Howard v. Federal Crop Ins. Corp Case Brief

Summary of Howard v. Federal Crop Ins. Corp
U.S. Ct. of App. [1976]

Relevant Facts: Df, FCIC, an agency of the U.S. issued 3 policies to the pl, Howards, insuring their tobacco crops, on six farms, against weather damage and other hazards. Pl’s alleged that their 1973 crop was damaged by heavy rains. Pl harvested and sold the depleted crop, filed notice and proof of loss w/ FCIC, but prior to inspection they plowed or disked under the fields in question. A portion of the policy provides that the stalks shall not be destroyed until FCIC makes an inspection.

Legal Issue(s): Whether the plowing under of the stalks forfeits coverage b/c of section 5 (f) of the insurance policy ?

Court’s Holding: Not by itself.

Procedure: D. Ct granted summary to Df; Reversed and remanded.

Law or Rule(s): When it is doubtful whether words create a promise or a condition precedent, they will be construed as creating a promise. Provisions of a contract will not be construed as conditions precedent in the absence of language plainly requiring such construction.

Court Rationale: If 5(f) is a condition precedent its violation causes a forfeiture of pl’s coverage; but if it is a promise or covenant, df may recover whatever damage is sustained as a result of plowing the stalks under, and will not cause a forfeiture. Insurance policies are generally construed most strongly against the insurer. Whether a contract provision is construed as a condition or an obligation does not depend entirely upon whether the word ‘condition" is expressed. 5(f) specifies that something should not to be performed, it is a promise of non-performance and does not make the non-performance a condition precedent of the insurer’s duty to pay. Because 5(f) is not a condition precedent there are other questions of fact to be determined. Plowing or disking under the stalks does not of itself operate to forfeit coverage under the policy.

Plaintiff’s Argument: The fact that the term “condition precedent," is in 5(c) but not in 5(f) means that the policy determined 5(f) to be considered other than a condition precedent.

Defendant’s Argument: The use of the terms “condition precedent," and “warranty," are synonymous with each other in application.

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