Allen, Safford & Co. v. Vermont Mutual Fire Insurance

The’opinion of the court was delivered by Bennett, J. — This case involves several imjiortant questions, and some of them are not without considerable difficulty. It has been argued at great length and with much ability ; but, from the shortness of the time allowed us for an examination, we are not prepared, at this time, to come to a conclusion on all the questions which the case presents. There is, however, one point upon which the court are all satisfied that the defendants must have anew trial, and we are, therefore,induced to decide the case on that single point, leaving all other questions open. It seems after this policy had been executed, and after the company had sustained a loss on some other factory, insured by them, at Bennington, the company passed a vote, directing that a member of the company should be appointed to go and examine the loss at Bennington; and also examine the factories as to their safety and internal construction; and Thomas Reed was, on the 2d day of February, 1836, appointed to perform this duty. It appears, also, that evidence was given to the jury tending to prove, that, in pursuance of said vote, an agent of the company visited Bennington and examined the factories there, and that, subsequently, the company received of the plaintiffs an instalment of forty four dollars on the policy in question. On this part of the case, the jury were told that 372 ^ they found that the agent of the company went, in pursuanee of the vote af the company, to the factory in question, ^ie compa.ny afterwards received the instalment, the defendants were liable on the policy of insurance, although they should find that the sizing apparatus was material to the rjg|S) au(j liad been omitted in the application. This was evidently incorrect. The vote of the company did not contemplate that the agent should examine the factories, “ as to their safety and internal construction,” with .a view of comparing them with the applications, in order to enable the company to decide whether any of the policies were fraudulent. The object seemed to be to make a general examination of them, and there is no evidence that the agent,even, knew what the representation was, as specified in the application, upon which the policy in question was executed. There is no evidence that the agent ever saw, or had any knowledge of the existence of the sizing apparatus. The jury were not, by the instructions given them, required to find such knowledge. The court say, if the agent, in pursuance of the vote of the company, went to the factory in question, and the company afterwards received the instalment, it is sufficient. It is not necessary to decide, whether, if this policy was obtained through the fraudulent suppression of what was material to the risk, it was competent for the company to waive the objection by subsequent matter, so as render valid the policy. If the agent had been clothed with power to examine as to the validity of the policy, it is clear that the reception of a subsequent instalment could not operate as a waiver of such suppression, unless the agent had knowledge, at the time of the payment, of the fact suppressed. This knowledge the jury should, at least, have been told they must find, before they could give any effect to the reception of the instalment. On this ground, then, the judgment of the county court must be reversed and the cause remanded for a new trial.