193 P.) ment is that all that appellant did with reference to the ordering and receiving of the switches from respondent was done by it only as agent of the Emergency Fleet Corporation, and that respondent knew at all times that appellant was acting in the matter only as such agent; the theory of counsel being that this results in respondent having no legal claim against appellant as purchaser of the switches, but that respondent must look to the Emergency Fleet Corporation. Appellant's counsel do not argue or seek to demonstrate that appellant was acting as agent for the Emergency Fleet Corporation, but simply assume such agency to exist, from which they argue that its legal effect is to absolve appellant from personal liability. This we think is an erroneous assumption. As we read the record it shows that appellant was not an agent of the Emergency Fleet Corporation, but was an independent contractor with reference to the furnishing of the equipment under its contract with the Emergency Fleet Corporation. Indeed the following statement of the relation between appellant and the Emergency Fleet Corporation, found in its counsel's brief, seems to us to show that appellant was an independent contractor with reference to its relation with the Emergency Fleet Corporation. Counsel says: "It is undisputed in the record that the Fleet Corporation was to furnish all of the materials that were required in the installation of the hulls in question; that requisitions would be furnished by the government for the different equipment that was purchased; that the bills for the same would be delivered to the appellant, fhe appellant would pay for the same, adding 10 per cent. to the cost thereof, and would furnish the government a statement of such costs, and the government would reimburse the appellant." by the jury is well supported by the evidence. The judgment is affirmed. MACKINTOSH, FULLERTON, MOUNT, and BRIDGES, JJ., concur. (113 Wash. 158) MYLES v. NORTHERN ASSUR. CO. (No. 15921.) (Supreme Court of Washington. Nov. 22, 1920.) 1. Insurance 646 (21⁄2)-Burden of proving affirmative defense of insured's misrepresentations on insurer. In an action on a fire policy, the claimed making of certain false representations by insured whereby the agent was induced to issue the policy in an excessive amount being a purely affirmative defense, the burden of proving it was on defendant insurer. 2. Insurance 281-Statement to agent as to worth of house not a false representation avoiding fire policy. Mere expression of the holder of a fire policy to the insurer's agent that the house was "worth about $2,000," under the circumstances and in view of Rem. Code 1915, § 6059-105, making it a presumption of fact that the agent knew the value of the house, held not a false representation avoiding the policy. 3. Insurance 281-Statute does not prevent insurer from setting up fraud inducing issuance of policy to avoid it. Rem. Code 1915, § 6059-1051⁄2, providing merely that damages suffered by insured on total loss of the insured structure shall be measured by the amount specified in the policy when it is valid and enforceable, does not prevent the insurer from setting up fraud and misrepresentations by insured as to the value of the structure inducing issuance of policy in an excessive amount to avoid the insurance contract. 4. Insurance 328 (2)-Fire policy not avoided by conveyance of insured to fiancé and reconveyance. It seems equally plain to us that respondent's relation to appellant with reference to the electric fixtures to be furnished and installed by him was of the same nature. It seems to us that it might well be decided as a matter of law that appellant was an In view of Rem. Code 1915, § 6059-34, fire independent contractor as to what it was to policy providing that it should be void if any do for the Emergency Fleet Corporation, and change other than by death of insured took that respondent was an independent contrac-place in the title of the subject of insurance tor as to what he was to do for appellant. Campbell v. Jones, 60 Wash. 265, 110 Pac. 1083. In any event the jury was fully warranted by the evidence in concluding that the switches were sold and delivered by respondent to appellant, the latter acting for itself, and not as agent for the Emergency Fleet Corporation. Other claims of error in the rulings of the trial court we regard wihout substantial merit. We are quite convinced that appellant has had a fair trial, and that the award made held not avoided by insured's conveyance to a lady with whom he contemplated marriage, who reconveyed to him 10 days later, thus revesting complete title in him. 5. Insurance 668 (6)-Whether insured concealed existence of additional Insurance from agent a jury question. In an action on a fire policy, whether or not the existence of an additional $600 of insurance was willfully concealed from the insurer's agent by insured at the time the policy in suit was issued to him, and whether or not the agent was led by insured's promise and his later silence to issue the policy in suit in the For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes belief that the $600 policy had been canceled, [ the house before