Barker v. Iowa Mutual Insurance Company

Annotate this Case

85 S.E.2d 305 (1955)

241 N.C. 397


No. 744.

Supreme Court of North Carolina.

January 14, 1955.

*306 Worth B. Folger, Sparta, for defendant-appellant.

R. F. Crouse, Sparta, for plaintiff-appellee.

HIGGINS, Justice.

The facts in this case are not in dispute. The policy covered the contents of the dwelling occupied by the insured and the members of his family, including his wife, his dependent son, Bill Barker, 19, and the son's wife, 18, who constituted the members of the household. At the time the policy was issued all the property later lost by fire was in use by the members of the family in the dwelling in Sparta.

Subsequently, the insured rented an apartment in Raleigh for the use of his son and the son's wife while the son attended classes at State College. The furnishings lost when the Raleigh apartment burned were moved from the Sparta home by the insured, who paid the rent on the apartment. The maximum recovery permitted by the ten per cent clause in the policy was $650. It is admitted that the loss sustained by reason of the fire was $1,937.75. The recovery is made to depend upon the interpretation of the following provision in the policy:

"The insured may apply up to ten per cent (10%) of the amount specified for the household and personal property item to cover property described therein and insured thereby (except rowboats, canoes, animals and pets) belonging to the insured or any member of the family of and residing with, the insured, while elsewhere than on the described premises but within the limits of that part of Continental North America included within the United States of America, Alaska, the Dominion of Canada and Newfoundland; however, it is warranted by the insured that such extension of this insurance shall in no wise inure directly or indirectly to the benefit of any carrier or other bailee."

Since no duration of time is fixed in which the property may be elsewhere, we may assume the only limitation is the life of the policy. Somewhat more troublesome is the requirement "belonging to the insured or any member of the family of and residing with, the insured, while elsewhere than on the described premises." The expression in the policy, "residing with," is equivalent to and means having his residence with. It, therefore, becomes pertinent to inquire where the minor son had his residence at the time of the loss. Residence has been variously defined by this Court. The definitions vary according to the purposes of the several statutes referring *307 to residence and the objects to be accomplished by them. Definitions include "a place of abode for more than a temporary period of time;" in other cases the word residence is construed to mean "domicile," signifying a permanent and established home. The definitions of residence range all the way between these extremes. Chitty v. Chitty, 118 N.C. 647, 24 S.E. 517, 32 L.R.A. 394; Carden v. Carden, 107 N.C. 214, 12 S.E. 197; Sheffield v. Walker, 231 N.C. 556, 58 S.E. 356; Bryant v. Bryant, 228 N.C. 287, 45 S.E.2d 572; Reynolds v. Lloyd Cotton Mills, 177 N.C. 412, 99 S.E. 240, 5 A.L.R. 284; Watson v. North Carolina R.R., 152 N.C. 215, 67 S.E. 502.

Does a minor and dependent son who moves to an apartment maintained by his father for the purpose of attending college classes become a resident of the college community, or does he retain his residence with his father? G.S. § 116-143 provides that State institutions of higher learning, including State College, are empowered to fix tuition fees. G.S. § 116-144 provides higher fees from nonresidents may be charged. "The provisions of this article shall not be construed to prohibit the several boards of trustees from charging nonresident students tuition in excess of that charged resident students." Certainly, insofar as the right to charge tuition fees is concerned, students who attend from out of state remain nonresidents of the State. Students who are residents of the State do not become residents of the college community merely by occupying a room or apartment and attending classes. Such would seem to be the reasonable interpretation of the term "residence." To say the son ceased to be a resident of Sparta and became a resident of Raleigh under the facts of this case would be giving to the term "residing with the insured" its most narrow and restricted meaning. It must be remembered that the policy of insurance was written by the company's lawyers and that the courts must, therefore, in case of doubt or ambiguity as to its meaning, construe the policy strictly against the insurer and liberally in favor of the insured. The following is a pertinent quotation from the opinion of Chief Justice Stacy in the case of Roberts v. American Alliance Ins. Co., 212 N.C. 1, 192 S.E. 873, 875, 113 A.L.R. 310: "Policies of insurance differ somewhat from other contracts, however, in respect to the rules of construction to be applied to them. They are unipartite. They are in the form of receipts from insurers to the insured, embodying covenants to compensate for losses described. They are signed by the insurer only. In general the insured never sees the policy until after he contracts and pays his premium, and he then most frequently receives it from a distance when it is too late for him to obtain explanations or modifications of the policy sent him. The policy, too, is generally filled with conditions inserted by persons skilled in the learning of the insurance law and acting in the exclusive interest of the insurance company. Out of these circumstances the principle has grown up in the courts that these policies must be construed liberally in respect to the persons insured, and strictly with respect to the insurance company." Union Mutual Life Ins. Co. v. Wilkinson, 13 Wall. 222, 80 U.S. 222, 232, 20 L. Ed. 617.

The very fact the loss is limited to ten per cent of the full coverage indicates the insurer is willing to take some extra risk in order to make the policy more attractive to those who spend a part of their time away from the family residence. A case in point is Central Manufacturers Mutual Ins. Co. v. Friedman, decided in 1948 by the Supreme Court of Arkansas, and reported in 213 Ark. 9, 209 S.W.2d 102, 103, 1 A.L.R.2d 557. In that case the policy insured against loss by theft of not to exceed ten per cent of the full coverage of "personal property owned, used or worn by the persons in whose name this policy is issued * * * and members of the Insured's family of the same household." The insured's son was a minor who attended Ohio State College for three months, then was inducted into the United States Army, *308 attended officers' training school, was commissioned and assigned to duty at Fort Eustis, Virginia. While serving there, his locker was broken into and personal property stolen. The court held that the son at the time of the loss at Fort Eustis was a member of the insured's family of the same household and his loss was covered by the policy.

We conclude that the facts in this case are sufficient to support the findings and judgment.