Fisher v. Crescent Ins. Co.

• Citation: 33 F. 544
• Parties: FISHER v. CRESCENT INS. CO.
• Decision Date: 01 January 1887
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

33 F. 544

FISHER v. CRESCENT INS. CO.

United States Circuit Court, W.D. North Carolina.

November Term, 1887

H. C Jones and C. M. Jordan, for plaintiff.

Burwell & Walker and F. I. Osborne, for defendant.

DICK J., (charging jury.)

The counsel, in their arguments to the court, have discussed certain questions of law that cannot be properly decided and applied in settling the rights of the parties, until the questions of fact presented in the issues submitted to you are determined by your verdict. The counsel have agreed as to the response that you are to make to three of the issues, and you must decide the other issues in accordance with the weight of the evidence. In order that you may have a more intelligible view of the legal bearing of these questions of fact, I will state some general principles of law that relate to this controversy.

When parties deal with each other on equal footing, the law presumes that they understand their rights and best interests, and can take care of themselves. A vendor may commend his goods in extravagant terms, and incur no legal responsibility thereby, if he uses no unfair means on concealment and deceit, and the purchaser has an opportunity to examine for himself. Where one party possesses superior means of knowledge, and knows that the other party relies upon him for correct information, his representations must be correct. Thus the manufacturer has a better knowledge of the articles he manufactures than a purchaser, who knows what he wants, but is not familiar with the quality and fitness of the article, but relies upon the judgment of the maker. In such case the law implies a warranty from the representations made by the vendor as to the quality and fitness of the article for the purposes designed.

In cases of contracts for insurance the parties are not, in all respects, on equal footing, as the applicant for insurance has a better knowledge of the subject=matter of the contract than the insurer, who must rely upon the statements of the applicant. The highest good faith is therefore required of such applicant; and he must make truthful representations, as far as he possesses actual knowledge, or has convenient means and opportunity of acquiring correct information, and he must conceal nothing that is material to the risk or to the liability to be incurred by the insurer. Insurers can secure for themselves full protection against untrue or erroneous statements by requiring from the insured express warranties upon all material matters involved in the transaction. By an express warranty the insured stipulates for the absolute truth of his statements. Good faith and honest purpose will not excuse error. The statements must be entirely true, or the warranty is not fulfilled. The law affords protection and remedy to insurers only when representations and concealments are willfully false, deceitful, fraudulent, or grossly negligent. When the applicant makes a statement according to his best knowledge and belief, and has availed himself of all means of information conveniently and reasonably within his power, such statement, although untrue or inaccurate, will not avoid the policy of insurance, if it is fairly made, and honestly believed to be true. There must be some element of fraud, willful falsehood, or gross negligence in representations before they will vitiate or avoid a policy of insurance.

The testimony of the plaintiff is the principal evidence as to the condition, quantity, and value of the whisky in the bonded warehouse at the time of its destruction by fire. The credibility of this testimony was impeached by the cross-examination. The plaintiff, in reply to questions stated that he had been tried and convicted in a state court at Charlotte upon an indictment for obtaining goods under false pretenses, and was sentenced by the court to four years' imprisonment in the penitentiary at Raleigh; and that such sentence of imprisonment was remitted upon his making satisfaction for the goods obtained, and paying a fine. You have the right to consider this matter in passing upon the credibility of his testimony, and also the fact that he has testified in his own behalf; but still you may believe him, if, upon considering his conduct on the witness stand under cross-examination, and the reasonableness and probability of his testimony, you regard him as worthy of belief.

The first controverted issue requires you to determine whether the plaintiff made a true representation as to his last inventory of stock of whisky in the bonded warehouse on the eighteenth of November, 1884. An inventory is a written list of goods and chattels. It may or may not contain the estimated value of such property. In the case of executors and administrators, the law requires such officers to make a full, true, and accurate description and estimate of all the personal property in possession or in action, to which they are entitled, and for which they are responsible in their official capacity. It is the mode adopted by the law for charging them on their own oaths with goods and chattels which have, or with reasonable diligence should have, come into their hands for the benefit of the creditors and next of kin of the testator or...