Howard v. Federal Crop Ins. Corp.
540 F.2d 695 (4th Cir. 1976)
Howards grew tobacco and insured it with Federal crop insurance.Their crop was damaged in a storm
and they claimed to have lost $35k.Howard filed a claim with the FCIC, but before the adjuster
arrived, Howard plowed under the fields so that they could plant rye to
cover and preserve the soil.
was a clause in the insurance contract that tobacco stalks shall not be destroyed
until inspected or coverage will be forfeited.
type of provision is a called a condition.
adjuster denied the claim on the basis that Howard had violated a
condition in their insurance policy that said that no stalks may be
destroyed until they are inspected by the insurer.Howard sued for breach of contract.
Trial Court granted summary judgment for FCIC, Howard appealed.
Appellate Court reversed the decision and remanded the case for trial.
Appellate Court found that plowing under the stalks does not, in itself,
operate to forfeit insurance coverage under this policy.
was not a condition, since there
were other ways for FCIC to assure that the crop had actually been
that are not conditions are promises (which is not the same as a naked
promise though).Breaching a promise is indeed a breach of a contract, but it does
not excuse performance of
the other party.The other
party still must perform, although they can sue for damages due to the
this case, FCIC could claim that they had to do a special analysis to
determine what the damages were, and that analysis cost more money than
a visual inspection, therefore, they should be able to recover that
a provision in a contract is a condition, then breaching that provision excuses the other party from performance of their end of the contract.