27 Mich. 429 | Mich. | 1873
This was an action brought by Gilbert, the defendant in error, against the insurance company, upon a policy of insurance upon a dwelling house, and barn and sbed, and the personal property in each, as well as certain personal property on the farm of plaintiff. The policy was dated September 36,1871, and was for five years from the 19th day of August -1871. The house with the barn aud its adjoining shed were burned on the 11th of November, 1871, with some of the personal property in each, and the action was brought for this loss.
The policy was issued upon a written (and printed) application, signed by the plaintiff, the printed form for which seems to have been furnished by the company, witb blanks to be filled; and printed questions to be answered thereon in writing by the applicant. The plaintiff had no ¡legal title to the buildings insured, but bad, in April pre
Hence, like the warranty to which the provision refers, the effect of such false representations or misrepresentations is not made to depend upon the question, whether they relate to matters material to the risk, but they are to render the policy void, whether material to the risk or not. In other words, it would seem to have been the clear intent of the whole provision, including that of the warranty with which it is immediately connected, to make every actual misrepresentation contained in the application a warranty which, if false, should render the policy void; while the mere suppression of, or omission to state, any fact, should only have that effect when the fact suppressed was one material to the risk. This is not like the case of Elliott v. Hamilton Mut. Ins. Co., 13 Gray, 139, where, though the application was made part of the policy and a warranty on the part of the assured, yet, by the express language of the provision, the misrepresentation and the suppression of facts were placed upon the same footing, and both confined to material facts. Thus, only facts material to the risk came within the warranty. Where there is no express stipulation making representations warranties, courts very properly incline to treat them as representations merely, and therefore of no consequence, unless shown to be material to the risk. But parties have a right to make their own contracts upon such terms and conditions in this respect as they see fit. And if the insured chooses to make his representations warranties, the question of their materiality becomes unimportant, or rather (for this is the principle involved) the insurer is relieved from showing, and the assured is estopped from denying, that they are material to the contract; and no court can be permitted to say that the insurer did not deem them material
To the question: “ Where situate ? ” the answer is: “ On section 24, town 4 south, range 5 east, county of Washtenaw.” The printed part of the application states: “ If the following questions are not answered, this application will be returned,” and then proceeds to ask: “ What is the title?” to which the answer is: “Article of agreement.” “For what purpose occupied, and by whom.” Answer: “Dwelling, by Orin F. Gilbert,” “Is your property incumbered, by what, and to what extent?” Answer: “By mortgage, four thousand dollars.” “If incumbered, what is the whole value of your real estate (including buildings and land)?” Answer: “Value, eight thousand dollars or more.” To the question: “ State height of buildings to
Upon this application the policy was issued, insuring the house for two thousand five hundred dollars, and the barn for two hundred and fifty dollars, and personal property, upon the value of which no question arises in this case, for the balance, making the whole policy five thousand five hundred and fifty dollars.
The policy (in addition to the provision making the application a part of it, and a warranty, as already noticed) contains the provision, that the company are to make good to the assured, his executors, etc., “ all such immediate loss or damage, not exceeding in amount the sum insured, nor exceeding two-thirds the cash value of the buildings above specified, nor exceeding the cash value of the personal property hereby insured, as shall happen by fire and lightning,” etc. It also contains a provision, at the close, in these words: “ This policy is made and accepted upon the above express • conditions, and the charter and by-laws of the company, which are to be resorted to and used to explain the rights and obligations of the parties hereto, in-all cases not herein otherwise specially provided for, and which are hereby made a part of the policy.” By the second section of the charter alluded to, it is provided that all persons insuring in the company, their respective heirs, etc., “ continuing to be insured therein, shall be deemed and taken to be members thereof, for and during the term specified in their respective policies, and no longer, and shall at all times be concluded and bound by the provisions of this act.” By section 6: “Insurance shall be made in all cases upon the representations of the assured, contained in his application therefor, and signed by himself or his attorney; which representation shall, in fairness and good faith, state all the material circumstances within his knowledge which may affect the risk.”
His explanation is, that he was acting for the insurance company, — employed by, and as a kind of a sub-agent of, Ellis, who was the agent, — in taking applications for insurance in this company, at the time Ellis called upon him in reference to insuring his property, which was about the 19th of August, 1871, and had been so employed for some weeks previous; had some experience in fire insurance in making proof of losses; knew it was necessary to state the value of the buildings, and their true- condition, in the application; and before his application, upon which this policy was issued, he had received his appointment directly from the company as agent for them, and, as he says, he had been furnished with, and had in his hands, plenty of applications and blanks ordinarily used by this company.
