47 Ky. 634 | Ky. Ct. App. | 1848
delivered the opinion of the Court.
This action of covenant was brought by Southard to recover for the destruction by fire, of his dwelling house, insured by the Kentucky and Louisville Mutual Insurance Company. The policy on which the action is founded, insures the plaintiff to the amount of $7,000, against loss by fire from the 6th day of March, 1841, to the 6th day of March, 1847, upon his “ one story brick mansion house, situated, &c. adjoining the city of Louisville, lately occupied by James Southard, &c.,- a mortgage on the building and the land on which it stands, in favor of James Burks for $3,500. The aforesaid building is occupied as a dwelling house.” And it is provided that “ if the premises aforesaid shall at any time when a fire may happen, be occupied in whole or in part for purposes more hazardous than that which exists at the date hereof, unless liberty so to occupy, &c., be expressly given in writing on this policy, every clause, article, &c. to be wholly void. Reference being had to the application of the said Southard, and survey filed, for a more particular description, and as forming part of this policy.” In the condition, or terms annexed to the policy, it is stated, that insurance is in no case made on more than two thirds of the value of any building, and that in case of total loss, the company is not liable to pay more than two thirds of the actual value of the building at the time of loss.
The defendants demurred to the declaration, and at the same time filed pleas 1, 2, 3 and 4, to which the plaintiff demurred. And the declaration having been adjudged good, and the pleas bad, time was given to the defendant to plead de novo. At a subsequent term the defendant filed pleas 5, 6 and 7; to the first of which the plaintiff replied by way of traverse, on which issue was joined; and to the two others he filed demurrers, which were sustained. The defendant then offer
We are inclined to the opinion, that the defendants must be understood to have waived their demurrer to the declaration-, and to-have withdrawn their four first pleas, by taking time to plead de novo, and by offering new pleadings under the privilege thus allowed.. But as the questions on- all of the demurrers were elaborately argued here, we shall- notice- them-ah.
The declaration seems to contain every a-verment, both affirmative and negative, which is- necessary either under the policy or the charter of the company, to show that the defendants were bound to pay the loss which had occurred. And the objection that the suit was-brought within the thirty days allowed to the company by the charter having been expressly waived in the Circuit Court, we are satisfied that upon- the face of the declaration the plaintiff shows a good cause of action. The matter of the 4th plea, so far as it is a valid defence, being contained in- the fifth, on which the cause was tried, the defendant was not prejudiced by the decision on the demurrer to- the- 4th plea, even if it was erroneous.
2. Then as to the three first pleas; they stand upon the assumption that the application of Southard for insurance, and the survey of the-building being referred to in the policy as forming a part of it, are to-be taken- as if they were actually inserted- in it, and that- every des
But in the first place it is questionable whether even in the law of marine insurance, the principle which converts into a warranty every matter of fact or description relative to the property insured* which the parties have inserted in the policy, is to be applied to any such matter not inserted in the policy nor written upon it, though it be referred to therein as a paid of the policy. For the question might still arise, for what purpose is it made a part of the policy, and why was it not inserted in it? In ordinary contracts such matter* though actually inserted in the written memorial, lias not necessarily, the force of a covenant or warranty. In marine insurances, it acquires the force of a warranty from the very fact of being inserted in the policy. And as the insurer may insert so much of the applicant’s description or statement as he intends to have the force of a warranty, there is room for the inference that so much as is not inserted is intended to have the effect of a representation merely, and is referred to as such. The general rule is well settled that an express warranty must appear on the face of the policy, and that instructions for insurance, unless inserted in the policy itself, do not amount to a warranty. So a memorandum upon a paper attached to the policy by a wafer* or rolled up in it, when it was shown to the under writer and executed by him, has been held not to be a warranty but a representation merely. These positions are fully sustained by the cases stated in the notes, pages 11 and 12 of Douglass’ Reports. Chancellor Walworth in Snyder vs Farmer’s Loan Company, (16 Wend. 481,) admitting that the parties might, by stipulation* inserted in the policy, give the effect of a warranty to a statement of facts contained in a separate paper, maintains the opinion that, (in the absence of such stipulation,) the principle which converts every thing in the policy into a "warranty, is not to be extended to any thing not contained in the policy or written on the same
• But in the second place. Whatever might be the doctrine in case of marine policies, in making which the ■insurer is in general, wholly dependent upon the statements of the insured, with regard to the property and the risk, it has been seriously doubted (by Chancellor Walworth ubi supra,and so far as we know, has not been established -by judicial decisions, whether “the principle of construing every matter of mere description contained in the body of the policy into a warranty, should be applied with the same strictness to fire policies, where the misdescription is most generally the the mistake of the under writer’s own surveyor.” And in the third place. These warranties being conditions precedent, which must be performed or be true, however immaterial, there is an obvious propriety that they should be contained in the policy which is to be kept by the insured, not only that he may be enabled to make the proper averments when he comes to declare, but that he may be fully apprised of the effect intended to be given to his statements. Since if they are considered merely as representations, it is sufficient that they were made without fraud and are substantially true in every point material to the risk.
