Boggs v. America Ins. Co.

• Citation: 30 Mo. 63
• Parties: BOGGS & LEATHE, Respondents, v. AMERICA INSURANCE COMPANY, Appellant.
• Decision Date: 31 March 1860
• Court: United States State Supreme Court of Missouri

30 Mo. 63

BOGGS & LEATHE, Respondents,

v.AMERICA INSURANCE COMPANY, Appellant.

Supreme Court of Missouri.

March Term, 1860.

1. A concealment of facts by an applicant for insurance of a building against fire is not material unless a disclosure of the facts concealed would have induced the insurer to decline the risk or enhance the premium.

2. In contracts of fire insurance, it is sufficient if the applicant for insurance make true and full answers to the questions put to him by the insurer in respect to the subject of insurance; he is not answerable for an omission to mention the existence of other facts about which no inquiry is made, unless he knows such facts to be material and intentionally fails to communicate them.

3. Statements made to insurers in respect to the subject of insurance can not be invoked against the insurers to overthrow the defence of a fraudulent concealment of material facts unless such statements were made in connection with the application for insurance.

Appeal from St. Louis Circuit Court.

This was an action on a policy of insurance against fire. The policy was issued upon a written application of plaintiffs and the personal application of and verbal statements of plaintiffs or one of them. The defence relied on is that there was a concealment of facts material to the risk. The concealment charged consisted in this, that the plaintiffs failed to state that portions of the building, a store, in which the insured goods were, were occupied as a dwelling-house by one of the plaintiffs and another.

At the instance of the plaintiffs the court gave the following instructions: “1. If the jury find that there was a concealment of any material fact on the part of plaintiffs while engaged in effecting the insurance in question, then the policy is void and plaintiffs can not recover; and a material fact is one which if known would have induced the insurance company to decline the risk entirely or to have charged a higher premium. 2. If you find that the families of Spore and Boggs resided in a part of the building containing the goods insured, and that fact was not known to the secretary of the defendant when the policy was issued, and which, if known, would have induced the defendant to have declined the risk or to have charged a higher rate of premium thereon, and that the plaintiffs, when making their application, concealed the facts from the proper officers of the defendant, then plaintiffs can not recover in this suit. 3. If the jury find that an interview was had between either of the plaintiffs and the secretary of the America Insurance Company touching the insurance in question at any time before the policy was issued, and in that interview said secretary was informed that some of the upper stories of the building containing the stock of goods insured were occupied as family residences for the families of Spore and Boggs, and that there was no material change in regard to such residences from the time of such interview to the issuing of the policy, then there was no such concealment as to the matter of such residences as will avoid the policy sued upon. 4. If you find that there were no specific inquiries of plaintiffs or either of them concerning the occupation of the upper stories of said building, then there was no such concealment as avoids the policy, unless you believe that plaintiffs knew that the families residing in said buildings were material facts and intentionally failed to communicate the same at the time of effecting the insurance. 5. Though the jury should believe from the evidence that the fire, which caused the loss sued for, resulted from negligence or carelessness of a servant of plaintiffs, that is no defence to this action.”

The following instruction asked by defendant was given: “6. If the plaintiffs, or one of them, at the time the application for insurance to the defendant was made, was interrogated or inquired of by the secretary of the defendant as to the manner the building was occupied or used in which the property insured was situated; if in answer to such inquiries the plaintiffs neglected or failed to state that the said building was then occupied and used in part by their own families and the family of the witness Spore, as given in evidence; if the jury find from the evidence that the manner in which said building was occupied was a material fact for the defendant to know in respect to taking the risk under the policy in question; then the plaintiffs can not recover in this action, and the jury should find for the defendant, unless the jury at the same time find from the evidence that the defendant knew said building was occupied when the policy in question was issued.”

Other instructions asked by defendant were refused.

Krum & Harding, for appellant.

I. There was error in the first and second instructions given on behalf of plaintiffs, in this, that both assert and assume the principle that there could have been no material concealment unless the fact concealed was such that, if known to the defendant, the risk would have been declined or a higher rate of premium charged. It is sufficient if a misrepresentation tend to influence the insurer's estimate of the character and degree of the risk; or if there be a concealment of a fact which, if communicated, would tend to prevent the insurer from entering into the contract or to demand a higher premium. (1 Phill. on Ins. § 524, 531.) The instructions directed the minds of the jury, not to the question whether the facts alleged to have been concealed enhanced the risk, but to the inquiry whether defendant might not have entered into the contract with as well as without knowledge of these facts. Under these instructions the jury might very well come to the conclusion that the risk upon goods in a house occupied as these premises were would be greater than upon goods in a store-house not used for the residence of families, and that plaintiffs failed to communicate the facts respecting the nature of the occupation of the premises; while at the same time they might also find that the concealment was not material, because defendant might have taken the risk on the same terms even if the enhancement of the risk had been known to them. The use of the words “concealment” and “concealed” in said instructions being unexplained, was calculated to mislead the jury. They would naturally infer that there must have been an intentional or dishonest suppression of facts in order to constitute a concealment. (1 Phill. on Ins. § 537, 546.)

II. The court erred in giving the third instruction. The conversation with Boggs was before any application was made for insurance.

III. The fourth instruction given was not law. The rule is that any circumstance evidently and materially enhancing the risk of fire, known to the appellant at the time of insuring, and not known or presumed to be known to the insurer, and of which he is not bound to inform himself or take the risk of it, must be disclosed, though no inquiry is made respecting it. (1 Phill. on Ins. § 635.) No one would have reason to suppose that families resided in the building. Such use of a building of that description was so unusual that no inquiry was necessary in order to make it plaintiffs' duty to disclose the fact. (1 Phill. on Ins. § 635.) That the risk was materially enhanced by the keeping of numerous fires in the upper stories is too clear for argument. The instruction requires the questions to be specific.

IV. The court erred in refusing the third and fourth instructions asked by defendant.

Drake, for respondents.

I. The law governing misrepresentations and concealment in obtaining a policy of fire insurance was correctly laid down by the court. The premises were accessible and open to the underwriter's examination. They were only a few blocks from the insurance company's office. The company can not avoid payment of the loss on the ground that the insured did not disclose a material fact unless the insured knew the fact to be material and concealed it. (5 N. Y. 469.)...