Blaeser v. Milwaukee Mechanics' Mutual Insurance

Cole, J.

It would be a work of considerable labor to notice *36 all the exceptions taken to the rulings of the court on the trial of this cause, and we shall not attempt to do so. Our attention will be confined to exceptions taken to one or two portions of tbe charge of the court, which- we deem fatally erroneous and of a character calculated to prejudice the rights of the defendant.

The action was upon a policy of insurance. Among other defenses, the company set up in the answer and relied upon the defense, that the fire by which the insured property was destroyed originated through the willful act and procurement of the plaintiff. In the general charge, and likewise upon the jury coming into court for further directions, the court instructed, in substance, that where the company sets up such a defense to defeat a recovery upon the policy, it should be held to precisely the same rule in respect to the degree or quantity of evidence that would warrant the jury in finding the plaintiff guilty on a trial for the crime of arson; and that unless they were satisfied' beyond a reasonable doubt of the plaintiff’s guilt, they-must find in his favor upon that issue. This instruction,* which imported into the trial of a civil cause the rule applicable to criminal cases, was, we think, erroneous. It required the defense to be established by full proof beyond a reasonable doubt, and directed that no evidence less cogent would justify the jury in finding for the company. It is familiar doctrine in criminal trials, that the truth of the charge must be established by the prosecution beyond a reasonable doubt, and unless that degree of conviction is produced upon the minds of the jury, it is their duty-to acquit the accused. This was a rule originally adopted in favorem, viten, in the days of a severe sanguinary penal code, when the consequences of an erroneous conviction were irreparable. But we see no satisfactory reason for applying the same rule to civil causes, which frequently must be decided upon the preponderance of evidence. It is true there are a few authorities which hold that where the defense to an action involves the proof of a crime, the fact must be estab *37 lished by the same direct positive evidence as though the party implicated were on trial for the criminal offense. But it seems to us the reason and weight of judicial opinion is the other way, and in support of the rule adopted by this court in Washington Union Ins. Co. v. Wilson, 7 Wis., 169 . It was there held that in an action upon a policy of insurance, where the de* fense was that the plaintiff willfully set fire to the building insured, the rule of evidence was the same as in other civil cases, and the jury must determine the issue upon the weight or preponderance of evidence. This case was followed in Wright v. Hardy, 22 Wis., 348 . It is suggested that these cases are in conflict with the subsequent decisons in Pryce v. Security Ins. Co., 29 Wis., 270 , and Freeman v. Freeman, 31 id., 235, and must be considered as overruled. But this is not our understanding of those decisions. In Pryce v. Security Ins. Co., the chief justice, while considering the correctness of an instruction given at the request of the plaintiff as to the degree or quantum of proof required to establish the defense that the plaintiff set fire to the building insured, refers to the rule laid down in Washington Union Ins. Co. v. Wilson, and cites rather approvingly some authorities which hold differently, but says that it was immaterial whether the court was right or wrong in giving the instruction, because there was really no evidence to which such a request could apply. It seems to me, however, that the chief justice was mistaken in supposing that Prof. Greenleaf approved the doctrine of those cases which hold that the rule upon this question is the same in civil and criminal cases. In 1 Greenl. Ev., § 65, I understand the learned author to be considering quite a different question, namely, variance between the allegation and proof in criminal prosecutions; while in 3 Greenl. Ev., § 29, the distinction is noted between civil and criminal cases in respect to the degree or quantity of evidence sufficient to justify the jury in deciding the fact in issue. The cases in Maine cited by the chief justice in opposition to the doctrine in 7 Wis. are greatly shaken, if not *38 directly overruled, by Bilis v. Buzzell, 60 Me., 209. But it seems to us there is nothing in the case in the 29 Wis. which warrants the inference that the court in the decision there made intended to overrule the doctrine of the previous cases on this question. In civil actions it is the duty of the jury to weigh the evidence carefully, and to find for the party in whose favor the evidence preponderates, although it be not free from reasonable doubt. 3 Greenl. Ev., § 29; Wright v. Hardy, supra, 356 . Freeman v. Freeman was an application for a divorce on the part of the wife on the ground of cruel and inhuman treatment. The husband recriminated, charging the wife with adultery. This court thought that such a charge should not only be sustained by a preponderance of testimony, but should be affirmatively established to the satisfaction of the court beyond a reasonable doubt. And the reason for the rule is given, that the action partakes strongly of the nature of a criminal proceeding, so much so as to make it necessary that the party making the charge of adultery should establish, the truth' of the fact to a reasonable and moral certainty. But the rule may well be held to apply to an action for a divorce, which is not at all analogous to a case like the one at bar. The former is not unfrequently attended with the most serious and painful consequences; destroying the family; leaving a stain upon the name of innocent offspring; and affecting the property rights and civil status of the parties. It would seem, therefore, eminently proper, in giving judgment which is followed by such results, that the court should proceed with great caution, and require that the charge of adultery be proven by evidence which will “satisfy the human mind, and leave the careful and guarded judgment of the court free from any conscientious and perplexing doubts as to whether the charge be proved or not” But no such rule would seem applicable or called for in an action to recover on a policy of insurance. If the company attempts to defeat a recovery upon the ground that the plaintiff willfully destroyed the property insured, it must of course *39 establish its defense to the satisfaction of the jury; but this may be done by the preponderance of evidence, although it be not free from reasonable doubt.

