Richards v. Washington Fire & Marine Ins.

Campbell, C. J. March 7, 1885, plaintiff procured insurance from defendant’s agent, Judge Clisbee, at Cassopolis, on a brick building in that place, consisting of two stores on the ground floor and a residence above, the latter being occupied by plaintiff and his family. One of the stores was occupied by Gr. Y. Bailey as a general store for dry goods, groceries, and other articles. The other was used as a restaurant and bakery, and had a large brick oven in the basement. On the twentieth of April, 1885, the premises were destroyed by fire, which originated in Bailey’s store, and for which plaintiff was in no way responsible. After the fire plaintiff made his proofs, and the only objection suggested on behalf of defendant against his right to the insurance money was the omission to state in his application for insurance the existence of the brick oven. Having sued upon the policy, a plea was put in, with notice under the general issue that the policy was issued on a written application, wherein he covenanted that his answers and the survey thereon were a just and true explanation of everything material to the risk, and that they formed part of the policy, and in case any untrue answer was given it was to be void ; that there were two material misrepresentations, — one as to the proximity of a wooden building represented as five feet distant, and the other as to the use of the building for stores and residence; and that by means of these statements he secured the policy, and led defendant to carry the risk, at inadequate rates. Upon the trial it appeared that the policy did not make any reference to the application, although it contained a clause that whenever a policy did refer to one it should be a part of the policy, and operate as a warranty. It contained the usual clauses concerning the effect of false statements and material omissions in any shape. It further appeared, without dispute, that the agent at Cassopolis was not only generally familiar with the premises, but examined them for himself, saw the oven and its surroundings, and knew the relative positions of the buildings. [424] He drew up and filled the application and plan in all its parts himself, without any help or suggestion, and plaintiff signed it. There was a conflict of testimony concerning the date of the application, — whether made before or after the issue of the policy. There was no question but that the agent acted in making out and delivering the policy on his own knowledge, and not in reliance on the application, concerning the character, position, and occupancy of the building. The policy was not issued at the home office, or at any general agency, but the Cassopolis agent himself decided upon it, and issued it upon his own authority. . He testified that he did not regard the oven as increasing the risk. The general State agent made no objection to payment except because of the oven. He did not, in his testimony, state that it increased the risk, but, in a general way, referred to the rates as less than he thought the company would have taken on the brick building, and that they would have added further to them had they known the, nearness of the wooden building. As under the decisions no reliance can be had on objections not specified, no reference need be had to any of the other claims of omission or false suggestion, although the court charged that if plaintiff deceived the agent, or colluded with him, or knowingly or purposely made any misrepresentations or withheld any material facts, and thereby obtained lower rates, he could not recover. The jury must have negatived any such conduct. The court held that if the application was made out after the policy, it could not bear upon the case; and this, we think, "was correct, as it only appears in the pleadings as made before the policy and forming a part of it. It was also held that, in the absence of fraud, plaintiff should l’ecover. This was also, correct, as the plea rested entirely on that defense. But, in connection with the other parts of the charge, the jury were given to understand that any known material misrepresentation or concealment would amount to such fraud, as defined 5 and they were sufficiently informed of their duty, provided the charge was right in regard to the other matters now to be referred to. [425] The whole controversy, although requests were presented in different forms, really turned on how far plaintiff could rely on the fact that Judge Clisbee drew up the application, as on all other points the fault was negatived by the jury. The two alleged errors in the description were the distance between an adjacent wooden building and the briclc building, and the represented use of the brick building. The only thing in the application bearing on proximity is a printed blank of diagram, divided into squares of ten feet each. Upon that diagram the size of each building is marked out, and colors are used to designate the material. In the printed record two of these diagrams are inserted — one in the application, and one in the agent’s report to the company. No questions are asked or answered in the application on the subject. In both diagrams the wooden building would appear to be about five feet from the brick; but in both of them two other wooden buildings are represented as nearly ten feet nearer than they actually are. In the agent’s report, made immediately after the policy issued, the questions are more searching than those on the application, and the answers are explicit, and it appears just how far off each wooden building was, and the building nearest is stated to be adjoining. The company itself could not mistake this information, assuming that it could have objected to a misstatement in the application. . The other objection is that the use of the building is stated to be for stores and residence, and that a restaurant and bakery is not a store. The question presented cannot be regarded as whether this language is technically accurate. It can only be material if so inaccurate as to mislead to the extent of probable prejudice and injury. The word “store” is commonly used in this country as the equivalent of the English word “shop,” which is very generally applied to what we call a “ bakery,” as it is to any room or building where any kind of article or traffic is sold. The American word “ store ” applies to the building, — the name more strictly belonging to the collection of wares within it. The English “ shop ” is the building [426] itself, as distinguished from a place of sale which is openy like a “ stallRich. Diet. “ shop.” A “ restaurant ” has no more defined meaning, and is used indiscriminately for all places where refreshments can be had, from the mere eating-house or cookshop to the more common shops or stores, where the chief business is vending articles of consumption and confectionery, and the furnishing of eatables to be consumed on the premises is subordinate. The testimony does not indicate that a restaurant or a bakery is more dangerous than any other grocery or provision store, and the fact that the impropriety of using the phrase “ store ” does not appear to have occurred to either the general or local agent, or to any one else, until this suit was brought, is reason enough against our attempting to declare, as matter of law, that the word is dangerously misleading, and a misrepresentation. Those gentlemen are both intelligent, and acquainted with the usages of correct language; and if dictionary makers fail to approve certain uses, it does not follow that the people who resort to them are wrong, or that they do not know what they mean by their own terms. Neither have we any right to say, as a matter of law, that a brick oven is so unusual that a failure to mention its existence in a house or other building is presumptively fraudulent. It is not many years since such ovens were found in all comfortable dwellings, as well as in bake-shops and other places where cooking is done, and their presence was taken for granted, and not deemed hazardous. These matters, therefore, cannot be dealt with theoretically. The burden was upon defendant to show that plaintiff had made material concealments or misrepresentations. It is therefore of the first importance to know how far he can rely on the action of Judge Clisbee, the agent who insured him. This case stands before us entirely free from any of the complications arising from the duty of members of mutual insurance companies to know their rules and by-laws and the conditions of membership. Neither is it affected by those rules which have sometimes been applied to applications which are to be transmitted elsewhere to procure insurance [427] from a home office. Where a local agent has authority to issue policies himself, the applicant for insurance, in the absence of fraud, may generally deal with him as he would with the officers of the insurance company, and rely on his conduct as he could on theirs. He was not bound, in the-present case, to tell the agent what the agent assumed to know, and did know; or to assume that it was his duty to consider as material, and to express in words, what the agent knew, and did not treat as material or necessary to be written down. When the undisputed facts show, as they did here, that there is not a single fact relied on that was not fully known to Judge Clisbee, and that he, with knowledge of them all, prepared such an application as he regarded as proper and complete, and then acted upon his own knowledge in taking the risk, there is nothing left of the case, and all the other questions become immaterial, unless he and plaintiff were in collusion to commit a fraud, which was not charged by the company, and which is negatived by the verdict. Our own decisions cited on the argument need not be repeated on this head. The views we have expressed render it needless to go over, one by one, the assignments' of error, which are all covered by them. We think the jury could have been allowed to reach no other conclusion, and the judgment must be affirmed. The other Justices concurred.