At this first interview with Ellis, in reference to this insurance, on the 19th of August, he says he and Ellis examined the buildings, especially the house; that Ellis wanted to know what he thought the house worth; that he answered him, “three thousand dollars or more; and then I was to put up an addition that this insurance was to cover; this was for kitchen and wood-shed, 16x24 feet, one story high. I asked him if that could be done. I was to have an addition for a summer kitchen and wood-house;” that the four thousand dollars was the estimated value of the house with the addition, and some blinds he expected to put on, and he says: “I thought he estimated it pretty high at the time.” Being asked whose estimate this was, he says: “I think Mr. Ellis spoke about it. I told him I thought it would be worth three thousand dollars or more; he said he thought it would be worth four thousand dollars.” As to the barn, he says: “I told him (Ellis) what I wanted to do with it; I wanted to repair the barn over; he (meaning Ellis) says, (I will give you
This first application, then, was filled out in the handwriting of Ellis on the 19th of August, and sent afterwards to the company, stating the value of the house at four thousand dollars, its size and height “26 by 30”; title, “article of agreement.” In answer to the question whether the property was incumbered: “Yes; mortgage four thousand dollars.” Question: “If incumbered, what is the value of real estate, including buildings and lands?” Answer: “ Eight thousand dollars.” This application stated: “ Losses, if any, payable to mortgagee, or as far as his interest may appear,” but did not name the mortgagee. And on the 24th of August this returned to Ellis by letter for corree
The court charged correctly in one part of his charge, that the application was a part of the contract, and a warranty, and that each of the representations contained in it was a warranty. But he added, in qualification of this charge, that “if the application for this policy was made out, —that is, written — by the agent of the defendant, or by his dictation, and the plaintiff fully and truly stated to the agent all the material facts connected with the property,
We are only concerned with this part of the charge so far as it relates to the valuation of the buildings stated in the application; and, as relates, to this point, it is proper to say that, upon the plaintiff’s own statement of his own case, and upon his own oath, there was no evidence upon which such a charge could be based (and it certainly is not claimed that aside from his testimony there was any to warrant it). The very form and obvious purpose of the application, with the questions contained in it, showed that the statements it contained were to be understood as made by the applicant, and upon his responsibility, as the basis of the contract of insurance he expected to obtain. And, though a person ignorant of the meaning of the particular terms and special provisions used in such papers, or in the policy, or of the sense attached to them by the insurers, or of the particular rules or manner of doing business, has a right to rely on the instructions and assurances of the agent of such insurers, and upon his acts in reference to such matters, in filling out the application; yet he can not, therefore, escape the responsibility for the statement of facts which he inserts himself in the .application, or permits the agent to insert, as his, upon which he is just as well informed as the agent himself. Now, the value of the plaintiff’s house, in which he lived, and of his barn on the same premises, was a matter upon which, in the very nature
The court also erred in a subsequent portion of the charge upon the question of valuation, in submitting the question of over-valuation simply as one of fraud or good faith, and in stating to the jury that, if the applicant placed a value upon the property which he honestly believed to be within its legitimate value, it would not render the policy void, although larger than the value of the property, as estimated by others. Doubtless a very slight variation should be disregarded; but I think the applicant must be held responsible for any substantial excess when he thus warrants the value. First, there was no room for such a charge; as already shown, the plaintiff admitted that he knew the valuation stated in the application was above the true value; but, second, the question to be submitted to the jury upon this point under the warranty was not necessarily one of fraud, but simply one of fact, whether the property was in fact over-estimated, whether the intent was good or bad; and, third, this part of the charge was inconsistent with the portion of the charge declaring all the representations in the application warranties ; and it tended to confuse the jury.
In reference to the omission to state the Smalley mortgage, or the small amount due upon it, the court charged,
But all this might equally happen if the mortgage had been mentioned; and such suppositions rest upon no different ground from one which supposes Gilbert may fail, or not choose to pay the contract price to Prentice, which included this mortgage; and that his rights may thus be lost. And in case Gilbert should fail or be likely not to pay the contract price, and the insurance company should seek to be subrogated to his rights, the mortgage debt would, as to them, also constitute a part of the purchase price yet coming to Prentice; and they could avail themselves of it as so much payment. The omission to state this fact, within the express provision of the policy, could not prejudice the plaintiff, unless the existence of the mortgage debt to Smalley was “material to the risk;” and we think it so clear that it was not material, that it was quite
Several other questions were raised by tbe exceptions and assignments of error, but as they were not relied upon on tbe argument, it is unnecessary to notice them.
Tbe judgment must be reversed, with costs, and a new trial awarded.