Thompson v. Phœnix Insurance

Symonds, J. On demurrer, to a declaration in case alleging that the defendants, by fraud, induced the plaintiff to cancel for two hundred and fifty dollars a policy of fire insurance for one thousand dollars, after the loss insured against had occurred. The arguments upon the demurrer raise the single question, whether the representations made by the defendants to procure the settlement, admitting all that the declaration avers in this respect, were in the legal sense fraudulent, so as to support an action to recover the damages which the plaintiff sustained, by relying and acting upon them. The first count of the declaration sets forth that the company, " well knowing the premises, but intending to cheat and defraud the plaintiff out of the benefit of his said policy, and the money due him thereon, fraudulently and deceitfully represented to the plaintiff, that by reason of his not living in the house at the time of its being burned, he had so increased the risk that the company was not bound to pay anything, that the policy was null and void and of no effect, benefit or use to the plaintiff.” The second count charges, substantially, the same fraudulent representation on the paid of the authorized agent of the company. I. If these declarations of the agent of the insurance company are regarded as statements of the law of insurance, of the legal conditions on which the right of recovery in such cases depends, [60] they are not actionable, though false. The cases cited for the defendants are sufficient, if authority or argument were needed, to support the statement that under such circumstances a man has not a right to rely, except at his own peril, upon the representations of the avowed agent of the adverse interest, as to what the law will or will not do, or will or will not permit to be done. Common prudence and common sense would seem to be, in all ordinary cases, sufficient safeguards against frauds of that character; and the declaration does not aver exceptional circumstances to give the right of action in the present instance. Compare Rashdall v. Ford, L. R. 2 Eq. 750. II. If it be said that the representation of an increased risk by non-occupancy, rendering the policy void, was one of fact, and not of law, still if it was only the expression of an opinion, it does not sustain the action, though the other facts alleged are conceded. Upon this branch of the case the question is, then, are the averments of the declaration such that the plaintiff has a right to go to the jury upon the claim that the false representation was made as a statement of fact, or is it a conclusion of law upon the demurrer that the declaration charges an expression of opinion only. In Stubbs v. Johnson, 127 Mass. 219, it is said: "It is often impossible to determine, as matter of law, whether a state.ment is a representation of a fact, which the defendant intended should be understood as true of his own knowledge, or an expression of opinion. That will depend upon the nature of the representation, the meaning of the language used, as applied to the subject matter, and as interpreted by the surrounding circumstances, in each case. The question is generally to be submitted to the jury.” But as the language of the court implies, this is not always true. In Belcher v. Costello, 122 Mass. 189, it is said, as matter of law, that the representation that a man is good, financially, "taken by itself, is not the statement of a fact, but the expression of an opinion merely.” In the present case we think the latter alternative proposed, that the declaration alleges only an expression of opinion, is the true one. Whether in point of fact, in a particular case, the circumstances of which are equally in the knowledge of both [61] parties, tbe risk from fire was' increased by non-occupancy of a building, or not, can be nothing more than a matter of judgment; and a representation in regard to it cannot reasonably be understood as having any more weight than that which attaches to the opinion of the man who makes the statement, It is true that, in the trial of a case, the question might be submitted to the jury as one of fact for them to determine, but a witness would not be asked the direct question, whether the risk was increased or not. It would be submitted to the judgment of the jury upon the facts of the case. So of the insurance agent, if he represented the risk as increased in that way, he might be stating his opinion falsely, and -with intent to deceive, but the falsehood was in stating one opinion when he held another, not in putting a statement into the form of an opinion when he had positive knowledge to the contrary. If an opinion is untrue in this latter sense, it may be actionable, as in Birdsey v. Butterfield, 34 Wis. 52, where the plaintiff, selling cattle, expressed the opinion that they would weigh nine hundred pounds or more per head, when he had already weighed them and found that their average weight was considerably less. But where the whole subject, in fact, rests in the opinion of the parties, and cannot reasonably be understood otherwise, false expressions on either hand do not generally constitute fraud in law. Our conclusion is, that whether the representations set forth in the declaration, be regarded as of law, or of fact, they are not sufficient to support the action. In either case they were expressions of opinion from the agents of a corporation whose interests were known to be directly hostile to the plaintiff, and as a prudent man he ought not to have relied upon them. The valuable opinions in Ætna Ins. Co. v. Reed, 33 Ohio St. 283, and Mayhew v. Phœnix Ins. Co. 23 Mich. 105, cited for the defendants, were rendered upon facts approaching more or less nearly to the facts of this case as set forth in the pleadings, and tend strongly to support the conclusion we have reached. Exceptions sustained. Appleton, C. J., Barrows, Daneorth, Virgin and Peters, JJ., concurred.