44 Colo. 472 | Colo. | 1908
delivered the opinion of 'the court:
The appellant, The National Mutual Fire Insurance Company, issued a policy of insurance to Duncan, the appellee, whereby it insured a building of the latter, located at Camp Francis, against loss by fire in the sum of one thousand dollars. Subsequent to the issuance of the policy the building was burned. The company refused to pay the loss, and Duncan brought suit to recover on his policy. There was a verdict and judgment for the plaintiff, from which the insurance company prosecutes this appeal.
As a defense to the action the defendant interposed seven separate defenses. • Each of these defenses was challenged by a general demurrer, which was sustained as to the fifth and sixth. The company elected to stand on these defenses. The fifth is as follows:
*474 . “5. For a further and fifth defense, this defendant says: That the policy of insurance so issued to the plaintiff by the defendant as in the plaintiff’s complaint set forth, contained the following provision: ‘This policy is made and accepted subject to the foregoing stipulations, conditions and by-laws of The National Mutual Fire Insurance Company.’
“That article 32 of the by-laws of the defendant pompany is as follows: ‘The application, by-laws and policy constitute the entire contract between this company and the insured, and no officer, agent or representative of the company is authorized, empowered or permitted to make any other verbal or written agreement in reference to any matter pertaining thereto.’
‘ ‘ That article 15 of the by-laws of the defendant company is as follows: ‘All applications for insurance must be in writing according to the printed forms prepared by the company. The description of the property and its location must be minute and particular, and the applicant must be responsible for the correctness of the application; and any misrepresentation in reference to said property shall void such policy, and no agreement or representation other than expressed in said application shall be binding upon the company.’
“That an application to the defendant by the plaintiff was made in writing for the issuance of the policy mentioned in the complaint, which said application was duly signed by the plaintiff; that said application contained the following provisions: ‘ The above statements, notes and by-laws, as printed, shall be the sole basis of this contract for insurance between said company and the insured, and are hereby made a part of this policy, if issued.
“ ‘Having read or heard read the foregoing application, and fully understanding its contents, I war*475 rant it to contain a full and true description and statement of the condition, situation as per diagram, value, occupation and title of the property to he insured in said company, and I warrant the answers' to each of the foregoing to he true. ’
“That said policy of insurance .contained the following provision, to wit: ‘This entire policy shall be void if the insured has concealed or misrepresented, in writing or otherwise, any material fact or circumstance concerning this insurance or the subject thereof.’
“And the defendant further says that in the plaintiff’s application for said policy of insurance, the plaintiff falsely stated and represented that the building to be insured was twenty by thirty feet in dimensions, whereas,-in truth and in fact, said building was only sixteen by twenty-four feet in dimensions.”
The sixth defense contains the same averments as the fifth (so it is claimed by counsel for defendant, and not denied by counsel for appellee), except that in place of the last paragraph relating to the dimensions of the insured building, it is charged:
“And the defendant further says that in the plaintiff’s application for said policy of insurance the plaintiff falsely stated and represented that the cash value of the insured building was fifteen hundred dollars; whereas, in truth and in fact, the cash value of said building at the time of said application, and at all times thereafter, did not exceed the sum of two hundred dollars.”
In support of error assigned on the ruling of the court sustaining the demurrer to the fifth defense, it is urged (1) that the averments relating to the dimensions of the building state a violation of the warranty by the defendant, that his representation regarding the insured property was true; and (2) state
There is certainly no merit in the claim that according to the averments of the defense under consideration, plaintiff warranted that' his statement regarding the dimensions of the building was true. He warranted that his answers touching the description and statement of the condition, situation, value, occupancy and title of the property were true, but none of these matters referred to the dimensions of the property involved.
