Capital City Insurance v. Caldwell Bros.

STONE, 0. J.

All men know that, in cities and towns, business bouses generally, and residences frequently, are constructed in such close proximity, that tbe loss of one by fire endangers others. It is on this account that fire-insurance companies, in placing their risks, take into tbe estimate wliat are called tbe exposures, and regulate tbe premiums they charge for insurance in reference thereto. So, if tbe braiding proposed to be insured be very valuable, and tbe sum to be insured be large, it is not customary to place tbe entire risk in one company, but in several. íhis, because if loss is suffered (and losses will be suffered), the burden will be distributed among many companies, and not left entirely to one, which it might crush. And when many buildings are so nearly connected, one with the others, as that the burning of one of them would be likely to set fire to the others, it is neither customary, nor in accordance with business principles, to insure them all in one company. And this, at last, is but carrying into practical operation the economic philosophy of insurance — the helpful participation and aid of the many in sharing the loss which casualty casts on one. A loss of ten thousand dollars might bankrupt one trader, while, if it were distributed among a hundred or more, it would scarcely be felt. In theory, all the premium-payers contribute their several contingents, which collectively make up the sum to be paid. This is the rationale of insurance.

The Home Protection Insurance Company had its business office in Huntsville, Alabama. The Capital City Insurance Company had its habitation in Montgomery, Alabama. The iormer was the Huntsville agent of the latter. This is not uncommon. It furnishes to insurance companies the opportunity, when large insurance is sought, or when application is made for insurance of two or more buildings, or their contents, which are situated in one block, or in dangerous proximity to each other, to distribute the risk, and thus escape an individual, heavy loss, which, if it fell on one company, might be very disastrous to its business aims.

The foregoing reflections are common knowledge. We have given expression to them, because, in our opinion, they shed light on several questions which the record before us presents for our decision. They tend to explain why it was that the storehouse, the subject of insurance in this case, was insured in tbe Capital City Insurance Company; and wby it was that tbe agent of tbe Home Protection Company was tbe agent or person tbrougb wbom tbe insurance was obtained. Tbe Home Protection Insurance Company, being a corporation, could not act as tbe agent of tbe Capital City Company, otherwise than tbrougb its officers or agents. Corporations can not act in any other way.

Caldwell Brothers were merchants, having their place of business in Scottsboro, Alabama, not far from Huntsville. Stuart, a resident of Scottsboro, was tbe agent at that place of tbe Home Protection Insurance Company. Tbe Capital City Company bad no agent ad that place. Tbe Home Protection was tbe Capital City’s agent at Huntsville. Caldwell Brothers bad obtained insurance on their stock of merchandise, and they made application to Stuart for insurance on the storehouse. We have no doubt that tbe preparation of tbe written application was largely participated in by him. Such is tbe usual custom. Tbe merchandise insured in tbe Home Protection, being in tbe storehouse on which tbe insurance was sought, tbe burning of either would be apt to involve tbe destruction of tbe other. Hence tbe reasonable desire that two risks should be assumed by different companies, in order that, if loss ensued, it should not fall entirely on one company. We think we are in safe bounds when we suppose that when Caldwell Brothers applied to Stuart for insurance on tbe storehouse, tbe latter preferred tbe risk should be assumed by tbe Capital City Company, rather than that tbe double loss should fall on one company, in case of its destruction by fire; and that it was at bis instance the policy was taken in tbe Capital City Company. Tbe circumstances of this case furnish ample evidence from which tbe jury could infer that Stuart was tbe authorized agent of tbe Capital City Insurance Company, in receiving and forwarding tbe application. And if there were doubt of this, tbe conduct of tbe Capital City tbrougb its agents, after tbe fire, furnishes circumstances tending to show a ratification of tbe issue of tbe policy in this case. These, however, were questions for tbe jury. There was no error in receiving testimony of Stuart’s agency in receiving and forwarding the application for insurance in this case, nor of any other act done by him, bearing on tbe merits of tbe present controversy.

When tbe application was made for insurance in this case, tbe general questions were propounded, and answered by one of tbe Caldwell Brothers. One question propounded was, “Have you fee-simple title?” Tbe answer was, “Tes.” One danse of tbe application is in tbe following language : “Said answers are considered tbe basis on wbicli insurance is to be effected, and tbe same is understood as incorporated in, and forming a part and parcel of tbe policy, as well as tbe warranty of tbis applicant.” A question was raised on tbe trial as to tbe title held by Caldwell Brothers in the lot on which tbe storehouse stood, and as to tbe manner of proving that title.