But the counsel for the plaintiff insists that the company really produced no evidence on the trial which tended to show that the plaintiff set fire to the mill destroyed, and that, consequently, whether the charge we have been considering was right or wrong, it could not possibly have prejudiced the defendant. But this position, we think, is not sustained by the record. There was evidence sufficient to carry the question to the jury, that the plaintiff set fire to the property. We shall not dwell upon it, and it would manifestly be improper for us to express any opinion upon its weight or credibility. These are questions for the consideration of the jury alone. It is said that the testimony, for instance, of Dr. Conrad was improbable and unworthy of credit. However this may be, it is plain that it should have been submitted, with all other circumstances and facts bearing upon the issue', with proper instructions, for the decision of the jury.

There is another portion of the charge excepted to, which we deem it proper and necessary to notice, which is where the court instructed the jury that although there might be misrepresentations in the application, yet the company could not avail itself of them in an action upon the policy, without first tendering back to the insured the amount of premium paid. The learned circuit judge held upon this point that the rule in regard to the rescission of contracts for fraud was applicable; that when a party seeks to avoid a contract on that ground, he must put the other party to the contract back to the condition in which he stood prior to the transaction. This is undoubtedly á well settled rule in regard to the rescission of contracts; but we think it has no application to the case before us, and for this reason. By the condition of the policy itself, any fraudulent misrepresentations of a fact material to the risk avoids the contract It is not necessary that the company refund the pre *40 mium'in order to avail itself of this stipulation in the policy. The representations in the application constitute the basis upon which the risk is taken, and the policy declares that if there is any misrepresentation or concealment the insurance shall be void and of no effect. The company enters into the contract relying upon the truth of the representations; and if it has been misled or deceived upon matters material to the risk, it may well say that no contract was ever made; that there was no concurrence of assent upon the same facts. In this case the insured declared that the several representations made in the application by way of answer to the questions asked, were “made warranties,” by which he was bound;, and we know of no case which holds that if the property is not as warranted, or there are fraudulent representations in a matter material to the risk, the company cannot avail itself of that defense unless it first tender .back to the insured the premium paid. In Campbell v. New England Mutual Life Ins. Co., 98 Mass., 881 , Justice Wells says: “Representations to insurers, before of at the time of making a- contract, are a presentation of the elements upon which to estimate the risk proposed to be assumed. They are the basis of the contract: its foundation, on the faith of which it is entered into. If .wrongly presented in any respect material to the risk, the policy that may be issued thereupon will not take effect. To enforce it would be to apply the insurance to a risk that was never presented.” p. 890.

These remarks are sufficient to show that the position of the defendant in attempting to defeat the action on the ground that fraudulent representations were made in the application, is essentially different from that held by a party who seeks to rescind a contract on the ground of fraud. The two cases are not to be confounded, as they seem to have been by the court below.

For these errors the judgment of the circuit court must be reversed, and a venire de novo awarded.

By the Court. — It is so ordered.