Morotock Ins. Co v. Fostoria Novelty Glass Co

• Decision Date: 18 March 1897
• Citation: 26 S.E. 850,94 Va. 361
• Parties: MOROTOCK INS. CO. v. FOSTORIA NOVELTY GLASS CO.
• Court: Virginia Supreme Court

26 S.E. 850

94 Va. 361

MOROTOCK INS. CO.

v.FOSTORIA NOVELTY GLASS CO.

Supreme Court of Appeals of Virginia.

March 18, 1897.

Action on Policy—Burden of Proof.

1. Though a policy of insurance provides that the description of the property shall be a part of the contract and a warranty by the insured, it does not impose on plaintiff, in an action on the policy, the burden of proving the truth of such description as a prerequisite to the right to recover.

2. A policy will not be held void because of overvaluation of the property insured, where the overvaluation was not fraudulent, but a fair expression of the honest judgment of the insured, and at no time was there as much insurance on the property as the value at the time of the fire.

Error to corporation court of Danville.

Action by Fostoria Novelty Glass Company against the Morotock Insurance Company. Judgment for plaintiff. Defendant brings error. Affirmed.

Withers & Withers and Berkeley & Harrison, for plaintiff in error.

Peatross & Harris, for defendant in error.

HARRISON, J. This was an action on a policy of fire insurance issued by plaintiff in error.

The defenses relied on were:

First. That the policy sued on had been canceled.

Second. Overinsurance.

Third. Fraudulent representations in procuring policy.

Fourth. Excessive and fraudulent representations of value of property in applica-tion, which induced defendant company to issue the policy.

The plaintiff in error is before this court, as demurrant to the evidence, and, under the rule applicable in such cases, the evidence wholly fails to sustain the contention that the policy had been canceled.

There is no evidence of overinsurance, and that defense is abandoned at bar.

The third and fourth defenses will be considered together. The statements claimed to be untrue were made by the defendant in error in its application for the policy of insurance sued on, and were (1) that the value of the property to be insured was $25,000 and over; and (2) that five other companies, naming them, had insurance on the property. The case seems to have proceeded in the court below upon the theory that these statements were representations, until an instruction offered by the plaintiff in error, which was refused, disclosed the contention now relied on, that they were warranties. There was a printed slip attached to the policy filled up by the insured, distributing the insurance asked for over the several classes of property to be protected, in which this clause appears: "Special reference be had to assured's application and survey No. ——, which is their warranty and a part hereof." In the policy this clause occurs: "If an application, survey, plan, or description of property be referred to in this policy, it shall be a part of this contract, and a warranty by the insured."

The evidence does not show that the statements made in the application were untrue. It is, however, earnestly contended by the plaintiff in error that these statements were warranties, and that, therefore, the burden is upon the plaintiff below to prove the truth of the statements made in the application in the first instance, as a prerequisite to the right to recover.

It is often difficult to determine whether statements on the part of the insured are representations or warranties. Parties will not be held to have entered into the contract of warranty unless they clearly Intended it, and, if a policy is so framed as to render it doubtful whether the parties intended that the exact truth of the applicant's statements should be a condition precedent to any binding contract, that construction which imposes upon the assured the obligation of a warranty should not be favored. National Hank v. Insurance Co., 95 U. S. 673. It is not necessary, however, to decide whether these statements are warranties or not, for, granting that they are warranties, there is no evidence to establish either their truth or falsity, and therefore the controlling question to be determined is, upon whom does the burden of proof rest?

The contention of the plaintiff in error that it is upon the plaintiff in the court below is not supported by the best reason or weight of authority. The application for insurance was in the possession of the plaintiff in error. It was produced and filed as an exhibit with the deposition of one of its witnesses, and, while referred to in the policy as part of the contract, it formed no part of the plaintiff's case. It was not the duty of the plaintiff to set out the application in the declaration, or to prove the truth of the statements therein; but it was incumbent upon the defendant below, if it relied on the fact, to show that the statements made in the application were untrue. Neither of those statements was a condition precedent, which had to be performed before the agreement of the parties became a valid and binding contract. If warranties at all, they were affirmatory, —mere statements of existing facts; and we know of no rule that imposes upon the plaintiff the burden of proving the truth of this class of warranties as a prerequisite to the right to recover.

In the case of Swick v. Insurance Co., 2 Dill. 106, Fed. Cas. No. 13, 692, where the alleged breach of warranty was as to the statement of existing facts, it is said: "The statements and declarations in the application are warranties, and the defense here is that there has been a breach of some of these warranties. Where a party relies on the breach of such a warranty, he must establish it by evidence. This may not be the rule as to promissory warranties; that is, where the party warrants that he will not thereafter do, or will refrain from doing, something stipulated in the policy as to the future." See, also, Insurance Co. v. Ewing, 92 U. S. 377; Insurance Co. v. Gridley, 100 U. S. 614; Insurance Co. v. Daly, 65 Ind. 10; Insurance Co. v. Hazelett, 105 Ind. 220, 4 N. E. 582; Redman v. Insurance Co., 49 Wis. 431, 4 N. W. 591.

The case last cited is directly in point, and is a most satisfactory and conclusive discussion of the question under consideration. After quoting 1 Chit. Pl. pp. 225, 256, 311, and Gould, Pl. §§ 17, 19-21, to show what must be alleged in an action on contract, and what need not be, the court says:

"From the foregoing authorities and principles we deduce the proposition that while the plaintiff in an action on contract must allege and prove performance of conditions precedent to the existence of the contract (if there are any), and must allege an exception in the body of the contract, and exclude it from the assignment of the breach of the contract, he is not required to allege conditions subsequent, and prove performance of them. Neither is the plaintiff required to allege mere warranties made by him of existing conditions, and negative a breach of such warranties. These are not conditions...