Adema v. Lafayette Fire Insurance

The opinion of the Court was delivered by Todd, J. This is an action on a policy of insurance issued by the defendant company, of which the plaintiff is the transferee, for $1500, the property insured having been destroyed by fire. The plaintiff appeals from a judgment against him. The policy was taken out by one Jean Poméz, who owned only one-eighth of the building insured, the remaining seven-eighths belonging to his minor child. The policy issued in favor of Poméz alone. Among other grounds of defense against the action urged is that the insured concealed and failed to disclose the true ownership of the property, in violation of one of the conditions of the policy. Section 4 of the policy provides: “ Sec. 4. If the interest of the assured in the property be any other than the entire, unconditional and sole ownership of the property, for the use and benefit of the assured, it must be so represented to the company and so expressed in the written part of this policy, otherwise the policy shall be void.” Sec. 14. Whenever the insured does not enjoy the full ownership of the property insured, he is required to disclose to the company the nature of his insurable interest and to cause the same to be inserted in the policy, otherwise the insurance shall be null and void.” These conditions were part of the contract between the assured and the company. As expressed by an eminent writer on the subject of insurance: [663] policy, although, not referred to therein. So where the policy is in terms made subject to the terms and conditions of the application for insurance, they are to he construed together as forming the contract; so where the policy is in terms founded on the application.” Wood, p. 273; [662] “ When the policy is printed on one half, and the conditions on the other half, of the sheet, the conditions are to be treated as a part of the [663] And again: “ Where the conditions are written or printed on the face of the policy, the assured by accepting it becomes bound thereby, and is estopped from denying that he assented thereto.” Wood,'9; 2 La. 399. The concealment or failure to disclose his interest in the property cannot be regarded as an immaterial circumstance and of no legal significance in its bearing on the contract, for the reason that the guarantee for the preservation of the property is dependent chiefly upon the extent of the assured’s interest in it. * On this point, we quote the following language from a decision of the Supreme Court of the United States, rendered by C. J. Marshall: “ Generally speaking, insurances against fire are made in the confidence that the assured will use all the precautions required to avoid the calamity insured against, which would be suggested by his interest. The extent of this interest must always influence the underwriter in taking or rejecting the risks and estimating the premium. So far as it may influence him in this respect, it ought to be communicated to liim. Underwriters do not rely so much upon the principles as on the interest of the assured, and it would seem to be always material that they should know how far this interest is engaged in guarding the property from loss.” Insurance Company vs. Laurence, 2 Peter, 48; see, also: 10 Cushing (Mass.), 446; 11 Gray (Mass.), 163; 42 Barb. 457; 11 Ohio S. 477; 5 Call (Va.), 517. As stated, though the minor child of Poméz owned seven-eighths of the property, the application of Poméz for the insurance is entirely silent as to that fact, as well as the policy itself. Under the authorities cited above, this circumstance alone would avoid the policy. It is argued by the plaintiffs’ counsel, with great ingenuity, that under the system of laws prevailing in this State, no such result would follow; that the insurance effected on the application of Poméz and in his iavor would enure to the benefit of his minor child, it being claimed that Poméz was the natural tutor of the child at the time the application was made and when the policy issued. It has been shown that by the express terms and conditions of the policy that the disclosure of the child’s title to the property was imper [664] atively required to Mud the company, that it was ail essential part of the contract, and such terms and conditions do not, in our opinion, contravene any article of our Code or any law of the State; and, therefore, full effect must be given them. This view of the question renders it unnecessary to consider the other issues presented by the pleadings and discussed by the counsel. It is, therefore, ordered, adjudged and decreed that the judgment of the lower court be affirmed, with costs.