issuing the policy, visited held for the jury under the evidence. Department 1. the premises, making the journey there from Aberdeen for that express purpose. He and Myles visited the premises together, the lat Appeal from Superior Court, Grays Harbor ter furnishing his automobile as their conCounty; Ben Sheeks, Judge. Action by J. F. Myles against the Northern Assurance Company. From judgment for plaintiff, defendant appeals. Reversed, and defendant awarded new trial. S. H. Steele and H. T. Granger, both of Seattle, for appellant. A. E. Cross and John C. Hogan, both of Aberdeen, for respondent. PARKER, J. The plaintiff, Myles, commenced this action in the superior court for Grays Harbor county, seeking recovery upon a fire insurance policy issued by the defendant company insuring a dwelling house owned by him near the town of Elma in that county. The issuance of the policy for $1,500 - on October 4, 1916, and the total destruction of the house by fire on May 8, 1917, before the term of insurance specified in the policy had expired, is admitted. The company set up three affirmative defenses by which it seeks to avoid liability. The case came on for trial before the court sitting with a jury, there being no issues of law or fact other than as to the company's right to be absolved from liability because of the facts set up in one or more of its affirmative defenses. At the conclusion of the trial the court directed the rendering of a verdict in favor of Myles awarding him the full amount of the policy upon motion of his counsel made in that behalf. The motion was made and granted upon the theory that there was no evidence sufficient in law to sustain either of the com pany's affirmative defenses. Judgment was rendered accordingly, from which the company has appealed to this court. In view of our conclusion that the company is entitled to a new trial because of error of the trial court in withdrawing the third affirmative de fense from the consideration of the jury, it becomes necessary for us to also notice the other defenses because of what may occur upon the new trial relative thereto. We therefore notice the affirmative defenses in order. [1, 2] The company's first affirmative de fense is in substance that Myles knowingly falsely represented to its agent that the house was worth $2,000, in order to induce the issuing of the policy for $1,500, when in fact the house was worth not to exceed $1,000, and that the agent relied upon such representation and was induced thereby to issue the policy in the excessive sum of $1,500, and would not otherwise have done SO. The agent then resided and maintained his office and agency at Aberdeen. The house being near Elma is some 20 miles distant veyance. The agent testified that he looked the house over on the outside but did not go inside, and that Myles told him it was "worth about $2,000." Just when Myles told him this he does not say. There is nothing in the agent's testimony, and there is no other, as to what Myles said about the value of the house, or indicating in the least that the agent was otherwise prevented or induced to refrain from examining the inside of the house. Myles positively denies by his testimony that he made such representation to the agent as to the value of the house, and also testified that the agent went inside the house and examined it. For present purposes though, we ignore this testimony of Myles. In view of the fact that the claimed making of such false representations and the agent being induced thereby to issue the policy in the alleged excessive amount of $1,500 is a pure affirmative defense, the burden of prov ing which is upon the company, and in view of the provisions of the Insurance Code found in section 6059-105, Rem. Code, expressly making it a presumption of fact that the agent knew the value of the house, we think the trial court did not err in deciding as a matter of law that the mere expression of Myles to the agent that the house was "worth about $2,000," assuming he made such expression, under admitted circumstances, was erroneous. [3] Contention is made in behalf of Myles that in any event the company cannot be heard to say, even upon the issue of fraud inducing the issuing of the policy, that the house was not worth more than $1,500, and that Myles made false representations as to its value. This contention is rested upon the provisions of section 6059-1051⁄2, Rem. Code, reading as follows: "Whenever any policy of insurance shall be hereafter written or renewed insuring real property or any building or structure erected thereon or connected therewith, and the property insured shall be wholly destroyed, without criminal fault on the part of the insured, in such policy shall be taken conclusively to be or his assigns, the amount of insurance written the true value of the property when insured. and the true amount of the loss and measure of damages when destroyed." We are of the opinion that this means only that the damages suffered by the insured, upon a total loss of the insured structure, shall be measured by the amount specified in the policy, when there is a valid enforceable insurance contract; and that it does not prevent the company from setting