Dolan v. Missouri Town Mutual Fire Insurance

ELLISON, J- This is an action on a policy of fire insurance, insuring gQods, wares and merchandise for $2,500. Plaintiff recovered a judgment in the circuit court. 1. Eor the purpose of a proper disposition of the case it will suffice to omit some detail and state the facts in a general way. Plaintiff made written application for the present insurance, in which, and in the policy afterwards issued, he warranted that he had no other insurance than that which he stated in the application. . In fact, he did have other substantial insurance. He likewise stated that he had not had losses by fire theretofore when in fact he had had such loss. He likewise stated as facts which, if true, made the insurance not more than three-fourths of the value of his stock, but which defendant claims were untrue and under instruction number — 672 — ten, given for plaintiff, may be assumed to be untrue. Plaintiff’s instructions as to these false representations' were based on his construction of the Laws of 1897, page 130, and declared, first: that though the representation as to other insurance was false, yet, if the jury believed it was not material to the risk, they would find a verdict for plaintiff. The statute referred to reads as follows: “Section 1. That the warranty of any fact or condition hereafter made by any person in his or her application for insurance against loss by fire, tornado, or cyclone, which application, or any part thereof, shall thereafter be made a part of a policy of insurance, by being attached thereto, or by being referred to therein, or by being incorporated in such policy, shall, if not material to the risk insured against, be deemed, held and construed as representations only,-in any suit brought at law or in equity in any of the courts of this State,- upon such policy to enforce payment thereof, on account of loss of or damage to any property insured by such policy. “Section 2. That the warranty of any fact or condition hereafter incorporated in or made a part of any fire, tornado or cyclone policy of insurance, purporting to be made or assented to by the assured which shall not materially affect the risk insured against, shall be deemed, taken and construed as representations only in all suits at law or in equity brought upon such policy in any of the courts of this State.” This statutes does not avoid all warranties, but only such as are not material to the risk. All matters warranted which are material to the risk are left just as they were before the statute. It so frequently happened that immaterial matters were made the subject of warranty in fire policies, with the result of avoiding them, the Legislature has deemed it prudent and wise to cut off such defenses. But the act quoted can not be fairly interpreted to mean that all warranties are an — 673 — nulled and shall be no more than representations. This is the ruling on similar statutes in Pennsylvania and Massachusetts. March v. Ins. Co., 186 Pa. St. 629; Brown v. Ins. Co., 172 Mass. 498. 2. Plaintiff’s instructions, in effect, recognize this, but they submit the materiality of the risk to the jury. We think this was error. When the risk is undoubtedly material; when it is of such character as to strike all informed and fair minds alike, it is a question of law for the court and should be.so declared. March v. Ins. Co., and Brown v. Ins. Co., supra. 3. Further, or additional insurance, in any substantial sum, is plainly material. Aloe v. Ins. Co., 147 Mo. 561, 579; Hutchison v. Ins. Co., 21 Mo. 97; Barnard v. Ins. Co., 27 Mo. App. 26. A single illustration will bring-to the mind of any one the great increase of hazard if one owning property valued at $1,000 could by successive concealments and misrepresentations get insrrrance aggregating $5,000. But this policy contained the following clause: “It is a part of the consideration of this policy and the basis upon which the rate of premium is fixed that the assured shall maintain insurance on the property covered by each item of this policy to the extent of at least seventy-five per cent of the actual cash value thereof, and that failing so to do, the assured shall be an insurer to the extent of such deficit and to that extent shall bear his, her or their proportion of any loss * * We interpret this clause to be a consent of the insurance company that plaintiff might take out insurance to an amount not exceeding three-fourths of the value of the property. In such view it was not necessary for plaintiff to notify defendant of other insurance up to that point. Strauss v. Ins. Co., 9 Col. Ct. App. 386; Insurance Co. v. Ewing, 92 Fed. Rep. 111. — 674 — 4. But plaintiff’s instruction number ten carried the ease beyond this limit, for it announced to the jury that if plaintiff did take out insurance beyond the point of three-fourths of the value he could still recover, though only in á proportionate amount. This could only be justified by the terms of the policy itself, or by the law. It was clearly in the face of both. The policy only consented to three-fourths insurance and prohibited any amount in excess of that, at least unless consent was given. And we have seen that the law only restricts the power of the company to enforce warranties when they relate to immaterial representations. 5. The remaining representation was that stating that he, plaintiff, had not, theretofore, had losses by fire when in fact he had. Whether this was a material representation, we think, was, under the evidence, properly submitted to the jury by instruction number two. The losses which plaintiff had theretofore sustained by fire were when he had' no insurance and were the result of fires originating in other buildings with which plaintiff had no connection and were doubtless merely accidental so far gs plaintiff was concerned. If his other fires had originated in or on his own premises, especially if there was any matter of suspicion of incendiarism connected therewith, a different question would be presented. 6. If any question of-waiver should arise we would say that if defendant, through its agents, after becoming aware of its defenses, have led plaintiff into additional expense and trouble in preparing proofs of loss, it would be considered as having waived such defenses of which it was aware at the time. This has been so ruled in Missouri and so it has been likewise ruled in other States. Burnham v. Ins. Co., 117 Mich. 142; Roby v. Ins. Co., 120 N. Y. 517; Weed v. Ins. Co., 116 N. Y. 118; Titus v. Ins. Co., 81 N. Y. 410. The evidence on the subject of waiver, as preserved in the record, is quite indefinite — 675 — and unsatisfactory and no issue of this nature was submitted to the jury by the instructions, it being considered, perhaps, that there was not enough evidence to justify it. 7. As before stated, the Law of 1897, quoted above, does not interfere with the force or effect of warranties which are material to the risk. It would, therefore, be good pleading for the answer to allege that the warranties were material to the risk assumed, though it need not be alleged that they were fraudulently made, since, if the matters warranted to be true are material, but false, they will avoid the policy though not fraudulently stated. Heretofore, in this State, it has not been considered that in insurance or any other contracts, warranties could not be asserted against the warrantor unless he made them with intent to cheat and defraud. Our adjudications all show to the contrary. Defendant’s answer fails to allege that the warranties set up therein were material to the risk and but for which the policy would not have been issued. But no objection was made on that account and the case was tried throughout on the theory that the issues were made up. Plaintiff himself, in his instructions, affirmatively submits that question to the jury. It is now too late to insist on such point. The acts of plaintiff’s son were for the plaintiff and should be considered as done by the plaintiff himself. Evidence bearing against this proposition should be excluded. So, as to whether the son read the papers signed by him, he must be taken to have read them. The court’s instructions for defendant on these heads were right, but the evidence thereon should have been excluded. We have had some difficulty in arriving at a conclusion whether the judgment should be merely reversed or whether it should be reversed and the cause remanded. But having concluded from the indefiniteness of the record that all on the — 676 — subject of waiver may not have been shown, we think it perhaps better to remand the cause. Reversed and remanded. Smith P. J., concurs; Gill, J•, absent.