12 App. D.C. 245 | D.C. Cir. | 1898
delivered the opinion of the Court:
It will be noticed that among the reasons assigned for the motion to direct a verdict in favor of the defendant, the enforced release executed by the plaintiff is not mentioned. And certainly it was very proper to omit this proceeding from the further consideration of the court. We do not need to give it any consideration here; although it is insisted on in the brief of counsel for the appellee. If the case turned upon that release, our conclusion might be very different from that which we have reached.
There are six assignments of error by the appellant. Four of these raise the same substantial question, that there was no breach of the conditions of the policy of insurance
In view of what we have said, the fifth assignment need not be further considered here; and the sixth will be disposed of by what we have to say of the others. In connection with this last assignment, however, the point is made, that in any event the plaintiff should have been allowed to recover pro tanto for the property actually owned by her, even if as to the remainder of the property insured the objections of the defendant should be regarded as well taken. Of this in its. order.
1. The burden of the argument on behalf of the appellant is that there was no fraudulent concealment of anything by her; and that, if there was any omission of proper information, it was the duty of the defendant company and its agents to inform themselves of the true condition of things by proper inquiry before the policy of insurance was issued. And the claim is, that, in the absence of fraudulent concealment by the plaintiff, and in the absence of proper inquiry by the agents of the defendant company, the plaintiff is not chargeable with any breach of the conditions of the policy of insurance.
That there was apparent breach of the conditions of the policy is beyond all question. One of those conditions was that the policy should be void if the interest of the insured in the property should be other than that of unconditional and sole ownership. To one-fifth of the property, or thereabouts — the piano valued at $275, and the property purchased from the Lansburgh Company, about $600 — she had no title whatever. Even if it be conceded that she had an
Another of the conditions was that the policy should be void in the event that the property insured should be covered by a chattel mortgage. Nearly one-quarter of the property — that purchased from Craig and Harding, and valued at $950 — was incumbered by a chattel mortgage to secure the greater part of the purchase money yet due upon the property to that firm.
Yet another condition was that the policy should be void in case of false swearing by the insured touching any matter relating to the insurance or the subject thereof, whether before or after a loss. After the loss in the case, the plaintiff, in an affidavit presented to the company and constituting part of her proof of loss, swore that she was the sole and absolute owner of all the articles enumerated in her schedule of her loss, and which comprised both the piano and the furniture contracted for with the Lansburgh Company; and in view7 of what has already been said, that statement was undoubtedly untrue, and therefore necessarily a violation of the condition of the policy.
But it is argued, that there was no fraud in all this on the part of the plaintiff, and that, therefore, she ought not to be precluded from recovering. And cases are cited in which it is claimed that recovery has been allowed under somewhat similar circumstances.
We do not so understand the law. It is unnecessary, and it would be a hopeless task to enter upon the dreary wilderness of judicial decision upon the subject of insurance, with the view7 of deducing a rule from it for our government in the present instance. Courts have sometimes been too astute in their search for reasons to maintain the liability of insurance companies in the face of conditions limiting such
We must take it for granted, therefore, that our duty in the premises is to construe the contract of insurance before us according to its true legal intent and meaning, and not in any manner to vary or modify the instrument itself by disregard of any of its provisions. It is true, however, that this construction must be with reference to the well-established rule that, if a policy of insurance is so drawn as to require interpretation and to be fairly susceptible of two different constructions, the one will be adopted that is most favorable to the insured. Imp. Fire Ins. Co. v. Coos County, 151 U. S. 452.
In the sense of absolute ownership, clear and unincumbered, as commonly understood, the plaintiff had title only to about one-half of the property which she sought to insure. With reference, however, to the portion of the property purchased from Craig and Harding, and which was covered by a chattel mortgage, she may, in view of the authorities on the point, be also regarded as the sole and unconditional owner. Insurance Co. v. Kelly, 32 Md. 421; Howard Fire Ins.
We must conclude that, at least as to part of the property, about one-fifth of it in value, the policy of insurance wholly failed, for the reason that the condition of insurance, requiring unconditional ownership in the plaintiff was never performed by her.
