Devenny v. Automobile Owners' Interinsurance Ass'n of Washington

• Citation: 214 P. 833,124 Wash. 453
• Decision Date: 30 April 1923
• Docket Number: 17725.
• Court: United States State Supreme Court of Washington
• Parties: DEVENNY v. AUTOMOBILE OWNERS' INTERINSURANCE ASS'N OF WASHINGTON et al.

214 P. 833

124 Wash. 453

DEVENNY v. AUTOMOBILE OWNERS' INTERINSURANCE ASS'N OF WASHINGTON et al.

No. 17725.

Supreme Court of Washington

April 30, 1923

Department 2.

Appeal from Superior Court, King County; A. W. Frater, Judge.

Action by J. S. Devenny against the Automobile Owners' Interinsurance Association of Washington and others. Judgment for plaintiff, and the named defendant appeals. Affirmed.

Reynolds Ballinger & Hutson, of Seattle, for appellant.

Crawford E. White, John P. Gallagher, and Charles C. Curtis, all of Seattle, for respondent.

FULLERTON J.

This is an action to collect upon an automobile fire insurance policy. The case was tried to the court below sitting without a jury, and from a judgment for the plaintiff in the sum of $650, the insurance association has appealed.

The facts of the case are as follows: On January 29, 1921, the appellant issued to the respondent a policy of insurance indemnifying the respondent against loss of or damage to a certain secondhand Reo truck by fire, in an amount not to exceed $1,500. The premium of $27 was paid by the respondent. On April 19, 1921, the truck, while being driven on the road near Shelton, was burned and became a total loss. Proof of loss was made, but the appellant refused payment upon the grounds that the respondent had secured the insurance by false and fraudulent warranties in his application for insurance, and upon the further ground that the truck was deliberately burned by the respondent or by his procurement. Certain members of the appellant association were made parties defendant, but the case as against them was nonsuited in the court below and they are not parties to the appeal.

The application for insurance upon which the policy was issued contained the following statements:

'The following statements of fact are known to, and warranted by, the subscribers to be true and this policy is based by the association relying upon the truth thereof: * * *

'2. The following is the description of the automobile and facts relative to purchase:

'Model: 1917. Trade-name: Reo. Type of body (if truck state tonnage); 2-ton. Model: J. Factory and Engine No J5139. List Price: $1,800. $200 body.

'3. The facts with respect to the purchase of the automobile described are as follows:

'Purchased by the assured: Month: Dec. Year: 1920. New or secondhand: Secondhand. Actual cost to assured, including the equipment: $2,000.00.'

The appellant alleged in its answer that the actual year model of the car was 1915 instead of 1917, and that the actual cost of the car to the assured was not to exceed $600 instead of $2,000, and that these false warranties voided the contract. Such representations in an application for insurance to avoid the policy must not only be false, but must have been made with intent to deceive under the express provisions of section 7078, Rem. Comp. Stat., which, so far as material, reads:

'No oral or written misrepresentation or warranty made in the negotiation of a contract or policy of insurance, by the assured or in his behalf, shall be deemed material or defeat or avoid the policy or prevent it attaching, unless such misrepresentation or warranty is made with the intent to deceive.'

This section was originally enacted as section 34, c. 49, Laws of 1911, and hence was not in the laws of the state at the time the contract of insurance considered by this court in Miller v. Commercial Union Assurance Co., 69 Wash. 529, 125 P. 782, was entered into.

Considering the effect of this statute in Brigham v. Mutual Life Ins. Co., 95 Wash. 196, 163 P. 380, we said:

'It is not enough under this statute of find that the representations were false. It must further be found that they were made with intent to deceive.'

In Day v. St. Paul Fire & Marine Ins. Co., 111 Wash. 49, 189 P. 95, the court had before it a situation almost identical to the one in this case. That action involved a fire insurance policy issued upon an automobile, and the misrepresentations in the application relied upon to void the policy were that the owner had declared the car to be a 1911 model, whereas it was a 1910 model; and had stated it was new and cost $3,400, whereas it was a secondhand car and cost $2,000. In that case the court held that inasmuch as the representations were false and were known to be false when made, in the absence of proof to the contrary, intent to deceive would be presumed. In that case we said:

'It is true that motive and intent are mental states, and that evidence of the mental state of an applicant is sometimes hard to prove where there are no facts or circumstances to establish it other than the applicant's own declaration. However, honesty and fair dealing would seem to require that, in order to overcome the presumption, there must be some testimony more concrete than was here given when an applicant admits, as he does here, that the representations were made with the knowledge that they were untrue. It may be that representations made at a time when the applicant may have forgotten the facts, or made through carelessness or mistake, or where the representative of the insurance company had prior knowledge of the facts which were contrary to the representations made by the applicant, make submissible to the jury the question of whether the applicant acted with intent to deceive or not. In this case the respondent admits that the statements were 'material enough to avoid the policy if there was an intent to deceive,' and they having been made with knowledge of their falsity, a presumption arises of the intent to deceive, which presumption is not overcome by the unsupported

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