Fink v. La. Crosse Mut. Fire Ins. Co.

• Decision Date: 13 January 1931
• Citation: 203 Wis. 350,234 N.W. 339
• Parties: FINK ET AL. v. LA CROSSE MUT. FIRE INS. CO. FINK ET AL. v. SHEBOYGAN FALLS MUT. FIRE INS. CO.
• Court: Wisconsin Supreme Court

203 Wis. 350

234 N.W. 339

FINK ET AL.

v.LA CROSSE MUT. FIRE INS. CO.

FINK ET AL.

v.SHEBOYGAN FALLS MUT. FIRE INS. CO.

Supreme Court of Wisconsin.

Jan. 13, 1931.

Appeals from two judgments of the Circuit Court for Pierce County; George Thompson, Circuit Judge.

Separate actions by Frank Fink against the La Crosse Mutual Fire Insurance Company, and against the Sheboygan Falls Mutual Fire Insurance Company, wherein the Citizens' State Bank of Ellsworth was later made party plaintiff. Judgments for plaintiffs, and defendant in each case appeals.--[By Editorial Staff.]

Reversed and remanded, with directions.

These are companion cases growing out of the same fire loss. Each action was originally brought by Frank Fink to recover under a policy of fire insurance for a fire which occurred February 23, 1928, at the garage of Fink on his farm in the town of Ellsworth. The complaint in each case alleged that the property consisting of farm implements, automobiles, and tractors in storage was totally destroyed by the fire, and that the property was of the value of $6,404.70. The amount of each policy was $2,000, and judgment for the full amount of each policy was asked. The original answer set up as a defense that the property was covered by chattel mortgages. The cases came on for trial October 28, 1928, and were continued. On that day plaintiff proposed that defendants make an offer of settlement. Counsel for defendants insisted that an adverse examination be taken in order to furnish an intelligent basis for the settlement. By agreement plaintiff was examined on that day, and thereafter a proposition of settlement was made, but not accepted by plaintiff. After some further investigation into the facts, defendants asked and obtained leave to amend the answer so as to set up fraud after loss and false swearing as to loss and in the adverse examination. After the adverse examination plaintiff made an assignment of his claims under the policies to the Citizens' State Bank of Ellsworth, and the bank, on its application, was made a party plaintiff. The cases were tried before the court without a jury, and the court found that property of the value of $950 was totally destroyed by fire and not covered by a chattel mortgage. The court further found: “That the plaintiff Frank Fink did not with any purpose or intention to deceive or defraud either of the defendant insurance companies, knowingly or falsely misrepresent the amount of the loss or other facts as to the items of articles which were in said fire; that he did not with the purpose or intention to deceive or defraud either of said insurance companies knowingly or falsely swear to any proofs of loss; and that he did not, as claimed by the defendants or otherwise, knowingly or falsely swear in his testimony before the court commissioner with any purpose or intention to defraud either of said insurance companies.”

In the decision which accompanied the findings, the court stated that he was not satisfied as to the accuracy of the description of some of the articles listed in the proofs of loss; that much of the property was not new as listed, but was old, and some of it had been used to a considerable extent. The court further stated that he was satisfied that the value of said property was considerably less than listed by plaintiff in the proofs of loss. The court goes on to say: “While I am satisfied that the proofs of loss and the testimony of plaintiff Frank Fink are not a true and correct representation of the description, condition and value of the property destroyed in the fire, such proofs of loss and such testimony containing many inaccuracies, inconsistencies and misrepresentations, my greatest difficulty has been to determine the intent and purpose with which the plaintiff Frank Fink was actuated in his testimony and in the part he took in the preparation and submission of his proofs of loss.”

The court stated that he had finally come to the conclusion that the plaintiff was ignorant, impulsive, indifferent, careless, reckless, and stubborn, but that it would not be proper to find him guilty of any intention or purpose to defraud or deceive the insurance companies.

Richmond, Jackman, Wilkie & Toebaas, of Madison, and Casey & Magee, of Ellsworth, for appellants.

W. G. Haddow, of Ellsworth, for respondents.

WICKHEM, J.

The policies in question contained the following provision, which is required under the Standard Fire Insurance Policy Law of Wisconsin (St. 1929, § 203.01): “This entire policy shall be void if the insured has concealed or misrepresented any material fact or circumstance concerning this insurance or the subject thereof; or in case of any fraud or false swearing by the insured touching any matter relating to this insurance or the subject thereof, whether before or after a loss.”

[1] This court has held, in F. Dohmen Co. v. Niagara Fire Ins. Co., 96 Wis. 38, 71 N. W. 69, 74: “Any trick, artifice, or deception practiced with the object of securing some advantage in the adjustment or payment of a loss under a policy of insurance to the prejudice of the insurer, and liable to have that effect, avoids the policy.” This follows “regardless of the fact whether damages actually resulted to the insurance company.” Bannon v. Insurance Co. of North America, 115 Wis. 250, 91 N. W. 666. It is also held that the clause above quoted is highly penal; that it is not merely aimed at protecting the insurer against fraud, but imposes upon the insured, as a penalty, forfeiture of the whole insurance, although the fraud might affect some trifling portion of it. Consequently, more has been required to constitute such fraud or false swearing as will avoid the policy than will justify an action for rescission of damages for fraud. “It is held by an unbroken line of decisions in this court that this penalty is not to fall unless the false swearing is knowingly and willfully done. It is not enough that it occurs through mistake, carelessness, or inadvertence, or even in unreasonable reliance on information derived from others.” Beyer v. St. Paul F. & M. Ins. Co., 112 Wis. 138, 88 N. W. 57, 58. See, also, Meyer v. Home Ins. Co., 127 Wis. 293, 106 N. W. 1087;Wiesman v. American Ins. Co., 184 Wis. 523, 199 N. W. 55, 200 N. W. 304;Oberleitner v. Security Insurance Co., 199 Wis. 220, 225 N. W. 735.

[2] The question in this case is whether the insured has been guilty of knowingly and willfully misrepresenting facts or false swearing in any manner touching the insurance, with intent to mislead the insurer. The evidence is quite voluminous and difficult to present within any reasonable limits. A brief review of some of the facts with respect to the insured's conduct may be sufficient to make our conclusions understandable.

In the proofs of loss there were included two tractors--one model H. La Crosse tractor, value at time of fire, $875, and one model F. La Crosse tractor, value $575. On the adverse examination Fink testified that these were brand-new tractors, bought from the La Crosse Tractor Company in the fall of 1927; that the numbers of these tractors were correctly shown on a typewritten list which Fink produced on this examination, and which constituted a list of articles that plaintiff claimed were in the fire, but were not mortgaged. In this list the number of the model H. tractor appeared in ink as No. 19433, and the other tractor was described as model A. La Crosse tractor No. 14847, of the value of $575. This typewritten list contained no model F. tractor at all....