39 A. 902 | N.H. | 1892
It has already been decided that this contract of insurance is to be construed in accordance with the laws of Massachusetts. Davis v. Insurance Co., ante, 218. Hence the plaintiff's contention that the statutes of this state (G. L., c. 172, s. 3, Laws 1879, c. 13) charging an insurance company with knowledge of the risk possessed by a third party, who prepares the application, whether technically its agent or not, apply to this contract, cannot be sustained. These statutory provisions were not embodied in and do not control the Massachusetts contract. The parties intended that their contract should be construed by the laws of the state where the plaintiff resided and where the property insured was situated. "All contracts of insurance on property in this commonwealth shall be deemed to be made therein." Mass. Laws 1887, c. 214, s. 3.
The ruling that the Indianapolis brokers were agents of the defendants, and that their knowledge of facts or their representations relating to the risk bound the defendants, is erroneous under the statutes of Massachusetts. The agreement between the parties contained in the policy was, that "If any broker or other person than the assured has procured this policy, . . . he shall be deemed to be the agent of the assured and not of the company, in any transaction relating to the insurance." This is evidence that the brokers, in negotiating for the insurance and *338 procuring the policy, were acting as the plaintiff's agents; and the question is whether a finding of fact that they sustained that relation to her can be sustained under Massachusetts law. The question relates to the capacity of the parties to bind themselves by this provision of the contract. If it is not opposed to the statutes of that state, there is no reason why it was not competent for them to make it. Whether a similar provision in a New Hampshire contract of insurance would be held invalid under our statutes is immaterial.
An Insurance broker is defined to be a person who "for compensation acts or aids in any manner in negotiating contracts of insurance or re-insurance, or placing risks or effecting insurance or re-insurance for a person other than himself, and not being the appointed agent or officer of the company in which such insurance or re-insurance is effected." Mass. Laws 1887, c. 214, s. 93. Section 90 of the same chapter provides that "an insurance agent or broker, who acts for a person other than himself in negotiating a contract of insurance by an insurance company, shall, for the purpose of receiving the premiums therefor, be held to be a company's agent, whatever conditions or stipulations may be contained in the policy or contract; and such agent or broker, knowingly procuring, by fraudulent representations, payment or an obligation for the payment of a premium of insurance, shall be punished," etc. Our attention has not been called to any other statutory provision in that state restricting the agency clause in insurance policies. Section 90 restricts the power of parties to define their liability under that clause in a single particular only, which is not material in this case. With that exception the general common-law power of the parties in this respect remains unchanged. The intention of the parties, therefore, evidenced by the policy and such other facts and circumstances as may be competent, must determine the question whether the brokers who procured this policy for the plaintiff were her agents or the agents of the company; and this question is one of fact for the jury.
The defendants insist not only that the verdict should be set aside, but that judgment should be ordered in their favor on the ground that the plaintiff suppressed material facts in her application, and was guilty of a breach of the warranty contained in the policy, or of a misrepresentation sufficient to avoid the policy. The plaintiff warranted in the policy that she had not "omitted to state to the company any information material to the risk." This stipulation being incorporated in the policy may be "considered as a warranty." Sec. 59. The plaintiff having accepted the policy with this provision in it, is bound by it. Goddard v. Ins. Co.,
But whether the plaintiff's suppression of material facts relating to the risk is held to constitute a breach of the stipulated warranty, may be of little practical importance, since it may also be held to be a false representation of matters material to the contract. "Representations to insurers before or at the time of making a contract are a presentation of the elements upon which to estimate the risk proposed to be assumed. They are the basis of the contract; its foundation, on the faith of which it is entered into. If wrongly presented in any respect material to the risk, the policy that may be issued thereupon will not take effect. To enforce it would be to apply the insurance to a risk that was never presented." Campbell v. Ins. Co., supra, 390; Kimball v. Ins. Co., 9 Allen 540; Eastern Railroad Co. v. Ins. Co.,
Whether, however, her failure to disclose facts relating to the risk, which the defendants now complain of, constitutes a breach of the warranty contained in the policy, or whether it amounts to a misrepresentation of the risk assumed under the contract, the defendants cannot escape liability for the loss unless those facts were material to the risk. Any matter is material to the risk *340
which increases the danger of loss, and would influence an insurance company, in the reasonable prosecution of its business, to decide whether to take the risk, and what premium to charge for it, if taken. The premium bears a relation to the risk incurred, increasing as the danger of loss increases. "The contract of insurance depends essentially upon an adjustment of the premium to the risk assumed." Kyte v. Ins. Co.,
The fact that the policy in suit does not conform to the standard policy prescribed by the statutes of Massachusetts (s. 60) is not important in the present inquiry. A policy issued in violation of the statute "shall nevertheless be binding on the company issuing the same" (s. 105), and, as provided in the standard form, "shall be void if any material fact or circumstance stated in writing has not been fairly represented by the insured." While the defendants cannot escape liability on the ground that the policy in suit does not conform to the standard established in that state, the plaintiff cannot avoid the common-law result of her misrepresentation of material facts.
Verdict set aside.
BLODGETT and CHASE, JJ., did not sit: the others concurred. *341