Kausal v. Minnesota Farmers' Mutual Fire Insurance Association
| Decision Date | 11 July 1883 |
| Citation | 16 N.W. 430,31 Minn. 17 |
| Parties | Julia Kausal and another v. Minnesota Farmers' Mutual Fire Insurance Association |
| Court | Minnesota Supreme Court |
The plaintiffs brought this action in the district court for Hennepin county, to recover upon a policy of insurance against fire, issued to them jointly by the defendant, upon a certain house and furniture in which they allege that they had an insurable interest, and which were subsequently destroyed by fire. The answer of the defendant admits the issuance of a joint policy to the plaintiffs, alleges that the same was issued in reliance upon plaintiffs' application for membership in defendant and for the insurance mentioned, and upon the statements and answers contained in such application, which the plaintiffs agreed should be warranties on their part; that "in and by said policy it is provided that any misrepresentation by the assured of the value, condition, situation, title or occupancy of the property, or any omission to make known every fact material to the risk, or any misrepresentation whatever, or fraud, or attempt at fraud, whether in written application or otherwise, or fraud, or false swearing in proofs of loss shall cause a forfeiture of all claims under the policy," and "that if the interest of the assured whether as owner, or trustee, factor, agent, or mortgagee lessee or otherwise, be not truly stated, then the policy shall be null and void." The answer further alleges that in their application the plaintiffs stated that they were the owners of the property described in the application, and that such statement was false; that in such application the plaintiffs stated that there was no incumbrance upon any of the property described, and that such statement was false specifying certain incumbrances; that in such application the plaintiffs stated that the dwelling-house described was completed and painted, and that it was used and occupied as a dwelling-house solely, and that such statements were false. The answer also contains allegations of false swearing in the proofs of loss, of negligence of plaintiffs causing the fire, and of the amount recoverable under the policy, and denies the alleged value of the property destroyed.
The reply alleges that the plaintiffs "are foreigners, and ignorant of the English language, and did not know what was contained in the application for insurance mentioned in said answer; that the same was made out by an agent of the defendant, and plaintiffs signed the same by his direction, without knowing the contents of the same; that the said Julia Kausal was, at the time of such insurance, the owner of an undivided three-quarters of the land upon which said dwelling-house stood, and in possession of all said land, and the said plaintiff William Kausal was the owner of all of said dwelling-house; that all of such ownership was told to said agent of the defendant at the time of such insurance, and the defendant had at such time due notice of the same." The reply admits "that said house was not painted," but alleges that "the same was completed," and "that, at the time the said application was made, an agent of defendant, duly authorized to solicit insurance and to take and receive applications therefor on the part of the defendant, was present at the said house so insured, and examined the same, and fully knew all the circumstances of its condition, and solicited said insurance, and wrote out said application as aforesaid, and told the plaintiffs the same was correct, and induced them to sign the same." The reply denies all other allegations than those above admitted.
On the trial, before Young, J., and a jury, the defendant objected to the reception of any evidence on the part of the plaintiffs, on the ground that it is incompetent, irrelevant and immaterial under the pleadings, which objection was sustained. The plaintiffs then offered to prove all the allegations of the reply, which offer was rejected, upon defendant's objection, and, on defendant's motion, the action was dismissed. Plaintiffs appeal from an order refusing a new trial.
Order reversed.
Wilson & Lawrence, for appellants.
Levi, Cray & Hart and J. F. Keene, for respondent.
The reply is bad, the title therein admitted not being that warranted in the application. Reynolds v. State Mut. Ins. Co., 2 Grant's Cas. (Pa.) 326; Kibbe v. Hamilton Mut. Ins. Co., 11 Gray, 163. Under the joint application and policy it is necessary to show joint ownership of the property. Under the policy both must recover, or neither; Fowler v. Frisbie, 37 Cal. 34; Lawrence v. Montgomery, 37 Cal. 183; and parol evidence cannot be admitted to control or vary the terms of a written contract. Barrett v. Union M. F. Ins. Co., 7 Cush. 175; Chase v. Hamilton Ins. Co., 20 N.Y. 52; Cheriot v. Barker, 2 John. 346.
