148 Minn. 170 | Minn. | 1921
These actions were brought to recover damages for a fraud alleged to have been perpetrated by defendant in collecting insurance on mill wood covered by policies issued by plaintiffs. The two cases were com solidated for trial and are here on defendant’s appeal from an order denying its alternative motion, for judgment or for a new trial following directed verdicts for the plaintiffs.
The wood was insured in June, 1912. The policies were in the standard form. Defendant had a sawmill at Minneapolis which it had ceased to operate and was selling off the wood in its yard. In July and August, it made written contracts of sale with divers purchasers, covering 4,550 loads of wood. They were in the same form and after the recitals these words appear:
“The party of the first part * * * hereby sells and agrees to hold for and at the risk of the party of the second part until January 1st, 1913,-loads millwood at * * * $1.60 per load * * * now located between 24th and 25th avenues north * * * in the city of Minneapolis. * * * The said second party * * * agrees to remove all of the above mentioned wood from the ground it now occupies before January 1st, 1913.”
The contracts were signed by defendant and by the several purchasers, who gave their notes for the purchase price. All the notes fell due prior to November 4, 1912, the date of the fire, except those given by the Flour City Fuel & Transfer Company. On October 28, an inventory was taken of the wood then in the yard. It showed that there were
Wood on hand Oct. 28, 1912, according to inventory .... 5,675 loads
Deduct subsequent deliveries on orders................ 385% loads
5,289% loads
Deduct wood saved according to inventory after fire ... .1,709% loads
3,579% loads
At $1.60..........................$5,727.60
Less salvage as agreed.............. 200.00
Total ......................$5,527.60
The proofs stated that defendant owned the wood that was burned, that no one else had any interest in it, ancl that there had been no transfer or change in the title or possession of the property since the policies were issued. The proofs were accepted and the loss paid, and about five years later these actions were brought to recover as damages the amounts so paid.
If defendant’s insurable interest in the property equalled the amount 'collected on the policies, plaintiffs have not been damaged, regardless of the truth or falsity of the statements in the proofs of loss, and, of course, in an action for fraud, damages must be shown or there can be
Plaintiffs earnestly insist that defendant’s failure to disclose the existence of the sale contracts and their cancelation was an attempt to defraud within the meaning of the policies. Martin testified that defendant’s manager, Gerhard, directed him to return the notes to the purchasers of the wood and take up the contracts, and that, when Gerhard’s attention was called to the fact that the wood was left in the yard at the buyer’s risk, he said that he was going to take the contracts and lay them before the insurance companies. Gerhard testified that he told Martin to cancel the contracts and return the overdue notes, and that he said nothing about laying the contracts before the companies or the adjuster. Asked if it was not his purpose to cancel the contracts to make it appear that defendant had title to all the wood so that he could put in a claim for all the insurance, he answered that the title had not passed to purchasers who had not paid for their wood, that before the fire he instructed the yard man not to deliver any wood until it was paid for, and that the notes had not been accepted in payment for the wood, but as evidence of the amounts to be paid and the time of payment. If the jury believed Gerhard, they were bound to find that there was no actual intent to defraud the companies and no attempt to commit a fraud. '
It is well settled that to constitute fraud or false swearing, which will work a forfeiture of the insurance, there must be a false statement wilfully made with respect to a material matter with the intention of thereby deceiving the insurer. 14 R. C. L. 1343; 4 Cooley, Briefs on Ins. pp. 3415, 3416; 7 Supp. Cooley, Briefs on Ins. p. 1435; note to Alfred Hiller Co. v. Ins. Co. of N. A. 32 L.R.A.(N.S.) 457. Our own cases point to a recognition of the settled rule, although it is not expressly stated in the opinions in the two cases which refer to it: Hamberg v. St. Paul F. & M. Ins. Co. 68 Minn. 335; 71 N. W. 388; Hodge v. Franklin Ins. Co. 111 Minn. 321, 126 N. W. 1098.
As a general rule, it is for the jury to say whether there has been any fraud or false swearing. 1 Clement, Ins. p. 285.
Our conclusion is that the court was not justified in withdrawing the cases from consideration by the jury and directing verdicts for plaintiffs: There must be a new trial of the actions and the order denying it is therefore reversed and a new trial granted.