Ring v. Windsor County Mutual Fire Insurance

Contract. Insurance. Representations of Assured. Principal and Agent. Estoppel. In assumpsit on a policy of insurance against fire, it appeared that one of the questions in the application, which was in writing and signed by the plaintiffs, was, “ Is the property incumbered?” and that the written answer thereto was, “Yes, to Chas. Nash, for 1000 — including apps dwelling and 4 acres land.” The application provided that if any matter material to thebisk was not therein fully stated, or was misrepresented, thepolicy issued thereon should be void. The policy stated that the property insured was mortgaged to Nash for $1,000, and referred to the application as part of the policy. ■ The printed part of the policy contained a copy of a section of the act of incorporation of defendant company, which provided that if the property was incumbered, the policy should be void unless the incumbrance was expressed therein and in the application therefor. Plaintiffs having proved title to the property and introduced the application and policy in evidence, offered to show that when application was made for the policy in question, which was for insurance on a saw-mill, an application was also made for insurance on a house; that the mill and the house were then covered by a mortgage to Nash for $2,000; that plaintiffs stated to the agent of defendant who solicited, took, and forwarded said applications to defendant, the fact that the incumbrance was of a single mortgage covering both mill and house; that the agent thereupon, of his own motion, apportioned the mortgage in the two applications equally between the two buildings — describing the mill in one as mortgaged for $1,000, and the house in the other as mortgaged for a like sum; and that the policies issued thereon were in that respect in accordance with the applications. The court excluded the evidence and directed a verdict for defendant. Held, that on such evidence there was no such mistake in the written contract as called for its reformation in equity, and that the evidence was admissible, not to vary the written contract, but to estop defendant from proving the falsity of plaintiffs’ representations therein as a defence to the action.

Assumpsit on a policy of insurance, insuring a saw-mill and machinery therein in Hinesburgh against fire. Plea, general issue, and notice of special matter. Trial by jury, May Term, 1878, Barrett, J., presiding. The plaintiffs proved title to the property insured, and introduced the policy in evidence ; and the application, which was in writing, signed by the plaintiffs, went into the case as part of the policy. Among the questions put to the applicants in the printed part of the application was the question, “ Is the property incumbered ?” The written answer thereto was, “ Yes, to Chas. Nash, for 1,000 — including apps dwelling and 4 acres land.” The application contained the following provision : And the said applicant hereby covenants and agrees to and with said company, that the foregoing is a just, full, and true exposition of all facts and circumstances in regard to the condition, situation, and value of the property to be insured, so far as the sáme are material to the risk; and in case any matter material to the risk is not fully stated, or is misrepresented, the policy issued hereon shall be void. The policy stated that the property was mortgaged to Charles Nash for $1,000, and referred to the application as a part of the policy. And section 10 of the act of incorporation of the defendant company, extracts of which were printed in said policy, was as follows; . . . Any policy of insurance issued by said company . . . shall be deemed valid and binding on said company in all cases where the assured has a title in fee simple, unincumbered, to the building or buildings insured, and to the land covered by the same; but if the assured have a less estate therein, or if the premises be incumbered, the policy shall be void unless the true title of the assured and the incumbrances of the premises be expressed therein and in the application therefor. After proof of title and introduction of policy and application as aforesaid, the plaintiffs’ counsel made an opening statement of matters to be proved, on which the plaintiffs’ right to recover was claimed to rest. The counsel for defendant then raised a question as to whether the plaintiffs were entitled to prove by parol certain matters therein referred to, claiming that so to prove them would be to vary the written application. Questions were then put by the court to counsel for the plaintiffs relative to their position, and a further and more explicit statement was made by counsel, from which it appeared that they offered to prove that at the time the application was made for the policy in question, an application was also made for insurance on a dwelling-house, shed, and barn, and certain personal property