Home Ins. Co. v. Connally

• Decision Date: 03 February 1900
• Citation: 56 S.W. 828,104 Tenn. 93
• Parties: HOME INS. CO. v. CONNALLY.
• Court: Tennessee Supreme Court

56 S.W. 828

104 Tenn. 93

HOME INS. CO. v. CONNALLY.

Supreme Court of Tennessee.

February 3, 1900

Appeal from chancery court, Davidson county; H. H. Cook, Chancellor.

Bill by the Home Insurance Company against M. J. Connally for cancellation of a policy of insurance. From a decree of the court of chancery appeals for complainant, defendant appeals. Affirmed.

W. D Covington, for appellant.

Stokes & Stokes, for appellee.

BEARD J.

This suit grows out of the issuance by the complainant to the defendant of a policy of insurance which undertook, for a round sum or entire premium, to indemnify the defendant against loss by fire-- First, of her dwelling house, valued at $500; and, second, of its contents, consisting of household and kitchen furniture, valued at $400. While the policy was in force a fire occurred, destroying the building and all it contained. In due time the assured made out her proofs of loss, and, having made affidavit to their correctness, submitted them to the complainant, and demanded payment, which was refused upon the ground that the defendant was seeking to perpetrate a fraud upon the insurer, by claiming for a much larger amount of personal property than was destroyed. Meeting with this refusal, the assured instituted a common-law action to recover on the policy the value of the loss which she alleged had been sustained by her. Thereupon the complainant filed this bill, charging fraud on the part of the assured, and asking that the chancery court call in and cancel the policy. The defendant answered the bill, denying all fraud, and with her answer filed a cross bill setting up her policy, averring the total loss of real and personal property to the face value of the policy, that proper proofs of loss had been made, and praying a decree against the company. After answer to this cross bill, the cause was tried by the chancellor on an agreed statement of facts, which contained, along with other stipulations, which need not be mentioned, the following "That the statements in the proofs of loss, and other papers made under oath by defendant with respect to the personal property insured, were fraudulently and falsely made, with the actual intent to deceive complainant." The policy upon which, in the face of her admission of a purpose to defraud the insurer, the cross complainant seeks to recover in a court of conscience, contains the following unambiguous clause: "This entire policy shall be void if the insured has concealed or misrepresented in writing or otherwise any material fact or circumstance concerning the insurance or the subject thereof, whether before or after the loss." The cross complainant, through counsel, concedes that under this condition her effort at fraud, accompanied by false swearing with regard to the personal property precludes a recovery for its loss, but insists that, as she dealt honestly with the company so far as the building was concerned, she is entitled to a decree for its value. This contention is made upon the theory that the policy in question is a severable or divisible contract, and covering, as it does two items of property with distinct valuations, it is to be treated as if two separate policies had been issued,--one insuring the building, and the other its contents, each containing the clause or condition set out above. From this it is argued that fraud, such as is here admitted, as to one of these policies, would not prevent a recovery for an honest loss on the other. While the earlier cases were possibly harmonious in holding that a policy covering a number of pieces of property for one entire premium was indivisible, yet it may be granted that the tendency of the more recent authorities is to treat such a contract separable or divisible so far as the separate subjects insured are concerned. This view has been accepted as one more consistent with the intention of the parties, or less likely to produce inequitable results to the insured, by affording the courts an opportunity to avoid forfeitures for innocent mistakes often made by the assured. The case of Speagle v. Insurance Co., 97 Ky. 646, 31 S.W. 282, serves as an illustration of a class to which this principle of construction has been applied. There several houses were insured in the same policy for a common premium, but with separate valuations. The policy contained the usual clause, avoiding the insurance should the...