Under these considerations we are of opinion that it is at least safe to conclude that the reference in this policy to the application and survey as a part thereof, being a part of the clause which vacates the policy if the premises should, at the time of any fire, be occupied for purposes more hazardous than at the date of the instrument, should be understood as merely identifying the description and condition of the property at that time, for the purpose and as the standard of comparison in case of fire; that no other force or effect was intended to be given to the writings referred to, than as being a description of the nature or purposes of the occupa
Since then the statements made in the survey or even in the plaintiff’s application for insurance, are not warranties, these pleas do not, in alledging the untruth of those statements, show a breach of warranty, and are, therefore, insufficient on that ground, to avoid the policy or bar the action. But although the pleas alledge a warranty and a breach of it, they should perhaps be deemed substantially good if they show such a misrepresentation as should avoid the policy. Considered in this view, the application and survey may be regarded as representations, and the alledged breach of warranty as an averment of the untruth of the representation. But in order to make the pleas good in this aspect, they should show not only the untruth of the representation,
The survey referred to in these pleas, state that “the house has eight rooms, all furnished in the most costly manner, and in first rate repair, except the roof. The fire places áre all secure. There is a kitchen and negro buildings in the rear, though not connected by abo.ut fifteen feet, and there is a cistern in the vacancy with a pump,” &c. The breach alledged in the two first pleas, is that one of the eight rooms was, at the date of the policy, and until the house was burnt, used as a kitchen, one of them stating that there was not a kitchen in the rear, the other that the house in the rear was not used as a kitchen. The third plea alledges that the house insured was not used solely as a dwelling house, but one room was used as a kitchen, and the kitchen was not in the rear or connected with the house, and avers that the using of the room in the house as .a kitchen, greatly increased the risk, and that the burning complained of was caused by fire from the said room used as a kitchen. This being the strongest of these pleas, will be alone considered.
The question is, whether the plea sufficiently shows the materiality of the alledged variance between the representation and the real fact as averred. It may be admitted that a dwelling house is in more danger of being consumed or injured by fire, if one of its rooms be used as a kitchen, than if no such use were made of any room in it, but the kitchen was in another building unconnected with it.
But it is not admitted that the representation of a house as a dwelling house, is falsified by averment and proof that one of its rooms was used as a kitchen. And we do not regard the statement in the survey, that there was a kitchen and negro building in the rear, as entirely equivalent to a representation that there was no kitchen in the dwelling house. The terms “dwelling house” and “kitchen,” have not such a precise and definite import in common use, as that it must be necessarily implied from the statement as contained in the survey, that no room in the dwelling house was used as
But further than this, we are of opinion that a plea 1 r attempting to avoid a policy on the ground of roisrep** resentation, should show dearly that the fact misrepresented was material in view of the policy, and that it is not sufficient merely to show that the actual hazard of loss was greater as the fact existed, than it may have been supposed to be as the fact was represented. Taking the definition of materiality as laid down in 1 Marshall on Insurance, 467: “Every fact and circumstance which can possibly influence the mind of any prudent and intelligent insurer, in determining whether he will under-write the policy at all. or at what pre- , . ... ’ T r, mium he will under-write it, is material.” It is m this view that the expression “material to the risk,” is understood to be used in the law of insurance. When, as is probably the case in marine insurances, every insurance is based upon the particular circumstances of each individual case, the misrepresentation of any fact which might enhance the actual hazard or risk of the subject, might be deemed material and fatal, as it might influence the determination of the under-writer as to the rate of premium, if not as to his under writing the policy at all.
But in regard to insurance on buildings against fire, it cannot be assumed that every circumstance of difference, which might upon strict scrutiny, be regarded as causing an actual difference in the hazard of loss, is to be deemed material. It is the known usage of companies professing to insure buildings against fire, to classify them according to certain well defined circumstances of discrimination, founded generally upon the^ nature of the materials of which the building is constructed, its
3. As already intimated, the 4th plea was substituted by the 5th, which presents more fully the averment that the house was burnt by the design, and with the connivance and fraud of the plaintiff, which matter was decided in favor of the plaintiff by the jmy.