The provision of the policy with respect to misrepresentations only goes to those representations made by the insured which are material to the risk. In some instances, perhaps, the mere statement of the misrepresentations alleged to have been made by the insured would he sufficient from which to deduce the legal conclusion that they were material to the risk; but when that is not the case the insured must state the facts from which it is made to appear that the misrepresentation was material. In order that the falsity of a representation in an application for insurance may he a defense to an action on the policy, its subject-matter must be something which the insurer was entitled to know, and which probably influenced it in determining whether it would enter into the contract.—Travelers’ Ins. Co. v. Lampkin, 5 Col. App. 177; Dingle v. Trask, 7 Col. App. 16; Wheeler v. Dunn, 13 Colo. 428; Adams v. Schiffer, 11 Colo. 15; May Ins., §§ 181-184.
Where a party seeks to avoid a transaction upon the ground that misrepresentations were made to him, it must be made to appear that such misrepresentations were a factor which induced and influenced him to act, so that in defenses of this character it must at least appear in connection with other
According to the averments of the sixth defense, the plaintiff warranted that his answer respecting the value of the property insured was true. It is charged that he falsely stated the cash value of the insured building to be $1,500, when, in truth and in fact, such value did not exceed the sum of $200. The statement of value was contained in the application; at least, it is so stated in the defense under consideration ; and by the averments of that defense it appears that the application is a part of the contract of' insurance. Where a statement in an application for insurance is a warranty and the application is made a part of the contract, the question of the materiality of such statement does not arise-, and no recovery on the policy can be had when it appears that the statement warranted to be true is not true.—Travelers’ Ins. Co. v. Lampkin, supra; Bennett v. Agricultural Ins. Co., 50 Conn. 420; School District v. State Ins. Co., 61 Mo. App. 597; Prudential Ins. Co. v. Hummer, 36 Colo. 208; Webb v. Bankers’ Life Ins. Co., 19 Col. App. 456.
In cases of this character, some facts warranted to be true must be literally so, while with respect to
Counsel for plaintiff calls our attention to the fact that from the record it appears the application contains the following language: “The value of the property being estimated by the applicant”; and because- of this statement, urges' that plaintiff was only asked for, and merely gave, his opinion of the value. It is doubtful, to say the least, if we would be justified in looking elsewhere than to the defense itself for the purpose of determining its sufficiency; but, waiving this question, we do not think the language upon which counsel relies relieves plaintiff from the charge of over-valuation. “Estimate,” as defined by Webster, is to “judge and form an opinion of the value of from imperfect data; * * * to fix the worth of roughly or in a general way”; and while it is true that where a party merely estimates the value of an article, considerable latitude must be allowed for discrepancies between his estimate and the real value, nevertheless, where an applicant for insurance estimates .the value of the property to be insured, and warrants his statements to be true, he is
A company about to issue a policy of insurance upon a building has the right to be fairly informed by the owner, when requested, as to what the reasonable value of the property is, so that it may be protected from assuming a risk so nearly equal to the actual value of the property insured that the effect might be to cause the owner not to exercise care in protecting his property. If we were justified in looking outside of the defense itself for the purpose of determining its sufficiency, or if we should consider extrinsic facts for the purpose of ascertaining whether or not the error committed in overruling the demurrer was prejudicial, we might call attention to the fact that although the policy was for $1,000, the jury only returned a verdict for the sum of $725 as the loss sustained by the plaintiff by the total destruction of the building insured. Counsel for plaintiff urges that the defense does not allege that the plaintiff warranted the value of the building to be $1,500, but merely represented it was of that value. This contention is based upon the statement of the last paragraph, which is to the effect that plaintiff falsely stated and represented the cash value of the insured premises to be $1,500. In construing an affirmative defense, the ultimate facts alleged must be determined from the entire defense, and not merely from one or more of the paragraphs thereof. From the other averments of the defense, which we have assumed to be as counsel for defendant claims, it appears that' the application was made a part of the policy, and that in such application the plaintiff warranted that his answer touching the value of the property was true. So that, construing this defense as a whole, it appears that there was a
Counsel for plaintiff also contends that the defense under consideration is insufficient because it does not allege that the company has repaid the premium-or any part thereof to the insured. The company is not seeking to rescind its contract of insurance, but to avoid liability thereon because of the fraud of the insured. Where a policy by its terms is void by reason of fraud on the part of the insured, the premium cannot be recovered back.—Aetna L. I. Co. v. Hall, 10 Ill. App. 431; Freismuth v. Agawan M. F. I. Co., 64 Mass. 588.