up fraud and misrepresentation by the insured as to the (193 P.) * "No other concurrent insurance permitted. of a policy in an excessive amount, for the purpose of avoiding the insurance contract. Of course, to successfully avoid a policy be- "This entire policy, unless otherwise provided by agreement endorsed hereon or added cause of fraud so grounded would require a very clear case of misrepresentation and in-hereto, shall be void if the insured now has or shall hereafter make or procure any other contract of insurance, whether valid or not, on property covered in whole or in part by this policy." ducement. [4] The company's second affirmative defense is in substance that the policy was forfeited and rendered void because of change of ownership in the property during the It is conceded by Myles that there was, at stated insurance term. It is undisputed that the time of the issuance of this policy, and on March 10, 1917, Myles conveyed the prop- at the time of the fire, a policy of insurance erty by deed to a lady with whom he con- held by Myles and the mortgagee in the sum templated marriage. This he claims was of $600, which has since been paid to his done merely to the end that she might be mortgagee. Myles seeks to avoid the effect able promptly to make a trade of the proper- of the $600 policy upon this policy by showty for certain property which they contem- ing that the agent was informed of its exisplated acquiring situated in another county.tence at the time of the issuing of this policy. This purpose, however, we regard as of little The agent testified: or no importance here. In any event, 10 days later, on March 19, 1917, she conveyed the property back to Myles, again vesting complete title thereto in him. This contention is rested upon a provision of the policy reading as follows: "This entire policy, unless otherwise provided by express agreement indorsed here on or added hereto, shall be void * * if any change other than by death of the insured takes place in the interest, title or possession of the subject of insurance." "Mr. Myles voluntarily told me that there was an agent up in Elma that had an insurance policy on the house, but he (Mr. Myles) told me that he was going to cancel that policy as he desired to have all of his insurance in one com pany. cancel that policy I could insure the place "I told Mr. Myles that if he was going to for $1,500, but if he was going to keep that policy I could only give him $900 or $1,000, as He told me, as above stated, that he was going to cancel that policy. the value of the house would not merit more. "Relying upon the statements made by him as to the value of the place, and the added improvements, I told him that we would be able to insure the house for $1,500, but the place would carry no more. "It was agreed that after Mr. Myles had can Had the fire occurred while the title to the property was thus vested in Myles' grantee, it may be conceded that his rights under the policy would now be deemed forfeited. But that was a condition of the policy the breach celed his policy in this other company for $600 of which did not exist at the time of the fire that we could insure the place for $1,500, and when Myles' title to the property was as com-I so wrote the insurance; he promising to canplete and perfect as at the time of the is-cel this other policy forthwith." suance of the policy. In a provision of the Insurance Code found in section 6059-34, Rem. Code, we read: "If any breach of a warranty or condition in any contract or policy of insurance shall occur prior to a loss under such policy, such breach shall not avoid the policy nor avail the insurer to avoid liability, unless such breach shall exist at the time of such loss under such contract or policy." This, it seems to us, is a complete answer to the contention that the rights of Myles under the policy are now forfeited because of that temporary change of ownership in the property. We conclude that the trial court did not err in holding that the rights of Myles under the policy were not forfeited by that temporary transfer of the property. [5] The company's third affirmative defense is in substance that Myles and his mortgagee had other insurance upon the house in the sum of $600 at the time of the issuance of this policy and at the time of the fire, in violation of provisions of this policy reading as follows: 193 P.-45 All of this testimony relating to the cancellation of the $600 policy is denied by the testimony of Myles, who also says that he did not know that this policy contained provisions prohibiting additional insurance, and also that the agent gave him to understand that the additional insurance would not affect this policy. This policy was not delivered by the agent to Myles until a day or two after this occurrence. It seems to us that under this condition of the testimony it became a question of fact for the jury to determine whether or not the existence of the additional $600 insurance was willfully concealed from the agent by Myles at the time this policy was issued to him, and as to whether or not the agent was led by the promise, of Myles and his later silence to issue this policy in the belief that the $600 policy had been canceled. We conclude that the trial court erred in taking from the jury the consideration of the third affirmative defense and in deciding as a matter of law that there was no evidence warranting the submission of that defense to the jury. For this error the judgment is reversed, and the defendant awarded a new trial. HOLCOMB, C. J., and FULLERTON, MACKINTOSH, and BRIDGES, JJ., concur. (113 Wash. 237) THOMPSON v. PIERCE COUNTY et al. (No. 16092.) (Supreme Court of Washington. Nov. 23, 1920.) Highways 99%, New, vol. 14 Key-No. * Series-Under resolution of commissioners, ing a road on existing route. to the electors of the county a proposition specified in the resolution, in so far as we need here notice its terms, as follows: "That Pierce county, Washington, by and through its board of county commissioners, become indebted in the sum of $2,500,000 by the issuance and sale of its general negotiable coupon bonds in said amount. * * That said bonds shall be issued for the purpose of constructing new roads and improving and aiding in the improvement of established roads within said county as follows." This is followed by separate designations of 26 roads to be constructed or improved by the expenditure of the funds to be so rais proceeds of bonds available only for improved, and of the amount thereof to be expended upon each road; the road here in question and the amount to be expended thereon being designated as follows: The county commissioners' resolution and notice of election being for issuance of $2,500,000 bonds for constructing new roads and improving established roads, "as follows, (26) $135,700 for the G. Highway" between certain points, such item of the proceeds is available only for improving the G. Highway on its existing route, and not for construction on a new line for part of the way, constituting a material departure, even if, under Rem. Code 1915, § 5101-4, the resolution and notice could have been in such general terms as to authorize this. Department 1. "(26) Approximately $135,700 for the Gig Harbor-Long Branch Highway from a point at or near the north meander corner of Sec. 6, Twp. 21 N. R. 2 E., to a point in lot 2, Sec. 24, Twp. 22 N. R. 1 E., about 900 feet southerly from the southeast corner of the plat of Purdy; thence northerly on the Purdy-Kitsap County Road on or near the west 1-16 lines of Secs. 24 and 13, Twp. 22 N. R. 1 E. to the north line of said Sec. 13." Notice of election was given accordingly, the road here in question and the amount Appeal from Superior Court, Pierce Coun- to be expended thereon being designated in ty; M. L. Clifford, Judge. Action by C. Thompson against Pierce County and others. From an adverse judgment, plaintiff appeals. Reversed and remanded, with directions. the notice in the exact language of the resolution of the board above quoted. The election was duly held in pursuance of the res olution and notice, and resulted in the ratification of the bond issue and the construction and improvement of the roads, as pro Lyle, Henderson & Carnahan, of Tacoma, posed. The trial court found: for appellant. Wm. D. Askren, J. A. Sorley, and Frank D. Nash, all of Tacoma, for respondents. PARKER, J. The plaintiff, Thompson, a taxpayer and resident of Pierce county, commenced this action in the superior court of that county seeking an injunction restraining the county and its commissioners from expending county road funds which are raised or to be raised by a bond issue of the county, in the construction of a road along a line, as it is alleged, different from that which was authorized by the electors of the county at a special election ratifying the issuance and sale of bonds of the county for the purpose of constructing new roads and improving established roads within the county. A trial upon the merits resulted in a judgment denying the relief prayed for, from which the plaintiff has appealed to this court. resolution there was a road known as the 'Gig "That at the time of the passage of said Harbor-Long Branch Highway' extending from Gig Harbor to Long Branch by way of Purdy." The correctness of this finding is not questioned here. The proposed improvement of the portion of the "Gig Harbor-Long Branch Highway" together with the portion of the "Purdy-Kitsap County Road," being the proposed improvement here in question, is a little less than five miles long. The county commissioners now propose and threaten to depart from the line of the Gig Harbor-Long Branch Highway as now existing, in the making of the improvement, to the extent of constructing an entirely new road for a distance of about a mile and a half; which new road, while making the entire improvement continuous, would materially depart from the existing line of the Gig HarborThe controlling facts are not in dispute, Long Branch Highway and increase the and may be summarized as follows: On length of the entire improvement several April 19, 1919, the board of county commis- hundred feet. One point upon such proposed sioners passed a resolution providing for the new road would be 1,500 feet distant from calling of a special election and submitting the existing Gig Harbor-Long Branch High way. (193 P.) This bonding and road construction, a designated purpose they cannot be divertproject is undertaken by the county under ed to some other purpose. 