therein ; that said mill and dwelling-house were then covered by a valid, outstanding mortgage to Charles Nash for $2,000 ; that the plaintiff stated to Hall, the agent of the defendant, who solicited, took, and forwarded said applications to the defendant, the fact that the mortgage was a single mortgage covering both mill and house; that Hall thereupon of his own motion, apportioned the mortgage in the two applications equally between the two buildings, describing the mill in the application for the policy in question as incumbered by mortgage for $1,000, as already stated, and the dwelling-house in the other application as incumbered by mortgage for a like sum ; and that the policies issued on those applications were in that respect in accordance with the applications, each policy describing the property thereby insured as incumbered for $1,000. The court thereupon declined to permit the plaintiffs to make proof by parol of those facts, but said that in “ making up the case ” they would state what the plaintiffs’ offer was. To that ruling the plaintiffs excepted. The court thereupon directed a verdict for the defendant; to which the plaintiffs also excepted. The plaintiffs are entitled to recover unless they were guilty of fraud in obtaining the insurance. Whether they, did perpetrate a fraud is a question for the jury. The plaintiffs had made a prima-facie case, and were entitled to a verdict in the absence of proof on the part of the defendant. The ruling of the court in directing a verdict for the defendant in the absence of evidence, after the statement made, was novel in the practice of .this State, and unwarranted by law. The parties had a right to submit evidence and have their respective claims passed on by the jury. If there is any evidence tending to support the issues raised, it is error for the court to direct a verdict. Andrews v. Moretown, 45 Yt. 1; National Union Bank of Swanton v. Marsh, 46 Yt. 443 ; Wemet v. Missisquoi Lime Oo. 46 Yt. 458 ; Lewis v. Pratt, 48-Yt. 358.. Contracts of insurance are to be construed most strictly against the insurers. Knowledge of affairs affecting the risk, whether stated in the written application or not, is binding on the insurer. The company is responsible for the acts and neglect of its agent, and is estopped from denying any fact made known to the agent before the insurance was effected. Gen. Sts. c. 87, s. 1• May Insurance, ss. 140-144, 498, 500; Wood Fire Insurance, ss. 400, 497; Union Mutual Ins. Go, v. Wilkins, 13 Wal. 222; Wooodbury Savings Bank v. Charter Oak Ins. Co. 31 Conn. 517 ; Webster v. Phoenix Ins. Oo. 36 Wis. 67; Harwitz v. Equitable Ins. Oo. 40 Mo. 557; Ayers v. Hartford Ins. Oo. 17 Iowa, 176. Parol evidence is admissible to show a contract of insurance, when facts affecting the risk were disclosed to the insurer at the time of making the contract, but not fully set forth in the application and policy. Wood Fire Insurance, s. 498; Lowry v. Adams, 22 Yt. 160; Wood v. Rutland f Addison Mut. Eire Ins, Oo. 31 Yt. 552; Patten v. Merchants $ Farmers Mut. Fire Ins. Oo. 40 N. H. 375; Clark v. Union Mut. Fire Ins. Go. 40 N. IL 333 ; Rowley v. Empire Ins. Oo. 36 N. Y. 550 ; Witherdl v. Maine Ins. Oo. 49 Me. 200 ; Ooston v. Monmouth Ins. Oo. 54 Me. 170 ; Peck v. New London Fire Ins. Oo. 22 Conn. 575; McBride v. Republic Fire Ins. Co. 30 Wis. 562; Columbia Ins. Oo. v. Cooper y 50 Penn. 331, and many other cases. The statement made by the plaintiffs’ attorney must be taken for thepui-posos of-this hearing, as true. That statement shows that the agent- had full knowledge of the amount of incumbrance on the property. If the defendant issued the policy with such knowledge, it waived all the requirements in the policy not fully complied with by the plaintiffs, and is estopped from setting them up in defence. Wood Fire Insurance, s. 496 ; May Insurance, ss. 497, 498,500 ; Allen v. Vermont Mut. Fire Ins. Go. 12 Yt. 366; Finley v. Lycoming Ins. Go. 31 Penn. 311; Plumb v. Gataraugus Go. Mut. Fire Ins. Co. 18 N. Y. 392; Rowley v. Empire Ins. Go. 36 N. Y. 550. The application and policy constituted a written contract, and parol evidence should not have been received to vary it. The evidence sought to be introduced would have varied it. Section 10 of the act of incorporation expressly provides that any policy shall be void unless the incumbrance be expressed therein and in the application therefor. Thus, the amount of incumbrance was material. If there was a mistake in application and policy, as the plaintiffs wish to prove, a court of law cannot correct it. That can be done only by a proceeding in chancery for that purpose; and until so corrected, it is binding, and cannot be altered or explained by parol. Wood Insurance, 10,11,190, 237, 272, 273, note 3; Holmes v. Charleston Mut. Fire Ins. Co. 10 Met. 211; Graves v. Boston Mut. Fire Ins. Go. 2 Cranch, 419 ; PhcenixFire Ins. Go. v. Garner, 1 Paige, 278, and cases passim.