. The demurrer to the sixth defense should not have been sustained.
By the third defense it was alleged that the policy contained the following provision:
“This entire policy, unless otherwise provided by agreement indorsed hereon or . added hereto, shall be void if the insured now has, or shall hereafter make or procure any other contract of ■ insurance, whether valid or not, on the property covered in whole or in part by this policy. ’ ’
It is then charged that at no time was any agreement whatsoever respecting other insurance indorsed on or added to the policy. It is further alleged in substance that plaintiff, since the issuance of the policy by defendant, procured another contract of insurance in the sum of five hundred dollars on the same property, and that he had not given it any notice whatsoever that he had procured such contract of insurance. Plaintiff has assigned as cross-error the action of the court in overruling the demurrer to this defense, and further contends the evidence dis
The crucial question is whether there was an assumption of risk by the company which it is claimed issued the second policy, and what insured understood regarding such risk. According to the testimony, plaintiff applied to Mr. Coon for additional insurance in the Mercantile Fire & Marine Insurance Company of Boston. This application was made subsequent to the issuance of the policy by defendant. Mr. Coon testifies, in substance, that plaintiff applied to him for additional insurance; that he did not remember definitely what was said as to when the policy representing such insurance should go into effect; that he thought it was his intention that it should not take effect until he heard from the company; that his recollection wás that he said he did not know whether the company would accept the risk, and that he would send on the policy for its approval; that he did not extend any credit to Mr. Duncan for the premium, and that Duncan did not pay the premium at that time; that he kept the policy in his office,.and sent the report to the company at St. Louis, and in due course of business an order was received cancelling it. Plaintiff testified in substance that he applied to Coon for a $500 risk in the Mercantile company ; that Coon filled out the policy and placed it in his desk, and said it would not go into effect until he was so advised by the company; that he did not pay any premium to Mr. Coon, the latter saying that it was not necessary as there would he no risk until he
From these statements it clearly appears that no risk was assumed by the Mercantile Fire & Marine Insurance Company; that there was no attempt on the part of the agent to make any arrangement which would bind the company until he had advised with those in authority over him; and that the plaintiff understood that the policy written by the agent should not take effect until approved by the company. The requirement in a policy that other insurance covering the same property must be assented to in writing and indorsed on the policy is valid; but that provision is not violated when it appears that the company to which application for additional insurance was made, as well as the owner, understood that no risk was ever assumed by the former.
The seventh defense appears to be based upon a violation of the vacancy permit clause contained in the policy. This clause is as follows:
“If any building becomes and remains vacant for five days, the policy thereupon shall become void, unless -continued by consent of the company. It shall be the duty of any owner of any building or buildings insured by this company, in case such building shall become vacant, to report the same to the secretary at the home office within five days of such occurrence, and as often as every ten days thereafter during said vacancy. Any failure to make such report ’shall render his policy void. ’ ’
It is also alleged in effect that on the 12th day of September, 1903, the company issued the plaintiff a permit that the building insured might remain vacant for a period of thirty days from that date; that' on the 27th day of October following, a. second vacancy' permit was issued, allowing the building to remain , vacant for the period of sixty days from that date;
When a clause in a contract of insurance is susceptible of two constructions, that one will he adopted which is most favorable to the assured.—German Ins. Co. v. Hayden, 21 Colo. 127; Strauss v. Phoenix Ins. Co., 9 Col. App. 386.