15 C. J. 584; the act of 1913, found in the Session Laws of Cooley Taxation (3d Ed.) 581. Would the that year at page 62, and also in sections expenditure from this fund in the proposed 5101-1 and following of Rem. Code. construction of a mile and a half of new road in place of the improving of a somewhat shorter portion of the existing Gig Harbor-Long Branch Highway be a material departure from what was authorized by the voters in the ratification of this bond issue and road project? We are of the opinion that it would be a material departure and wholly unauthorized. We see no escape from the electors the proposition of issuing bonds for the improvement of the existing Gig Harbor-Long Branch Highway, with others, and that this proposed mile and a half of new road is not a part of the road so designated to be improved by expenditures from this fund. Some contention is made in behalf of the county rested upon a provision of section 5101-4, Rem. Code, referring to the notice of election, reading as follows: "Such notice need not describe the road or roads with particularity, but it shall be sufficient either to describe the same by termini and with a general statement as to the course of the same, or to use any other appropriate language sufficient to show the purpose intended to be accomplished." It is contended in appellant's behalf that the county commissioners are not authorized by the vote of the electors ratifying this bonding and road proposition to expend any of the funds so authorized to be raised for the improvement here in question upon any road, the line of which materially departs from the existing line of the Gig HarborLong Branch Highway, and the Purdy-Kit- the conclusion that there was submitted to sap County Road, and that the proposed departure from the line of the existing Gig Harbor-Long Branch Highway is such a material departure. On the other hand, it is contended in behalf of respondents that the ratification of the proposed bond issue and improvement does not restrict the county commissioners to the improving of the Gig Harbor-Long Branch Highway along the line of that highway as now existing. The argument seems to be that since the resolution of the county commissioners and also the notice of election refers to the proposition as one "for the purpose of constructing new roads and improving and aiding in the improvement of established roads," and there is no express language in the resolution designating the road here in question, as one to be "constructed" or "improved," there is nothing to negative the idea that the county commissioners can either "improve" the existing Gig Harbor-Long Branch Highway or "construct" a new Gig Harbor-Long Branch Highway, in whole or in part. It seems to us that this argument is answered by the fact that there was, at the time of the adoption of the resolution and the holding of the election, an existing Gig Harbor-Long Branch Highway known as such, as found by the trial court. The words of the resolution and of the notice of election referring to the "construction" of new roads and "improvement" of established roads are general words, not specifically referring to any separately designated road. We think that the words "constructing new roads" refer to those specified roads which have no present existence, and that the words "improving and aiding in the improvement of established roads" refer to those specified roads which have an existence, and are known by name as specified; and since the Gig Harbor-Long Branch Highway is an existing highway known by that name, as found by the trial court, we see no escape from the conclusion that the resolution and notice of election must be construed as referring to that highway, and its route as existing and known by that name. It is elementary law that when funds are raised by the issuing of bonds or by taxation for and BRIDGES, JJ., concur. It may be that the commissioners in their resolution and notice of election could have specified what they proposed to do as to this particular road in such general terms as, upon ratification, would have resulted in them being authorized to do the thing which they now propose to do; but neither the resolution nor notice stated the proposal in any such general terms. The electors must have understood that it was proposed to improve the "Gig Harbor-Long Branch Highway" as existing and known by that name. We think that the electors' ratification of the proposition limited expenditures from the $135,700 fund to the improvement of the existing Gig Harbor-Long Branch Highway and the Purdy-Kitsap County Road. We conclude that the judgment of the trial court should be reversed, and that the county and its officers should be enjoined from expending any of the $135,700 in the construction of the proposed new road or in the improvement of any other road than the existing Gig Harbor-Long Branch Highway, and the Purdy-Kitsap County Road. It is so ordered, and the cause is remanded to the superior court, with directions to enter judgment accordingly. MACKINTOSH, TOLMAN, FULLERTON, |