Mullin v. Vermont Mut. Fire Ins. Co.

• Citation: 4 A. 817,58 Vt. 113
• Parties: JAMES MULLIN v. VT. MUTUAL FIRE INS. CO
• Decision Date: 26 June 1886
• Court: United States State Supreme Court of Vermont

4 A. 817

58 Vt. 113

JAMES MULLIN v. VT. MUTUAL FIRE INS. CO

Supreme Court of Vermont, Rutland County

June 26, 1886

Assumpsit on an insurance policy. Plea, the general issue. Trial by jury, September Term, 1884, VEAZEY, J., presiding. Verdict for the plaintiff. The clause in the policy relating to adjustment of losses contained the following: "If there be any misrepresentation, fraud, or false swearing, the claimant shall forfeit all claim by virtue of his policy." The application contained the following "The said applicant hereby covenants and agrees to and with said company that the foregoing is a just, full, and true exposition of all the facts and circumstances in regard to the condition, situation, and value of the property to be insured, so far as the same are material to the risk, and in case any matter material to the risk is not fully stated, or in any material thing is misrepresented, the policy issued hereon shall be void." A negative answer was given by the jury to the following questions: "Was there any fraud, false swearing, or intentional misrepresentation in the proof of loss as presented by the plaintiff? Did Butler in soliciting the insurance, and writing the answers to questions in the application, act in his own behalf independently of any employment by Manley to aid him in procuring the insurance and preparing and forwarding the application?" The building in which the property was insured consisted of a barn and two story building at West Rutland, of which the lower story was occupied as a store and the upper story by the plaintiff as a tenement, in which he and his wife lived, and Daniel Mullin, mentioned in the policy, was his brother and lived with him as a boarder. The furniture, clothing, etc., insured, were in the upper story. It appeared that after the application had been made out and forwarded to the company, the company returned it to J. E Manley, their agent at West Rutland, with the following additional questions: "What kind of goods are kept in this store? by whom owned? are they insured? where? What part of the building are the household furniture, etc.? Are there any other tenants in the building?" The first printed question in the application, namely: "Where situated and by whom owned and occupied, and for what purpose?" was answered as follows: "West Rutland--James Gilmore--occupied as store and tenement by James Mullin." In answer to said additional questions, an addition was made to this answer in the words, "and brother, merchandise, drugs, and groceries--Mullin Bros., owners--stock insured in Lycoming Insurance Co." It appeared, that one Michael Carrigan was the owner of the stock of goods in the store, and that he was the tenant of the store, and his tenancy was not disclosed by the application. Said Carrigan had previously bought the stock of goods at sheriff's sale, and Mullin Bros. were running the store as clerks for him under an agreement that when they should pay him the amount of the indebtedness upon which the goods were taken and sold, they should become theirs. The plaintiff gave evidence tending to show that the application was taken by one J. D. Butler; and claimed that said Butler in doing so acted as agent of the company, and that the knowledge which he claimed that said Butler had at the time of the application of the false statements and concealments as to the ownership of the goods in the store, the tenancy of the store by Carrigan, and the use of the building for the keeping and sale of intoxicating liquors, charged the defendant company with knowledge thereof, and took from it the defences which it would have had but for such knowledge on the part of said Butler. J. D. Butler testified that he supposed that he was the agent of the defendant.