Our conclusion regarding the construction of the provision under consideration is further strengthened by the fact that, according to the averments of the defense, no reports weie made by the insured relative to the building being vacant for the period
An instruction was asked by defendant to the effect that if the jury found from the evidence that the plaintiff did not, during the period for which a permit for the insured premises to remain vacant had been issued, report such vacancy to the company every ten days the premises remained vacant after the issuance of such permit, the verdict should be for the defendant, was refused. There was no error in this refusal, for the reasons already given.
An instruction on behalf of the defendant was requested, to the effect that if it appeared the insured premises were vacant and unoccupied for five consecutive days between October 12th and the 27th, without the consent of the company, that the policy was void. This was refused. The refusal was not error. It appears that the company, with full knowledge that the building had -been vacant during the period covered by the instruction, issued a further permit. Such action was a waiver of whatever rights it might have had under the clause of the policy above quoted, for the vacancy between October 12th and October 27th.
Error is also assigned upon the action of the court in not instructing the jury on the question of vacancy. Mere nondirection is not reversible error, unless a specific instruction, good in point of law, covering the omission was requested and refused.
The substance of the fourth defense is that in the written application of plaintiff it was stated that he had a ninety-nine-year lease on the ground on which the insured building was located, which statement, it is alleged, was not true, in that plaintiff did not have a lease upon such ground for any period of time at all. The proof shows that the ground upon which the building was situated belonged to the Adit mining company, and that he would be compelled to remove it at the pleasure of the company, but that this right of the company would not be exercised unless' the ground was needed for mining purposes, and that the necessity for siich use was exceedingly remote. According to the further averments of the defense under consideration, it appears that appellant warranted the title to the property insured to be as. represented in his application, and the company therefore claims that under the proofs the policy was void, because of its provisions that misrepresentation regarding the title would have this effect. The evidence discloses, practically without dispute, that plaintiff talked with Mr. Coon, the representative of the defendant company, regarding his title to the insured premises; and informed him that he had no written lease but, under his arrangement with the company owning the ground upon which the building was situated, he had a right to such ground so long as the company did not desire to use it for mining purposes, and that from this information he and the agent concluded that his title was the equivalent of a ninety-nine-year lease. It thus appears that the agent of the company had full knowledge of the condition of the title to the ground, and having issued the policy with such knowledge, the condition therein avoiding the policy if the title to the property insured was not
Knowledge of the status of title to property insured and the statements ■ of the assured regarding the title are necessary for the protection of insurance companies, so that they may reduce the temptation to incendiarism to a minimum, and also prevent the owner from being careless with respect to losses occasioned by fire. But where, as in this instance, the company, through its agent, has full knowledge relating to the title of the insured premises, and concludes from the information obtained from the owner, which is correct, that his title is equivalent to a ninety-nine-year lease, and so writes -it in the application, the company will not be permitted to say that such statements were false. The policy contained the following clause:
“This entire policy, unless otherwise provided by agreement indorsed hereon or added .thereto, shall be void * * * if the subject of insurance be a building on ground not owned by the insured in fee simple.”
The second defense interposed by the defendant was based upon this clause. An instruction on behalf of the defendant, to the effect that if it appeared from the testimony that at the time of the issuance of the policy in suit, the ground upon which the insured building was situate was not owned by the plaintiff in fee simple, the verdict must be for the defendant, was refused. There was no error in this refusal. The company was as much bound by the provision in the by-laws that the application, by-laws and policy should constitute the entire contract between it and the insured, as was the latter. The application stated-that the title of plaintiff was a ninety-nine-year lease,
We do not deem it necessary to notice in detail other errors assigned by appellant, nor do we regard it as necessary to consider further than we have the cross-errors assigned on behalf of the appellee.
For the error of the court in sustaining the demurrer to the sixth defense, the judgment of the district court is reversed and the cause remanded for a new trial. Reversed and remanded.
Mr. Justice Campbell and Mr. Justice Bailey concur.