it is involved, or shall thereafter become involved, in litigation, it must be consented to, and consent indorsed in writing by the company. I am inclined to the opinion that this does not require the assured to guaranty his title, but only requires that he hold, claiming a sole and uncondi· tional ownership. If this is not the correct construction, then every one accepting such a policy thereby warrants his title to be perfect. 'rhose who insure against firo" and other losses are interested in kno\\ing who is in possession of the property insured, and upon whom the loss would primarily fall if there were no. insurance, and hence are interested in knowing whether the assured is holding as a sole and unconditional owner. The character of his possession and holding is the matter of interest to the insurer, and not his paper title. We should give a reasonable construction to the language of this contract, and, in ascertaining what is a reasonable construction, the purpose and object of the contract should be considered. The plaintiff had purchased a sole and unconditional ownership, and was in possession under that purchase. The fact that his vendor, although claiming a fee-simple title, had in law only a life estate and six-sevenths of the remainder, does not, I think, prevent plaintiff from being t.he sole and unconditional owner of the property, within the meaning of this provision of the policy. If the assured are expected not only to state the extent of their interest in the property sougbt to be insured, but to guaranty a perfect title, under penalty of losing the benefit of their insurance, tbe language should be clear and explicit, so that the assured may understand it. The authorities are in some conflict upon this subject.
GERMAN INS. CO.
The supreme court, in Ills. Co. v. Haven, 95 U. S. 245, held that an outsta-nding lease for 10 years was not a violation of an agreement that the assured had the "entire, unconditional, and sale own· . ership of the property." In Hough v. City Fire Co. 29 Conn. 10, the court held that the word "absolute" in such a provision in the policy was synonymous with "vested." In that, case the policy provided that "if the interest in the property to be insured be a leasehold interest, or other interest not absolute, it must be so represented to the company, and expressed in the policy in writing, otherwise the insurunce shall be void;" and the facts were that the assured was in possession under a parol agreement to purchase. The assured recovered for his loss. In Wincland v. Security Ins. Co. 53 !\fd. 276, the policy provided that if the assured was not "the sole and absolute owner of the land on which the building should stand by a title in fee-simple," the same should be stated and inilorsed in writing, else the policy would be void. 'rhe assured had entered under a parol gift from his uncle, who was the fee-simple owner, and had made improvements on the land, and the court held he could not recover. Much stress was laid upon the words "by a title in fee-simple." In American Baskct Co. v. Farmville Ins. Co. 3 Hughes, 251, the assured had only an equitable fee, and it had been stated in the application that the title was in the assured; still a recovery was had, although the policy, like the one at bar, required the assured to be the "entire. unqualified, and sole owner." In JVasllington Mills AI. Co. v. Commercial Fire Ins. Co. 13 FED. REP. 646, the policy provided that "if the interest of the assured in the property be any other than the entire, unconditional, and sole or ownership of the property for the use and benefit of the if the buildings insured stand on leased ground, it must be so represented to the company, or so expressed in the written part of the policy, otherwise the policy shall be void." The land had beeil sold by the assured before obtaining the policy, but in the conveyance the assured had reserved the right to remove the buildings within a. certain time, and if not removed within that time they were to be the purchaser's. Those buildings were insured and destroyed during the time within which assured could remove them. Held, he could recover for the loss of the buildings. In Waller v. Northern Co. 10 FED. REP. 233, the policy provided as in Washington Mills, etc., v. Ins. Co., supra, and the finding of the jury was that the assured was simply a mortgagee with a debt of $5,000, and that the property assured was worth $8,000 or $9,000. The assured held by an absolute. unconditional title, although in fact he was only a mortgagee. The court held that there could be no recovery, because the assured's true interest was material to the ris1r, and should have been communicated to the insurer. v.17,110.1-5
FEDERAL REPORTER, . - .
In Rumsey Phamix Ins. Co. 1 FED. REP. 396, the prOVl8l0ns of the policy were like those in the policy sued on, and the court uses this very pertinent language to the case at bar:
"A party in possession of insured premises under a valid subsisting CO;}tract of purchase is equitable owner, and has an insurable interest, although he has not paid the whole consideration money. He is not guilty of a misrepresentation if he represents the house as his when he applies for insurance, and there is no breach of warranty if the house is described as his dwellinghouse in the policy. The statement and the state of facts are consistent with each other; there is no misrepresentation, because an intent to deceive cannot be inferred; there is no breach of warranty, because the representation is t1'tle in substance."