The contract was an entirety, and not severable. If avoided in part, it fails in toto. Plath v. Minn., etc., Ins. Assn., 23 Minn. 479; Brown v. People's Mut. Ins. Co., 11 Cush. 280; Lee v. Howard Fire Ins. Co., 3 Gray, 583; Richardson v. Maine Ins. Co., 46 Me. 394.
The application, by whomsoever made, being the act of the assured; the company having no means of knowing the condition of the property described in it, save by its contents; and it being a mutual company, into which the applicants were seeking to introduce themselves, it became the duty of the applicants to see to it, at their risk, that its contents were true; and the facts, if true, pleaded in attempted avoidance of the force of the admittedly false warranties contained in their application, as to the agent's information and knowledge of the true state of facts, inconsistent therewith, and not averred to have been brought home to the company, were entirely immaterial and insufficient to charge respondent. Richardson v. Maine Ins. Co., 46 Maine, 394; Susquehanna Ins. Co. v. Perrine, 7 Watts & Serg. 348; Smith v. Insurance Co., 24 Pa. St. 320; Jennings v. Chenango Co. M. Ins. Co., 2 Denio, 75; Chase v. Hamilton Ins. Co., 20 N.Y. 52; Alexander v. Germania Fire Ins. Co., 66 N.Y. 464; Rohrback v. Germania Fire Ins. Co., 62 N.Y. 47; Barteau v. Phoenix M. Life Ins. Co., 67 N.Y. 595; Holmes v. Charleston M. Fire Ins. Co., 10 Met. 211; Jenkins v. Quincy Mut. F. Ins. Co., 7 Gray, 370; Barrett v. Union M. F. Ins. Co., 7 Cush. 175; Kibbe v. Hamilton M. Ins. Co., 11 Gray, 163; Abbott v. Shawmut Mut. F. Ins. Co., 3 Allen, 213; Stevens v. Warren, 101 Mass. 564; Wilson v. Conway F. Ins. Co., 4 R. I. 141.
1. On principle, as well as for considerations of public policy, agents of insurance companies, authorized to procure applications for insurance, and to forward them to the companies for acceptance, must be deemed the agents of the insurers and not of the insured in all that they do in preparing the application, or in any representations they may make to the insured as to the character or effect of the statements therein contained. This rule is rendered necessary by the manner in which business is now usually done by the insurers. They supply these agents with printed blanks, stimulate them by the promise of liberal commissions, and then send them abroad in the community to solicit insurance. The companies employ them for that purpose, and the public regard them as the agents of the companies in the matter of preparing and filling up the applications, -- a fact which the companies perfectly understand. The parties who are induced by these agents to make applications for insurance rarely know anything about the general officers of the company, or its constitution and by-laws, but look to the agent as its full and complete representative in all that is said or done in regard to the application. And in view of the apparent authority with which the companies clothe these solicitors, they have a perfect right to consider them such. Hence, where an agent to procure and forward applications for insurance, either by his direction or direct act, makes out an application incorrectly, notwithstanding all the facts are correctly stated to him by the applicant, the error is chargeable to the insurer and not to the insured. Ins. Co. v. Mahone, 88 U.S. 152, 21 Wall. 152, 22 L.Ed. 593; Ins. Co. v. Wilkinson, 80 U.S. 222, 13 Wall. 222, 20 L.Ed. 617; Malleable Iron Works v. Phoenix Ins. Co., 25 Conn. 465; Hough v. City Fire Ins. Co., 29 Conn. 10; Woodbury Savings Bank v. Charter Oak Ins. Co., 31 Conn. 517; Miner v. Phoenix Ins. Co., 27 Wis. 693; Winans v. Allemania F. Ins. Co., 38 Wis. 342; Rowley v. Empire Ins. Co., 36 N.Y. 550; Brandup v. St. Paul F. & M. Ins. Co., 27 Minn. 393, 7 N.W. 735; 2 Am. Lead. Cas. (5th Ed.) 917 et seq.; Wood on Insurance, c. 12; May on Insurance, § 120.
2. After the courts had generally established this doctrine many of the insurance companies, in order to obviate it, adopted the ingenious device of inserting a provision in the policy that the application, by whomsoever made, whether by the agent of the company or any other person, shall be deemed the act of the insured and not of the insurer. But, as has been well...
To continue reading
Request your trial