2. It may be that it was in consequence of such decisions of the courts as those to which we have referred, wherein it was held that there was sole and unconditional ownership, in the legal sense of the policy of insurance, notwithstanding the existence of an outstanding mortgage, that insurance companies sought further to limit their liability by imposing conditions against such mortgages. But whatever may have been the suggestion for these conditions, it is very certain '
3. But it is said that all this is of no consequence, inasmuch as the defendant company made no inquiry as to the true-condition of things, and there was no fraudulent concealment on the part of the plaintiff. And there is excellent authority for the doctrine, that “as to the ordinary risks connected with the property insured, if no representations whatever are asked or given, the insurer must be supposed to assume them; and if he acts without inquiry anywhere concerning them, he seems quite as negligent as the insured, who is silent when not requested to speak.” Clark v. Manufacturers’ Ins. Co., 8 How. 235. The agents of insurance companies are usually experienced men, well informed as to the information which they should have in anticipation of the risk which they assume; and the rule is not unreasonable which would require them to make all due inquiry for the procurement of such information. Nor is it unreasonable that the insured should be held harmless from the mere failure to give information, when he is not interrogated, and when perhaps he is not aware of the importance or immateriality of the matter to which the information should extend.
But this is not a case of representation or misrepresentation,’ of failure to give information or failure to elicit it by proper inquiry. The parties have deliberately put it into their contract, and have made it an essential condition of that contract that the contract itself should not be binding,
In the case of Clark v. Manufacturers’ Ins. Co., 8 How., 235, to which we have referred for the rule imposing the burden of inquiry upon the insurer rather than that of voluntary information upon the insured, the matters there referred to as proper knowledge for the insurer were the circumstances of the use of property, to which the minds of insurers would naturally be directed, and those of parties insured might not be so called. But it seems to us that a different condition of things arises, when a person solicits insurance on property not his own, and which he knows not to be his own; and when to the proposed insurer the very solicitation of insurance is the equivalent of a representation that the property, for which the policy is sought, is the unconditional and absolute property of the person seeking the insurance. Assuredly it would not be held that, if the person had no title at all of any kind, and the policy, therefore, was simply a wagering policy, yet he should still be entitled to recover, if the company or its agents had made no inquiry in regard to his ownership. Neither ownership nor the character of ownership is usually a subject of inquiry in such cases.
4. What we have said in regard to the matter of the title to the property and the conditions of the policy in reference thereto, will serve in great measure to dispose of the matter of the affidavit made by the plaintiff for the purpose of procuring payment to her of the amount of the policy of insurance. That this affidavit had been prepared by the agent of the defendant company, and that the plaintiff - did not read it before she executed it, are circumstances that can not for a moment entitle themselves to consideration. The affidavit was short, plain and simple. It was not difficult to be understood; and the failure of the plaintiff to read it before execution only aggravates the falsity of its statements. There is no pretence that she was in any manner prevented from reading it, or that there was any fraud on the part of the agents of the defendant in its procurement. It was precisely the thing against which the defendant company sought to guard itself when it provided
The case of Knop v. National Fire Ins. Co., 101 Mich. 359, is cited, in which there was a suit like the present upon a policy of insurance. There, also, there was a provision in the policy that it should be void if the interest of the insured were other than unconditional and sole ownership. Whether there was any provision in regard to false swearing, as in the policy before us, does not appear from the report of the case, and we are not otherwise advised. But after the loss, the insured party made an affidavit to the effect that he was the sole and unconditional owner. The court,in its opinion,said: “It has been repeatedly held that such a condition will not invalidate the policy in such a case. . . . We do not think that the statement in the affidavit, made after the loss, that he was the sole and unconditional owner, would prevent a recovery.” The reason given for this latter conclusion is that the false affidavit could not have prejudiced the defendant company.
