Meyer v. Home Ins. Co.

• Decision Date: 23 February 1906
• Citation: 106 N.W. 1087,127 Wis. 293
• Parties: MEYER ET AL. v. HOME INS. CO. ET AL.
• Court: Wisconsin Supreme Court

127 Wis. 293

106 N.W. 1087

MEYER ET AL.

v.HOME INS. CO. ET AL.

Supreme Court of Wisconsin.

Feb. 23, 1906.

Appeal from Superior Court, Milwaukee County; John C. Ludwig, Judge.

Action by Myrtle S. Meyer and another, doing business under the firm name of M. S. Meyer & Company, against the Home Insurance Company and others. From a judgment in favor of plaintiffs, defendants appeal. Reversed.

The plaintiffs commenced separate actions against the defendants, which were consolidated and tried together; the questions in controversy being the same in each case. The actions were brought upon insurance policies to recover for loss of a stock of cigars, tobacco, fixtures, and machinery, and the defense made to each was that the plaintiffs were guilty of fraud or false swearing within the terms of the policies. The stock covered by the insurance, exclusive of machinery and fixtures, was insured by defendants at the sum of $10,600. The fire which damaged the property insured occurred about midnight December 17, 1901. Plaintiffs claimed in their proofs, made and served, that the loss on cigars was $9,306.45, and on tobacco, $3,602.34. The case was tried by the court and a jury, and a special verdict returned, which found that the value of the tobacco destroyed and damaged by fire was $3,152.10, and that the value of the cigars destroyed and damaged was $6,516.20. The jury further found that the plaintiffs prior to the fire did not remove from the factory or dispose of any tobacco or cigars which they afterwards knowingly, willfully, and with intent to defraud included in the proofs of loss, and that the value of the tobacco and cigars destroyed was not overstated by plaintiffs knowingly, willfully, and with intent to defraud the defendants. Motions were made to change the answers to the questions, and to amend the verdict and for judgment in favor of the defendants, and to set the verdict aside, and for a new trial, which were denied, and judgment for plaintiffs rendered upon the verdict, from which this appeal was taken.Fiebing & Killilea (J. H. Roemer, of counsel), for appellants.

O'Connor, Schmitz & Wild, for respondents.

KERWIN, J. (after stating the facts).

1. Error is assigned, because the court refused to direct a verdict for defendants, and in not amending the verdict and ordering judgment upon it as amended in favor of defendants. This assignment involves the question whether the findings of the jury that the plaintiffs did not knowingly, and with intent to defraud, include in their proofs of loss property, which, prior to the fire had been removed from the factory or disposed of, and whether the value of the property included in the proofs of loss was not willfully overstated with intent to defraud the defendants. It is strenuously insisted by appellants that a large quantity of cigars and tobacco had been removed from the stock, disposed of, and included in the proofs of loss, and that the jury by their finding that the value of the tobacco and cigars destroyed and damaged was $3,340 less than claimed in the proofs of loss, in effect, found that cigars had been taken out of stock and disposed of prior to the fire, and included in the inventory and proofs of loss. There is considerableevidence on the part of the defendants, which tends to support this contention, while on the part of the plaintiffs there is evidence tending to contradict it. Under the proof submitted the jury might well have found that the property damaged and destroyed was much less than the amount stated in the proofs of loss, and yet impute no bad conduct to the plaintiffs. It is very clear from the verdict that they did not intend to charge plaintiffs with willfully including in the proofs of loss property not destroyed or overstating the value of the property included, because in their verdict they specifically so found. We have had much difficulty in endeavoring to reconcile the evidence upon the material controverted issues upon the subject under discussion, but are unable to come to the conclusion that the findings of the jury are so far unsupported by the evidence as to warrant us in disturbing them. This court will set aside the findings of the jury and the ruling of the lower court respecting the question whether the verdict is sustained by the evidence only when there is no evidence to sustain the verdict or findings of the jury “or where, though there be some evidence in its support, still the great weight of the evidence is against it, and that weight is so reinforced by all the reasonable probabilities and inferences that it becomes overwhelming.” Bannon v. Insurance Co., 115 Wis. 256, 91 N. W. 666;Beyer v. St. Paul F. & M. Ins. Co., 112 Wis. 138, 88 N. W. 57;Wunderlich v. Palatine F. Ins. Co., 104 Wis. 382, 80 N. W. 471.

