Detroit Fire & Marine Ins. Co. v. Sargent

• Decision Date: 02 April 1926
• Parties: THE DETROIT FIRE AND MARINE INSURANCE COMPANY, a Corporation, Appellant, v. C. H. SARGENT, Respondent
• Court: Idaho Supreme Court

246 P. 311

42 Idaho 369

THE DETROIT FIRE AND MARINE INSURANCE COMPANY, a Corporation, Appellant, v. C. H. SARGENT, Respondent

Supreme Court of Idaho

April 2, 1926

FRAUD - REPRESENTATIONS OF INSURED - DUTY OF INSURER TO ASCERTAIN FACTS-INSTRUCTIONS-APPEAL AND ERROR-CONFLICTING INSTRUCTIONS.

1. Ordinary prudence and diligence do not require person to test truth of representations made to him by another as of his own knowledge and with intention that they shall be acted on, if facts are peculiarly within other party's knowledge, though not exclusively so, and though party to whom representations are made may have opportunity of ascertaining truth.

2. Where number and grade of apples destroyed by fire was peculiarly within knowledge of insured, and loss was adjusted and paid in reliance on his representations, it was not necessary that diligent inquiry be made, as insurer could rely on such representations and was not bound to make independent investigation.

3. In action to recover money paid in settlement of loss under fire insurance policy, instruction that lack of knowledge by insurer of facts which if known might have defeated claim was of no avail if such facts might have been learned on diligent inquiry, held in conflict with subsequent instruction that insurer had right to rely on statements of insured.

4. Where instructions are in irreconcilable conflict on a decisive or controlling question to be determined by jury and where no one can tell which instruction jury followed reversal of judgment must necessarily follow.

APPEAL from the District Court of the Seventh Judicial District, for Payette County. Hon. B. S. Varian, Judge.

Action founded upon fraudulent representations for money paid on fire insurance policies pursuant to adjustment of a loss by fire. Judgment for defendant. Reversed and remanded.

Reversed and remanded. Costs awarded to appellant.

George Donart, for Appellant.

Where an insurer under the terms of a standard fire insurance policy is induced to pay a loss by reason of false and fraudulent statements contained in the sworn proofs of loss the insurer is entitled in an action for fraud and deceit to recover the money so paid without showing that it made diligent inquiry to ascertain the truth or falsity of the fraudulent statements or without showing that it was fraudulently prevented from learning the facts by the insured. (May on Insurance, par. 445; German Fire Ins Co. v. Gibbs, Wilson & Co., 42 Tex. Civ. App. 407, 92 S.W. 1068, 96 S.W. 760; Ostrander on Insurance, par. 213.)

A defrauded party has a right to rely upon the truthfulness of the statements inducing him to pursue a course of action and does not have to show that he used diligence to prevent being defrauded. (Watson v. Molden, 10 Idaho 570, 79 P. 503.)

Where instructions given by the court to the jury are inconsistent and contradictory the judgment will be reversed. (Holt v. Spokane & Palouse Ry. Co., 3 Idaho 703, 35 P. 39; Portneuf-Marsh, etc., v. Portneuf Irr Co., 19 Idaho 483, 114 P. 19; Haight v. Vallet, 89 Cal. 245, 23 Am. St. 465, 26 P. 897.)

Norris & Sutton and Wood & Driscoll, for Respondent.

The eighth instruction given by the court correctly stated the law in its application to defenses placed in issue by defendant, and not questioned by plaintiff either as to the pleadings or upon the trial, both in its application to the facts in the case and as an abstract proposition of law. (26 C. J., sec. 532; German Fire Ins. Co. v. Gibbs, Wilson & Co., 42 Tex. Civ. App. 407, 92 S.W. 1068, 96 S.W. 760.)

"Where the allegations of the complaint are supported by the proofs and the verdict and judgment are in accordance with both, it cannot be the duty of this court to grant a new trial because an instruction was given which, although correct as an abstract principle of law, was not applicable to the case, and when it is apparent that the jury paid no attention to the instruction and where if they had, it could have made no difference in the result." (Stinson v. Rourke, 4 Idaho 765, 46 P. 445.)

Erroneous instructions are not ground for new trial, if it is manifest that the movant was in no way prejudiced thereby or if the court can see from the whole record that even under correct instructions a different verdict could not have been rightfully rendered. (20 R. C. L., p. 269; Caravelis v. Cacavas, 38 Idaho 123, 220 P. 110.)

Where inconsistent instructions are given "it is to be presumed that those used last were used by the jury as controlling." (State v. Yance, 74 Conn. 177, 92 Am. St. 205, 50 A. 37, 54 L. R. A. 782.)

Admitting error in giving instruction No. 8, State v. Bond, 12 Idaho 424, 86 P. 43, is directly in point to the effect that it was not prejudicial error. To the same effect, Tarr v. Oregon Short Line R. R. Co., 14 Idaho 192, 93 P. 957.

GIVENS, J. William A. Lee, C. J., and Wm. E. Lee, Budge and Taylor, JJ., concur.

OPINION

GIVENS, J.

--Respondent Sargent, held two separate insurance policies for $ 10,000 and $ 30,000, respectively, covering fruit, packing-house supplies and packing-house equipment contained in his packing-house and warehouse. The warehouse burned and the equipment, buildings and apples stored therein were damaged and thereafter the insurance adjuster fixed the amount of the loss on the representation of respondent that at the time of the fire there were 19,010 boxes of first grade apples in the warehouse. An adjustment of the amount of the loss was made and subsequently paid by appellant, Detroit Fire and Marine Insurance Co. This action was instituted by appellant which alleged that the representations made by respondent as to the quantity and quality of the apples contained in the warehouse at the time of the fire were false, for the reason that...