Plainly that case has no application to this now before us. In that case there was, as here, a chattel mortgage upon the insured property, which was not disclosed to the insurer at or before the issue of the policy. But the court held, in accordance with what seems to be the preponderance of authority on that point, that, notwithstanding such mortgage, the plaintiff was in law, and according to the true legal intent and meaning of the policy of insurance, the sole and unconditional owner; and therefore the condition of the policy had not been broken. But there was no condition there, as here, against the existence of mort
When in that case the court held that the plaintiff was the sole and unconditional owner of the insured property, notwithstanding a mortgage existing against it, it would have been entirely logical, in reference to the affidavit, to hold that this paper was not false. For if the plaintiff was in truth the sole and unconditional owner of the property, it was no falsehood for him to say so, either in an affidavit or otherwise. In the opinion it would seem to be conceded that the affidavit was false; but the falsehood was sought to be excused on the ground that it did no injury to the defendant. This may also have been a correct statement of the law as applicable to that case. But it does not appear in that case, as it appears here, that false swearing on the part of the insured, whether prior to a loss or subsequent thereto, operated to avoid the contract, by being made an integral and essential condition of the contract. We can not say that the insertion of such a condition in the contract was either illegal or improper. Harsh, perhaps, it may have been; but it was competent for the parties to make it, and they made it. We may conjecture even that it was inserted in the policy of insurance, in view of the decision in the case of Knop v. National Fire Ins. Co., or of some similar decision elsewhere. Whatever may have been the motive, it is not illegal; it is part of the contract; and it can not be disregarded by us. As part of the contract, it makes a very different case from that of a false affidavit made in the ordinary course of the proof of loss, and which has not entered into the contract itself as a condition of the validity of the policy.
5. From what we have said, it necessarily follows, in our opinion, that as to about one-half of the property supposed to have been covered by the policy of insurance, that policy was or became void by its own express limitations, the condition of the plaintiff’s interest in the property, and the
The patient ingenuity and evidently conscientious and laborious research of counsel for the appellant have failed to find more than two adjudicated cases in apparent support of their contention in this regard; and we are unable to see that those cases have that effect. In one of them from the Supremo Court of the State of Tennessee, the case of Hobbs and Henly v. Memphis Ins. Co., 1 Sneed, 444, action was brought on a policy of fire insurance, covering groceries owned by a partnership. One of the conditions of the policy was that it should be void if assigned in whole or in part. One of the partners, Hobbs, sold his interest in the property and assigned his interest in the policy to his copartner. The property was destroyed by fire, and the insurance company claimed a total forfeiture of the policy on the ground that it had been invalidated by the assign
The other case cited is from West Virginia. It is the •'case of Quarrier v. Insurance Co., 10 W. Va. 507, in which suit was brought upon a policy' of insurance effected on four buildings and the fixtures therein. The policy provided that it should become void upon a sale or transfer of the property; and the contract of insurance was one entire contract. One of the buildings was sold; and subsequently all four of them were damaged by fire. A recovery was allowed for ' the three buildings retained by the person insured. But we fail to see wherein that is pertinent to the question before us. The claim of forfeiture in that case was wholly unwarranted. By the express terms of the policy itself there could have been no forfeiture except by the alienation of all the property. ’ There was no provision in reference to a partial alienation. At the same time as the recovery by the insured could properly have been only in proportion to his loss and the total amount of the insurance, the decision was only just to permit such proportionate recovery. This was only the application of the principle which makes the amount of the policy the limit of recovery, and authorizes recovery only to the actual extent of the damage within that limit. In the case before us, if there were no question of the plaintiff’s ownership of the property insured, and subsequently to the issue of the policy of insurance she had sold or disposed of some of the property, there might be room for the application of the doctrine of the case of Quarrier v. Insurance Co; but as the
The proposition that a policy of insurance, such as that shown in the present case, is an entire and indivisible contract, the consideration being entire, is amply supported by authority. Boarman v. Franklin Fire Ins. Co., 40 Md. 620; Agricultural Ins. Co. v. Hamilton, 82 Md. 88; Gottman v. Penn. Ins. Co., 56 Pa. 210; Lee v. Howard Ins. Co., 3 Gray, 583; Geiss v. Insurance Co., 123 Ind. 172; Garver v. Insurance Co., 69 Iowa, 202; Stevens v. Insurance Co., 81 Wis. 335; McGowan v. Insurance Co., 54 Vt. 211. The forfeiture necessarily operates to invalidate the vahóle policy.
From what we have said it follows that the plaintiff having shown by her own testimony that the policy of insurance upon which she sued had become void by its own express terms, had no case upon which to go to the jury; and the trial court was fully justified in peremptorily directing a verdict in favor of the defendant. .
The judgment appealed from must, therefore, be affirmed, with costs. And it is so ordered.