65 Mich. 52 | Mich. | 1887
This is an action on a fire insurance policy.
“And the said applicant hereby covenants and agrees to- and with the Fireman’s Fund Insurance Company that the foregoing is a just, full, and true exposition of all facts and circumstances in regard to the condition, situation, value, and risk of the property to be insured; and said answers are considered the basis on which insurance is to be effected, and the same is understood as incorporated in and forming a part of the policy, and a warranty on the part of the assured, whether referred to in that instrument or not, and whether the said answers have been written by the agent of said company or not; aid the assured further covenants and agrees to make known to the said company any material change in the risk, of its surroundings, which may take place during' the life of said policy.”
The policy contains this provision:
“Any false representation by the assured of the condition, situation,, or occupancy of the property, or any omission to make known any fact material to the risk, or an overvaluation, or any misrepresentation whatever, either in a written application or otherwise, * * * then, and in every such case, this policy shall be void.”
And also the further provision:
“ The cash value of property destroyed or damaged by fire shall in no case exceed what would be the cost to the assured, at the time of the fire, of replacing the same, and in case of the depreciation of such property by reason of age, wear and tear, location, change in style, lack of adaptation to profitable use, or other causes, a suitable deduction from the cash cost of replacing shall be made, to ascertain the actual cash value; and the assured hereby expressly waives all right, 'arising under any state or other law, to collect of this company, in case of loss, any sum in excess of the true and cash value of the property herein insured, which value shall be determined as herein provided.” •
Another clause provides that, in case differences shall arise concerning the amount of any loss or damage, arbitrators
Under this provision of the policy the defendant requested a submission to arbitration, and the parties signed a submission in writing, in which it was stipulated that the appointment of arbitrators was without reference to any other question or matters of difference within the terms and condition of the insurance, and was not to be taken as any waiver on the part of the-company of the conditions of the policy in case they should elect to avail themselves thereof; and it was expressly agreed that the appraisers were to take into consideration the age, condition, and location of the premises before the fire, and also the value of the walls, materials, or any portion of said building saved, and, after making an estimate of the cost of replacing said building, a proper deduction should be made by them for the difference between the value of a new or replaced building and the one insured.
The appraisers met, and, after making the proper deductions, determined the damage to be $973.87. In arriving at this amount, one of them testified they deducted 25 per cent., and the other that they deducted 30 per cent., from the value of the old building for new. There was testimony in the case which placed the value of the building, including foundation, at $1,900, others at $1,800, and so on down tn $800. The jury were asked to find specially what the cash value of the house destroyed was at the time it was insured, and they found it to have been $1,450.
The circuit court instructed the jury that—
“ The application is a part of the contract and policy, and a warranty, and the representations of value contained in it are warranties. If the jury find that the plaintiff made a, substantial overvaluation of the property in her application for the insurance, the defendant company is entitled to your*56 verdict. ' * * While some latitude may be allowed for differences of opinion in determining a question of value, yet if, after making due allowances for such differences, the jury find that there was an overvaluation, the plaintiff cannot recover.”
This instruction to the jury was correct. The application and the policy bear the same date, and refer to the same subject-matter. They are substantially one instrument. Taken together, they constitute the agreement between the parties. The representation as to the value of the property insured was material. The object of requiring a true statement of the value of the property insured is apparent. It enables the company to determine the amount of the risk they are willing to assume. No company doing a legitimate business would insure property by an unvalued policy to its full cash value, without charging at least a premium proportionate to the risk. The temptation to convert property insured to its full cash value into money, at the expense of the insurance company, is recognized as one of the hazards attending such insurance.
In this case it will be observed that the company did not intend to insure the property to the extent of its cash value; for, while such value was represented to be $1,800, the risk assumed by the company was only to the extent of $1,400, or about three-fourths of its cash value as represented; and, if the finding of the jury is a just criterion of the true cash value of the building destroyed, the plaintiff obtained an insurance within $50 of its actual cash value. Nor is this warranty of the value contained in the policy neutralized or rendered inoperative or immaterial by that. provision of the policy which provides that in no case shall the company be liable to pay more than the true cash value of the property insured. This is all they could be compelled to pay in an unvalued policy, without such clause, and was evidently inserted for greater caution, and to prevent a claim being set up that the policy is a valued one.
It is urged that the case of Schmidt v. City & Village Fire Ins. Co., 55 Mich. 432, decides the question as to overvaluation in this case. That case is distinguishable from this. That was a case of mutual insurance. The charter and by laws were made a part of the contract of insurance, and it was agreed that the company should not in any case pay more than three-fourths of the cash value of the buildings insured, if they were insured to that amount. With such a provision as this, it could make no difference to the company whether the property was overvalued or not.
Whether or not there was an overvaluation in this case was, under the evidence, properly submitted to the jury; and had this been the only question left to them, and they had found a verdict for the plaintiff under the instructions given upon this subject, we should not consider it proper to
It is claimed that the fact of the agent of the company going to the scene of the fire and making inquiries, without, showing what such inquiries were, and of requesting an arbitration to fix the amount of the loss, and the plaintiff paying one-half the expense of the arbitrators, constituted a waiver of any forfeiture on the ground of overvaluation. We cannot concede this claim. The company had a right to make inquiries — to investigate — both as to the origin of the fire and the value of the property; and the contract between the parties was that an arbitration for the sole purpose of determining the amount of the loss might be had upon the request-of either party, and that the expense thereof should be borne equally; and the agreement to arbitrate expressly stipulated that such submission should not be taken as a waiver on the part of the company of the conditions of the policy. In view of these facts, there is no room for claiming a waiver on the part of the company.
The judgment must be reversed, and a new trial granted..