Tbe complaint filed by plaintiffs consists of a single count, which is a substantial copy of Form 13 of tbe Code, p. 792. Tbe case was tried on issues raised by four pleas. Tbe first plea is a general denial of tbe averments of tbe complaint. Tbe others are special pleas, but neither of them specially raises tbe question of title. One of tbe plaintiffs, while on tbe witness stand, was asked as to tbe ownership of, and title to tbe lot on which tbe storehouse stood. He testified that tbe building belonged to himself and brother — Caldwell Brothers. In tbe cross-examination tbe following questions were asked, and answers given: Q. “You and your brother owned it ?” (tbis storehouse.) A. “Yes. Snodgrass and I built it, and then my brother took bis place.” Q. “Did you do it in writing ?” A. “No.” Q. “From whom did you buy tbe lot?” A. “A man named Hugh Bynum.” Q. “Did be make you and Snodgrass a deed for it ?” A. “I dont remember. I gave him a horse for tbe lot. Snodgrass sold bis interest to my brother George.” Q. “Was that contract in writing between Snod-grass and G. B. Caldwell ?” A. “I am not certain. I think it was.” Q. “Have you tbe paper with you?” A. “No.” Q. “Where is it?” A. “I reckon it is at home, or destroyed.” Q. “What is your best recollection about it?” A. “I know that when we traded for tbe accounts, there was a written contract between Snodgrass and myself, but as to tbe lot, I dont remember whether there was or not.” Q. “If there was any deed made, you do not know it?” A. “So far as tbe bouse and lot were concerned, I could not say whether there was a scratch of tbe pen.”

Tbe foregoing is substantially all tbe evidence bearing on tbe question of ownership in, or title to tbe lot on which tbe storehouse stood. The defendant corporation asked charges based on tbe question of title. One of them is in tbe following language : “It is not shown in tbis case that the plaintiffs bad tbe fee-simple title to said property so insured; and for tbis reason they can not recover in tbis case, and tbe verdict of tbe jury must be for the defendant.” There was an exception reserved to tbe refusal to give tbis charge. There had also been objection and exception to Caldwell’s testimony, that the building belonged to himself and brother.

In a suit at law founded directly on land-ownership, nothing less than what the law calls a legal title will sustain the action. Either a paper title, ten years adverse enjoyment, or something equivalent, must be shown. But this suit does not bring the title to the property directly in issue. It is not necessary that the complaint shall aver a title. That question comes up collaterally and defensively. Ownership is a material factor in assuming insurance risk on improved real estate, but 'not because the evidence of the ownership is considered. The extent of the ownership is the important element of inquiry. This, because the law, voicing common experience, presumes that the absolute owner of property will be more watchful of its preservation, than would a mere tenant, or one owning only a partial interest. And this watchfulness would be scaled, not by the form of the title, but by the extent of ownership. One owning a perfect equity in improved real estate would feel the same solicitude in preserving it, as he would feel if he held the legal fee.

In Phoenix Insurance Co. v. Browder, 67 Miss. 620 — s. o., 19 Amer. St. Rep. 326 — the defense attempted was the same as that relied on in this case. True, there was some writing in that case, but it fell short of creating an estate in fee simple. The court said: “What is meant by the words “absolute fee-simple title” in this connection? It can only mean that the assured did not have a limited interest in the property, but that he claimed and held under a deed of conveyance, or other evidence of title, purporting to invest them with an estate in fee simple. It can only mean that the assured held under a paper title conferring on them this sort of estate, as contradistinguished from any limited and inferior one. The reason for this distinction is obvious. The insurer will not deal with, nor take the great risk of indemnifying against loss and damage, a mere tenant, lease-holder, or other person claiming and having only some qualified interest in the property; but this contract for indemnity will be made only with the person having the title — the beneficial owner — the person having the absolute, i. e., the vested, as opposed to the contingent or conditional title.”

