Boyd v. Vanderbilt Ins. Co.

• Decision Date: 05 May 1891
• Citation: 16 S.W. 470
• Parties: BOYD v. VANDERBILT INS. CO.
• Court: Tennessee Supreme Court

16 S.W. 470

BOYD v. VANDERBILT INS. CO.

Supreme Court of Tennessee.

May 5, 1891.

Appeal from circuit court, Shelby county; L. H. ESTES, Judge.

Malone & Malone, for appellant. M. B. Trezevant, for appellee.

LURTON, J.

Action at law upon a policy of fire insurance. The property insured is described on the face of the policy as a "one-story frame, shingle-roof dwelling-house, occupied by good tenants, as such." This policy was issued March 9, 1888, and was for two years. On the 31st of January, 1889, the property was consumed by fire. The insurance company, among other pleas, pleaded that the premises were not occupied, either at time of issuance of policy or at time of loss. There was a judgment for the insurer. Errors are assigned upon the charge of the court to the jury. Among other things, the court charged as follows: "The statement in the policy in this case, `on the one-story frame, shingle-roof dwelling-house, occupied by good tenants, as such,' is a representation by the plaintiff to the defendant that, at the time the policy was issued, the building was really occupied, and the condition upon which the contract of insurance was based, and to entitle the plaintiff to recover it must have been true. Therefore, if you find the building was vacant, and that the defendant was ignorant of that fact, this avoids the policy, and your verdict should be for defendant. This is the law, even though the statement be made in ignorance and without any desire to misrepresent any of the facts." This was a succinct statement of the law, expressed in positive and unambiguous terms. The distinction between a representation and a warranty in a policy of fire insurance is an important one, and has led to much conflict of judicial opinion. The definition by Mr. Arnold in his work on Insurance, of a "warranty" is that a "warranty is a stipulation inserted in writing on the face of a policy, on the literal truth or fulfillment of which the validity of the entire contract depends." *577. This definition, says Mr. May in his valuable work on Insurance, has met with general acceptance. The latter author, speaking of a warranty, says: "By a warranty, the insured stipulates for the absolute truth of the statement made, and the strict compliance with some promised line of conduct, upon penalty or forfeiture of his right to recover in case of loss, should the statement prove untrue, or the course of conduct be unfulfilled." Again he says: "A warranty is an agreement in the nature of a condition precedent, and, like that, it must be strictly complied with." Section 156. A warranty enters into and is a part of the contract, and the materiality is not open to discussion. No liability can arise, except within the terms of the contract, of which the warranty is a part. On the other hand, a mere representation is in its nature no part of the contract, being a statement incidental or collateral to the contract. Hence, if a representation be concerning a matter immaterial to the risk, it does not affect the contract. May, Ins. §§ 183, 184. If, however the representation be of a fact material to the risk, and be relied upon by the insurer, it is the undoubted general rule that such representation, whether made intentionally or through mistake and in good faith, avoids the policy. "It is the fact that the insurer relies upon the truth of the representation, and not upon the intention, which misleads, whether fraudulent or otherwise, that gives the right to complain." Id. § 181. In view of the consequences resulting from the breach of a warranty, however immaterial, the courts will not favor a construction which will convert that which was incidental or collateral into a warranty. The intent that the statement or description shall be a part of the contract must arise upon a fair interpretation and clear intent of the words used. Whether the statement constitutes a warranty or a representation is a question of law, and is for the court. The rule that any statement or description on the face of the policy which relates to the risk is a warranty has been largely accepted....