Mr. Manley, called by the defendant, testified that in January, 1879, he was agent of the defendant company at West Rutland, and that the company had no other agent there; that he knew said Butler, and that Butler was at the time a student-at-law in his office, had been there about two years and did some clerical work for him, and solicited insurance as a broker; that Butler was not agent for said company, nor his partner in respect to his (Manley's) agency for said company; that he (Butler) was an insurance broker, and as such engaged in soliciting applications and placing the insurance through agents of insurance companies, and receiving therefor from the agents a commission on each application; that the store of the Mullins was about sixty rods from the office of said Manley; that said Butler did insurance business by looking up applications and placing them through Manley in the said defendant company, and through agents for other companies, and got his compensation for insurance placed through Manley, by Manley's paying him $ 1.50 on each application, and that Manley got his pay from the company by receiving $ 2.00 for each application, and in reference to those applications taken by Butler, the said Manley did the correspondence with the company, that Manley had been appointed agent to the company previous to that time; that he saw the application before it went away from the office to the company, at his office; that said Manley's name was signed to the application by Butler in Butler's handwriting, and was made upon one of the blanks of the company furnished to said Manley by the company. Said Manley further testified, that said application was shortly afterwards returned to him by the company with said additional questions written on the margin; that upon the receiving back of said application, he handed it to Butler and requested him to go and get the reply; and that Butler took the same and shortly after brought it back with the additional answers in Butler's handwriting; that he knew that said Butler had once worked several days on the Mullin Bros.' books at their store. As to the time when said Butler learned or knew of the situation of the property, he stated in his deposition, that in December, 1878, he was employed by James Mullin to examine the books of Mullin Bros., and that at that time he told him of the arrangement between Carrigan and Mullin Bros. in relation to the property insured. The application was approved January 10, 1879. The defendant's evidence tended to show that the time referred to in Butler's deposition, when he was at work on the books, was some three months prior to the time of taking the application. Its evidence also tended to show that the plaintiff was guilty of fraud in his proofs of loss, and of false swearing. The plaintiff conceded that the numerous articles of silver ware which were represented in the proof of loss as lost in the fire, were not lost; but plaintiff's evidence tended to show that they were inserted in said proof of loss purposely by his wife; and plaintiff testified he supposed they were lost, when in fact they were not. It appeared that they were found by officers upon a search-warrant on June 11th, 1879, at the house of the plaintiff's father-in-law, where the plaintiff was then living. At the close of the testimony, the defendant moved the court to direct a verdict, assigning: That false answers were made in the application, (1) as to the kind of goods kept in the store,--as intoxicating liquors; (2) as to the ownership; (3) as to the occupancy; and (4) that there was fraud and false swearing in the proof of loss. The court denied the motion. The defendant requested the court to charge: "4. There is no proof that Butler knew that Carrigan was tenant or occupant of the store; therefore the claim of knowledge by him as an answer to the concealment in the application of that fact cannot be made. 5. That if the plaintiff falsely represented to Mr. Fletcher, the adjuster of the defendant company, that the Lycoming Insurance Company had settled and paid the loss under the policy of the latter company upon the store property, claimed to have been lost by the same fire, with the intent thereby to induce a settlement of the loss here in question, that was such misrepresentation as would, under the terms of the policy, work a forfeiture of all claim on the part of the plaintiff by virtue of the policy. 6. That if the plaintiff in his proof of loss adopted any false statement of his wife with reference to the fact of loss, or the amount or value of property claimed to have been lost, without attempting to know or to investigate the truth of such matter for himself, he thereby became responsible for such statement as misrepresentation within the meaning of the policy, to the extent to which he would have been able by the exercise of reasonable care, to discover the truth in respect to such matters, if he had undertaken to do so. 7. That if the plaintiff in his proof of loss, adopted any false statement of his wife with reference to the fact of loss, or the amount or value of property claimed to have been lost, without attempting to know or to investigate the truth of such matters for himself, he thereby became responsible for such statement as misrepresentation, within the meaning of the policy."

The court charged as to the agency of Butler: "Manley says in substance that he was a law student in his office; been there about two years; that he got his living by teaching and by clerical work, as he could get jobs, and by soliciting insurance as a broker. He says when he brought an application to him and a policy was issued, he paid him $ 1.50 for it. He denies he had any other relation with him in the insurance business, or that Butler worked for him in it, or had anything to do with his agency for this company. The tenor of his testimony is that Butler acted in his own behalf in soliciting insurance; and he paid him on each application the same as he would any broker who brought him...