Farmers' Mutual Fire Insurance v. Hull

Robinson, O. J., delivered the opinion of the Court. The simple question in this case, is whether the plaintiff is entitled to recover on a fire policy issued by the-' ⁵⁰¹ •defendant, the damage sustained by him in the loss of his barn and its contents by lire. The defendant denies its liability because of the breach or forfeiture of the policy by the plaintiff. About a year before the lire, the plaintiff bought a portable steam engine, and stationed it 'within thirty feet of the rear or west eud of the barn.

The engine was connected by means of a strap and pulley to a chopper inside of the barn, and was used for the purpose of chopping and threshing grain. The fire was discovered about four o’clock in the afternoon, in some fodder stacked, against the side of the barn. The plaintiff had used the engine till about one o’clock of the day of the fire, in chopping grain for his cattle, and the fire in the grate of the engine was still burning when the neighbors got to the premises. It was conceded in the argument, or, if not conceded, the use of the engine, under the circumstances, without the permission of the defendant, was beyond all question a forfeiture of the policy.

Rut the plaintiff’s contention is, that the forfeiture was waived by the defendant. It was waived ho says, because the defendant subsequently, and with full knowledge of the forfeiture, levied an assessment on his premium note, and this assessment was paid by him. It has been held in some cases, and properly held, that an assessment made on a premium note with knowledge of the forfeiture of the policy and the payment of the ■assessment by the insured will be considered as an implied waiver of the forfeiture. It will be so considered because an assessment thus made is altogether inconsistent with an intention on the part of the insurer to treat the policy as being forfeited, and relying upon this implied intention, the insured was induced to pay the assessment, and which otherwise he would not have paid.

The insurer cannot treat the policy as a valid ⁵⁰² and binding contract for one purpose, and invalid f'or other purposes. The whole theory of implied waiver, so far as it applies to cases of this kind, is based upon some act or contract on the part of the insurer inconsistent with an intention to insist upon or claim whatever rights he-may have acquired by reason of the forfeiture, and the-insured, relying upon this implied intention, has been induced to do some act to his prejudice or injury. But it does not seem to us, that the assessment made-by the defendant, considering all the circumstances under which it was made, was in any manner inconsistent with an intention on its part to rely upon the breach or forfeiture of the policy; nor does it seem to us, that the-defendant was in any manner induced to pay the assessment upon the faith that the defendant did not mean to-rely upon such forfeiture. We are dealing with a policy issued by a mutual insurance company, the business of' which was, by its charter, confined to the limits of Carroll County.

Instead of the annual