4. The 6th plea seems to be founded on that clause of the policy and of the charter, which declares that the policy shall be void, if the building shall be occupied at the time of any fire, for a purpose more hazardous than at the date of the policy, unless by consent of the insurers, &c. The plea states that after the execution of the policy, the plaintiff without consent, &c., caused one of the rooms in said dwelling house to be altered, and used the same as a kitchen. But it doés not aver that the use or purpose for which the room was used was altered, nor that it was not used as a kitchen before the date of the policy. Although, therefore, the plea goes on to say that the use of said room as a kitchen, was a more hazardous occupation of the house than if it had been used wholly as a dwelling house with a kitchen fifteen feet in the rear unconnected, and that the house was burnt by the use of said room as a kitchen; and although it were conceded that the use of one room as a kitchen after the date of the policy, when no room had been so used before, but the kitchen was in a separate building, &c., is such an occupation for a more hazardous purpose, as under the clauses referred to would avoid the policy, still the plea is bad in this aspect, because it does not show á
5. The 8th plea, besides relying upon the alledged misrepresentation as to the locality of the kitchen, and the use of the house, as in former pleas, and the representation that all the fire places were secure, alledges the new fact that the fire place of the room used as a kitchen was not secure, that the use of the said room as a kitchen, and the insecurity of the fire place, was fraudulently concealed, and that the use of said room as a kitchen was continued, and the fire place insecure, and that the fire from the fire place and chimney of said room consumed the house. The plea refers to the survey as containing the representations relied on. It makes no averment with regard to an increased hazard or risk, arising from the fact alledged to have been misrepresented or concealed. Nor does it alledge that the bm’ning of the house was caused by that fact. But waiving any remarks on these points, the plea, so far as it relies upon the use of one of the rooms of the dwelling house as a kitchen, is considered as being defective, on the ground already sufficiently discussed, that it does not show that the alledged misrepresentation and concealment were material to the acceptance of the risk or the rate of insurance. And, that so far as it relies on a misrepresentation or concealment of the true condition of the fire place in said room,, it is insuf
A substantial defect in the fire place, which might endanger the safety of the building, would no doubt be a material fact, the fraudulent misrepresentation or concealment of which might suffice to vacate the contract. But the plea does not show, nor even alledge such a defect. It should have stated the particular defect, so as to apprize the plaintiff of the facts relied on to avoid the policy. The word fraudulent, applied to the representation or concealment, does not magnify nor even identify the fact misrepresented or concealed, and cannot supply the omission to show its materiality.
6. The 7th plea, the consideration of which has been postponed, because it introduces matter entirely new, ,was filed on the 27th day of September, 1847, and alledges that on the 24th day of September, 1827, one Gilbert C. Russell was seized in fee of the land and the dwelling house insured, &c., and conveyed them to James Southard, who on the same day executed and delivered to him (a writing,) showing that said conveyance was only a mortgage or security for money loaned by Southard to Russell, of which the plaintiff had notice at the time; that the plaintiff claimed the said house and land by devise from James Southard, with full knowledge that his title was only a mortgage, which Russell had a right to redeem, &c.; that the title was only a mortgage at the date of the policy, and that the true title of the plaintiff, and the incumbrances was not disclosed at the time, nor expressed in the policy.
This plea is founded upon the 13th section of th® , , r ■ ,. .... rr-,1! . chapter of incorporation, which m effect declares the policy void, unless the true state of the title of the assured, and the incumbrances thereon are expressed in the policy. This section came before the Court, and received a construction in the case of this Company
The material question is, whether the plea shows with sufficient distinctness and certainty, that the title which had been conveyed to James Southard in 1827, was subject to redemption at the date of the policy,tor in other words, that there was then a subsisting and available right of redemption which affected the value of the legal title in the hands of the plaintiff. The only averment upon this point, is that the title of the plaintiff at the date of the policy, was a mortgage title, omitting the words previously used, “that Russell had the right to redeem.” And although about fourteen years had elapsed from the date of the deed to J. Southard to the date of the policy, and twenty years had fully elapsed from the former date to the filing of the plea, it is not alledged that Russell had even up to the last date, claimed or asserted the right of redemption by act, or even-by word. Nor is it alledged that the writing which evidenced the nature and objects of the deed, was still in the hands of Russell as an enforcible instrument. But farther than this, the plea does not state the contents or substance of the writing said to have been delivered
7, Upon the trial of the issue on the fourth plea, two questions only were decided by the Court against the defendants: 1st, The Court on objections made by the plaintiff, refused to permit the surveyor of the defendants, by whom the survey already referred to was made, to answer the question as to what representations were made'to him by the plaintiff on that occasion. Assuming the object of the question to have been to prove the plaintiff’s representation as to the state of the building or of its occupancy at that time, we are of opinion that the evidence had no relevancy to the issue, and was properly rejected. It was not suggested and cannot be supposed, that any intimation was then given of a fraudulent design to burn the building after it should be insured. And even a fraudulent representation of its condition would furnish no reasonable ground for inferring such a design. The loss occurred about six years after the survey.
The Court having, before the argument of the case, instructed the jury, on the motion of the defendants, that the measure of damages was two thirds of the actual value of the house at the time it was burned, with interest, &c., refused after the argument was through, to give an instruction moved for by the same party, which after stating the criterion of damages as
Wherefore, the judgment is affirmed.