It is insisted that the plaintiff's title was, at the time of the insurance, "involved in litigation," and therefore he should not recover. There was a litigation in which plaintiff was endeavoring to perfect his title, but the outstanding one-seventh interest could not have been recovered from him, as that interest did not accrue until the death of the mother,who was plaintiff's vendor. The chief purpose of the chancery suit was to have the property which plaintiff exchanged for the property insured take the place of that property. "Involved in litigation" means, in this connection, a litigation in which there could be a recovery of the assured's title in part or in whole. I do not mean that the litigation should show that there would be a recovery against the assured, but only that the litigation should be of such a character that there might be some recovery against him. Thus, to illustrate, suppose a party held by title bond, and was entitled to a deed, and was suing to get tho legal title out' of heirs or others, and the suit was of such a chartwter that in no event could there be a recovery against such a party, this would not be a litigation involving the title of such party within the meaning of this policy. In this case the daughter of Mrs. Perkins could in no event have recovered of Williams anything, because her interest was that of a remainder-man, subject to a prior life estate, which was owned by Williams. The views indicated on the trial, after a careful consideration. are still adhered to; but I am inclined to think error was committed by a peremptory instruction to the jury to find for plaintiff. It may be that the jury would have found that this defect in the title and interest of plaintiff was a fact material to the risk, and as plaintiff knew of it, he should have communicated it to the defendant. This question should have been left to the jury. I shall, therefore, grant defendant a new trial, amI it is 80 ordered. The costs will follow the final result.
MILLER V. U::ilO::i
(Circuit Court, D. Colorado.
Negligence is the failure to use ordinary cnrl',-that is to say, such care as a pcrson of common prutlence would exercise nnder the circumstances; and where the complaint is that the plaintiff has been injured by the negligence of a railroad company, the question for the jury is, did the railroad company fail to discharge any duty it owed to the plallltiff Y
Where push cars are furnished by a railroad company to be used in transporting materials, and to be propelled by pushing, it is not negligence in the company to fail to supply them with brakes or other means of controlling their movement.
If the master, or another servant standing towards the servant injured in the relation of superior or vice-principal, orders the latter into a situation of greater danger than in the ordinary course of his duty he would have incurred, and he obeys and is thereby injured, the master is liable, unless the danger is so apparent that to obey would be an act of recklessness. ..
MASTER AND SERVANT-RESPONSIBILITY OF MASTER FOR ACTS OF VICE-PRINCIPAL.
\Vhere a master employs one servant and requires him to work under the orders of another, and gives the latter power to dismiss the former at his pleasnrc, the latter is a superior servant or vice-principal, and stands in the place of the master when acting in the scope of his powers.
HAIl,ROAD COMPANy-USAGE OR OUSTOM-USE OF PUSH OARS TO CARRY EMI'LO'ES.
IS A VICE-PRINCIPAL.
Although push cars are originally furnished to be uscd only to carry materials, yet if the company permits their use to transport workmen from place to place for such a time and so generally as to become a custom of the road, it may be held to have authorized such use.
MCCRARY, J., (charging jury.) The plaintiff in his complaint ayers that he has suffered per60ual injury by reason of the negligence of the Kansas Pacific Railroad Company, and that the defendant is liable therefor. That the plaintiff was injured while in the employ of said Kansas Pacific Railroad Company, substantially as alleged, is not disputed; but the defendant interposes three separate defenses. which it is your duty to consider. These are-First, that the Kansuf'. Pacific Railroad Company was not guilty of negligence as charged; 8econd, that the plaintiff was guilty of negligence which contributed to his injury; third, that if there was any negligence other than that ?f the plaintiff, it was the negligence of his fellow-servants engaged ill the same common service with him, for which the company is not. liable. If you find from the evidence that either of these defenses has been sustained, you will find for the defendant. If you find that neither of. them has been sustained, and that plaintiff has suffered injury WIthout negligence on his part, and by reason of the negligence of
From the Colorado Law Reporter.