True, in the case from which we have quoted, there was some sort of paper title, but it did not convey the fee. It did not come up to the letter of the representation made in tbe application. It would not liave supported an action of ejectment for tlie property. But we can not suppose tbat the court rested, or intended to rest its judgment, on the fact that there was a paper. The true ground of the decision is expressed in the declaration by the court, that “It [the assertion that the assured had a fee-simple title | can only mean that the assured did not have a limited interest in the property.” We fully approve the following language of the Mississippi court, found in the opinion from which we have been extracting: “By the insertion of those words [fee-simple title] in the condition of its policies, can it be successfully maintained that the insurance company meant that every loss occurring under its policies, in which the assured should be unable to show a title indefeasible and good against the world — a title free from every defect, real or seeming, and on which not the smallest cloud rested— should be borne by the assured? To tolerate such an opinion would be equivalent to holding that the company had deliberately set a trap to ensnare the simple-minded and unwary. . . . We can not believe that any honestly directed and fair-dealing company will deliberately undertake the management of its business on such basis.”

In the case before us, we can not know what the true state of the title was. The pleadings had given no notice that any question would be raised on the title to the lot on which the storehouse stood. The main issue raised.by the pleadings was, whether the storehouse had been destroyed by fire, in such manner as to fix a liability on the insurance company therefor. As we have said, the extent of ownership held by the assured in the building was the material inquiry, because such interest stimulates solicitude and watchfulness in its preservation. The interest, not the evidence of it, is the stimulus. We find no error in the rulings of the court on the question of the ownership of the property, or the testimony by which it was established.

Questions were raised on the sufficiency of the proofs of loss. We are not informed precisely what the proofs were. After they were furnished, the adjuster visited the premises, and made and submitted an estimate of the cost of rebuilding. It is not pretended that, either at that time or before, he made any objection for the want of timely notice of the loss, or that he complained of the insufficiency of the preliminary proofs, except on a single ground, which we think was untenable. The main objection he urged, when he visited the place, had reference to the counters and shelving, to bee onsidered further on. This, under all the authorities, must be regarded as a waiver alike of notice of loss, and of the insufficiency of the preliminary proof.' — Fire Ins. Co. v. Felrath, 77 Ala. 194; Badger v. Glenn Falls Ins. Co., 49 Wis. 389; 7 Amer. & Eng. Encyc. of Law, 1054; 11 Ib. 341; Central City Ins. Co. v. Oates, 86 Ala. 558-68-9; Com. Fire Ins. Co. v. Allen, 80 Ala. 571.

The claim for the counters and shelving, testified to have been burned with the building, presents the only remaining question we need consider. The testimony is that they were framed and built with the building, and were not movable fixtures. They were not named separately, and were not insured, unless they constituted a part of the storehouse. The primary meaning of the word fixture- is, “that which is fixed or attached to something as a permanent appendage.” In law it takes a wider range. Anything fixed or attached to a building, and used in connection with it, is a fixture, whether it be a permanent appendage or not. Hence, in legal jurisprudence, there are movable fixtures and immovable fixtures. Whenever the appendage is of such a nature that it is not part and parcel of the building, but may be removed without injury to the building, then it is a movable fixture, and is a chattel. It is no part of the realty, and does not pass with a conveyance of the freehold. If, however, it be so connected with the building as that it can not be severed from it without injury to the building — a disturbance of its rounded completeness- — then it is part of the realty, and it passes with the conveyance of the soil. Of course, these principles apply only when there is no agreement of parties varying these legal intendments. — 8 Amer. & Eng. Encyc. of Law, 43, 61; Rapelje & L. Law Dictionary; O’Brien v. Kusterer, 27 Mich. 289 ; Tillman v. DeLacey, 80 Ala. 103, and authorities cited. It is manifest that, in this case, if the only testimony on the question be believed, a conveyance of the freehold would have carried with it the counters and shelves.

The insurance company had a printed form of application for insurance. The one made and used in this case has been sent up for our inspection. It contains many questions to applicants, so framed as to suit the various kinds of property, of which insurance against loss by fire is sought and obtained. The applicant is required to answer such of the questions as are applicable to the insurance risk he seeks. In this instance, the applicants sought insurance on a store building, which they valued at $2,300. The insurance obtained was $1,500. This is the only item of property to which any answer was made, although the form contained a blank for “counters, shelves and drawers.” Neither the policy nor the conditions annexed to it make any reference to these fixtures, but a pen-dash indicates that that question, together Avith many others, was regarded as immaterial. We hold the proper inquiry for the jury was, whether the counters and shelves were movable or immovable fixtures. If the former, they were not insured. If the latter, they were part of the storehouse, and Avere covered by the policy.

We need not apply these principles to the charge given, nor to the various charges refused. In none of its rulings did the Circuit Court err.

Affirmed.

Walkee, J., not sitting, having been of counsel.