Samchuck v. Insurance Co. of North America

BENNETT, J.

1, 2. This case being brought upon the adjustment, and resulting agreement to pay a certain specified'amount, must be distinguished from such cases as are brought to recover the amount of a loss or damage, directly upon the policy of insurance itself. In the latter case the burden would be upon the plaintiff to show that he had complied with the contract upon his part — that formal proofs of loss, in strict compliance with the policy of insurance, etc., had been prepared; and the actual damages that had been suffered by the fire, within the terms of the contract. But where the plaintiff alleges, and the defendant practically admits, that the loss had been adjusted, and that *696 the defendant had agreed to pay a certain sum, the burden of proof is reversed, and falls upon the defendant to show to the satisfaction of the jury, such-facts as would overturn the adjustment.

3. The defendant attempts to do this, by asserting that it was induced to make the adjustment by false and fraudulent representations upon the part of plaintiff. It is obvious, under such conditions, that it would not be enough for the defendant to show merely false statements in the proof of loss. It would be necessary that it should go further, in order to relieve itself, and show that the false statements were fraudulently made, and actually induced the defendant to agree to the adjustment, on the basis of there being $911.70 due from the defendant. If, as contended by the plaintiff, the defendant had, at the time of the execution of the insurance policy, and at the time of the loss, full knowledge of the other insurance, it could not justly claim it was induced to make the adjustment, by reason of the false statement in the proof of loss; nor would the false statement have been fraudulent, since the defendant had full knowledge of the real truth at the time.

4. It is contended on behalf of the defendant, that the reply was a departure from the complaint, because it admits the duplicate insurance and alleges knowledge and waiver on the part of the defendant and it is urged that these allegations should have been contained in the original complaint. This might be true if the complaint had been directly on the policy, but where, as in this case, there has been an adjustment and an agreement to pay, and a suit is brought upon that agreement, it will not be necessary for the plaintiff in the first instance to set up any waiver; and the allegation of knowledge and waiver was properly presented in the reply, after the defendant had undertaken *697 in its answer to present the alleged false and fraudulent representations.

5. Assignments of error numbers 1 and 2 are based upon the overruling of objections interposed by the defendant to questions asked of different witnesses, as to the value of the building, and the amount of damage caused by the fire. The objection to these questions was based upon the ground that this matter was “concluded by the proof of loss.” We do not think the objection is well taken. This evidence was offered in the plaintiff’s direct case and was probably objectionable in the first instance, upon the ground that it was properly part of plaintiff’s rebuttal, and not of his direct case, under the allegations of the pleadings, but no objection was made upon that ground, and we do not think, under the state of the pleadings, the statements in the proof of loss were conclusive upon the plaintiff.

The defendant requested the court to instruct the jury as follows, which instruction was refused and there was an exception:

“II. It is shown by the evidence that after the fire occurred, the plaintiff and the defendant agreed that the entire loss suffered by the plaintiff through the fire in question amounted to $911.70, and said agreement was reduced to writing and signed by the plaintiff Samchuck. Under the pleadings in this case the plaintiff is bound and concluded by that agreement, and the sum of $911.70 specified in said agreement must be taken by you as fixing the amount of the actual loss suffered by the plaintiff. It follows that in no event can you find for the plaintiff in a sum exceeding ten-eighteenths of $911.70, and if under the other instructions of the Court you find that the plaintiff is entitled to recover in this case, your verdict should be for the amount of $506.50.”

*698 We do not think there was any error in refusing this instruction. According to the theory of plaintiff under the pleadings and evidence presented in the case, the statement in the proofs of loss in question was put there by defendant’s adjuster, without the knowledge of plaintiff; and under such circumstances the instruction could not properly have been given.

The fourth assignment of error is based upon an instruction asked for by the defendant, which, being long, we will not quote in full. Most of it embodies correct principles of law which would, no doubt, have assisted the jury in arriving at a conclusion in the ease, however, it contained the following:

“If you find that at the time the plaintiff signed this proof, he knew it contained the statements above mentioned, then said statements were both false and fraudulent, and under the terms of the policy, such false and fraudulent statements would deprive the plaintiff of the right to recover any sum whatsoever from the defendant.”

6. We think this was altogether too strong a statement of the law in defendant’s favor. Where an action is brought upon an adjustment like this, plaintiff might have known that the statements alluded to were in the proofs of loss, and yet have had no intention to deceive, and if, as plaintiff contended, the defendant had full knowledge of the real facts, and knew that the statements therein were not true, and that there was another insurance, it would not necessarily defeat the right of plaintiff to recover.

7. In a long instruction like this one the court is not required to separate the good from the bad. It is well settled that before error can be based upon the refusal of an instruction, the whole instruction, as applied to the case must be good law and accurately stated. *699 Most of this instruction was fully covered by the general charge, and in any event it would have been error for the court to have given it in its entirety, as asked.

The fifth and sixth assignments of error are based upon the following instruction:

“ (31). If you find from a preponderance of the evidence, as above outlined, that the statements so alleged to have been made by the plaintiff are material and untrue, and you further find that the statements were willfully and knowingly and intentionally made by Samchuck, with knowledge of their falsity, the intention to deceive the defendant insurer would necessarily be implied, and need not be proved by positive evidence, for the law presumes every man to intend the natural consequences of his act; and, as stated, if you find these facts last alleged, by a preponderance of the evidence, then in that event the plaintiff cannot recover in this action against the defendant, as such facts so established would invalidate and avoid the contract upon which plaintiff brings his action.”

8. To the giving of this instruction the defendant excepted at the time because “it submitted to the jury as a question of fact, whether or not the representations contained in the proof of loss were material.” It is thought this assignment of error must be sustained. It is well settled in this court that the materiality of a provision in a contract like this is for the court.

The instruction in question is somewhat involved, and except for this one fault, is quite favorable to the defendant. It may have been the intention of the court to qualify the first clause, submitting to the jury the materiality of the false statements, and to convey to the jury an unqualified direction to find for the defendant, if the statements were willfully and knowingly made with knowledge of their falsity and with intention to deceive the defendant. It is possible the instruction did not actually mislead the jury. Still we *700 cannot say affirmatively that this was so. The instruction was challenged, and the court’s attention called to it, by an exception on this very ground, at the time it was given, and the cpurt did not correct it, and we are compelled to adjudge it reversible error.

Exceptions were also made to the following instructions :

“ (34). If, on the other hand, you find from the evidence that no such condition of affairs exists, and that the total loss has not been fully defined and described in the proof of loss, then yon would have a right to resort to the other evidence in the case. But, as I stated to you before, if the parties have committed their findings and their estimates to writing in this document known as the proof of loss, then the plaintiff would be concluded by. the statement's therein.

“(35). So that, geptlemen of the jury, the question narrows down to the consideration, first, whether or not the plaintiff falsely, knowingly and willfully, made a statement in contravention of this contract of insurance, .the provisions and conditions of which are fully set forth in these pleadings. If he did so, you need not give the case further consideration and yon should return a verdict for the defendant. If, on the other hand, you do not so find, then you would be entitled to bring in a verdict for the plaintiff, which should be five-ninths of the amount of the loss, as shown by the evidence, together with interest thereon from the twenty-seventh day of March, 1914, the date of the fire. ’ ’

We think these instructions are quite fair and, if anything, rather favorable to the defendant. Indeed, it seems to us that, with the one exception herein-before referred to, the case was submitted to the jury by the court below with a great deal of care.

Reversed and remanded to the court below for a new trial.

Reversed and Remanded. Rehearing Denied.

McBride, C. J., and Bean and Johns, JJ., concur.