2. Error is assigned because of the following instruction: “If you find that the plaintiffs willfully included in the proofs of loss property removed by them, and such removal or disposition would secure no advantage to the plaintiffs in the adjustment and payment of the loss under the policy of insurance, to the prejudice or injury of the defendants, and would not be liable to have that effect, then there was no legal fraud as referred to in this question, unless you find that such acts on the part of the plaintiffs were liable to deceive the defendants and cause them to pay more than they in justice ought to pay.” Each policy contained the following provision: “This entire policy shall be void * * * in case of any fraud or false swearing by the assured touching any matter relating to this insurance or the subject thereof, whether before or after a loss.”

The vital question litigated upon the trial was whether there was any fraud or false swearing within the meaning of the foregoing provision. The plaintiffs to verify their claim of loss presented to the adjusters their books of account and inventories for the purpose of showing the amount of property on hand at the time of the fire, and it is claimed by defendants that the amount of property so represented as being destroyed and damaged was not, in fact, on hand or damaged or destroyed. Plaintiffs also made and furnished to defendants verified proofs of loss in which the amount of the loss on tobacco and cigars was stated to be $3,340 more than the amount of the loss as found by the jury, and more than the amount in fact on hand as claimed by defendants. One of the main questions litigated upon the trial, therefore, was whether the plaintiffs, prior to the fire, had removed from the factory or disposed of tobacco or cigars, which they afterwards knowingly, willfully, and with intent to defraud, included in the proofs of loss. And upon this issue the court submitted to the jury the following question: “Did the plaintiffs prior to the fire remove from their factory or dispose of any tobacco or cigars which they afterwards knowingly, willfully with intent to defraud the defendants, included in the proofs of loss?” Upon the issue thus raised by this question there was a sharp contest and the question arises whether the instruction under consideration was a proper statement of the law under the circumstances disclosed by the evidence. It is claimed on the part of the defendants that the plaintiffs were guilty of fraud in representing the amount of property destroyed and false swearing in making their proofs of loss, and there was evidence sufficient to go to the jury upon this question. The evidence properly raised the question submitted; hence it was necessary that the jury be clearly instructed upon the law respecting these controverted facts. The question submitted to the jury embraced a clear statement of the facts necessary to constitute fraud or false swearing within the meaning of the policy. Whether these facts existed or not was for the jury, and whether, if there was false swearing, it secured any advantage to the plaintiffs in the adjustment and payment of the loss to the prejudice or injury of the defendants was not embraced in the question, and was a matter of no concern to the jury. An instruction respecting the same could serve no proper purpose, and was liable to mislead in view of the testimony in the case. The evidence tended to show that the property damaged and destroyed was less than that included in proofs of loss. The main point in issue, therefore, was whether plaintiffs had removed or disposed of property, which they afterwards knowingly, willfully, and with intent to defraud, included in the proofs of loss. If there was false swearing within the meaning of the policy, it was immaterial whether plaintiffs derived any advantage to the prejudice of the defendants in consequence thereof or not. This is in accordance with the plain terms of the policy. The use of the words “false swearing” in connection with the word “fraud” plainly indicates that either fraud or false swearing was designed to have the effect of defeating the policy, regardless of the ultimate effect of the false swearing upon either party to the contract. False swearing, when knowingly and willfully done, with intent to defraudthe insurer, avoids the policy regardless of the ultimate effect of such false swearing, and it is very plain that the word “fraud” was used in connection with the words “false swearing” so as to cover frauds otherwise than by false swearing. It is clear that if the words “false swearing” be given their plain ordinary meaning, they cannot be held to mean that it was only “false swearing” which worked an advantage to the insured to the prejudice or injury of the insurer in the adjustment and payment of the loss that can avoid the policy. If the plaintiffs, knowingly and willfully with intent to defraud the defendants, swore falsely in making the proofs of loss, such act amounted to a fraud upon the defendants, which avoided the policies, irrespective of the ultimate effect upon the defendants. If the false swearing must secure an...