State Ins. Co. of Des Moines, Iowa, v. Taylor

• Decision Date: 20 June 1890
• Citation: 14 Colo. 499,24 P. 333
• Parties: STATE INS. CO. OF DES MOINES, IOWA, v. TAYLOR.
• Court: Colorado Supreme Court

24 P. 333

14 Colo. 499

STATE INS. CO. OF DES MOINES, IOWA, v. TAYLOR.

Supreme Court of Colorado

June 20, 1890

Commissioners' decision. Appeal from district court, Chaffee county.

On the 30th day of January, 1885, appellant issued to appellee a policy of insurance on his frame house, used as a residence in the village or town of Hancock, Chaffee county, and its contents, including wearing apparel, family stores, and provisions, for the sum of $1,200,--$800 being on the building and $400 on the contents; insuring against fire and lightning for one year for a premium of $48. In the body of the policy appears the following: 'And it is expressly understood and agreed by the parties hereto that application and survey No. 183,956, made by the assured, is hereby made a part of this policy and a warranty on the part of the assured, and that this policy is issued upon the faith of the statements in said application and survey as they thus appear in writing therein, only.' Also: 'Any false statement in the application shall make this policy void.' 'In case of loss, any attempt at false swearing or fraud of any kind shall be a forfeiture of all claims against the company on this policy.' And: 'This company reserves the right to rebuild and repair in all cases of loss.' Of the various provisions contained therein these are thought to be all that are involved in, or necessary to a determination of the case. Upon the back of the policy is what purports to be an application for insurance made by appellee, with his name attached, in which it is stated, among other things, that the house was 'frame;' 'one to three years old;' 'in good repair;' 'cash value, $1,500;' 'finished;' 'west and north side painted.' 'It is a two-story frame building, 18X36; one addition 10X22, and one 10X16;' 'it is occupied by owner as a private dwelling.' 'Shingle roof.' 'Chimneys corrugated or double iron;' 'start below ceiling and roof.' Number of stoves, 'two in use, two others occasionally.' 'Pipes do not enter brick flues;' 'do not pass through partitions or floors.' 'They are secured by double thimbles of sheet iron.' That the 'barn was distant from the house about 90 feet.' 'South 8 feet, a one and 1-2 story log residence, now vacant.' 'East 90 feet to stable, frame 16X30.' On the 3d day of November of the same year, the house took fire in the upper part (ceiling or roof) from a stovepipe and was destroyed, with most of the contents. On the next day appellant was notified of the loss; and, shortly after proper proof was made of the loss, and demand for payment, which was refused, and a suit was instituted. In the complaint the policy of the insurance is set out in full, and on the back of it the supposed application of appellee for insurance.

In the answer the defendant admitted the making and delivering of the policy, denied that the loss was $1,200 as shown by proofs of loss submitted, and said it ought to be not to exceed $524.62. The defense relied upon was, the application for insurance made and signed by the plaintiff was the basis of the contract upon which the policy was made, and that it was false or fraudulent in many particulars, notably (1) in the value of the house, stated to be $1,500 when in fact it did not exceed in value the sum of $300; (2) that the building was not occuped as a private dwelling, but as a public inn and boarding-house; '(3) that the chimneys in said house were not of corrugated or double iron, and that there were no chimneys in said house, and never was; (4) that the chimneys in said house did not start below the ceilings and roof in said house, and no chimneys whatever were in said house, or were ever used by the plaintiff, at any time; (5) that the stovepipes did not pass through partitions, floors, ceilings, and roof of the house, and were unprotected; (6) that the stovepipes were not secured at all as stated in the application; (7) that the barn was not 90 feet distant from the house, and not to exceed 20 feet; (8) that the log house was not 8 feet distant from the insured premises,--not to exceed five feet,--and at one point connected with the house; (9) that there was an addition to the house, 8X16 feet, not mentioned in the application at all.' And as a special defense that the log-house adjoining was at the time of the fire, and for two months previous had been, occupied as a grocery store, and that the proprietors kept in stock quantities of kerosene oil and giant powder, which greatly added to the risk, and that appellee failed to notify defendant of the fact. All the averments in the several special answers were traversed by the replication of the plaintiff. The case was, by agreement of parties, tried by the judge of the district court without a jury. He found for the plaintiff in the sum of $1,045, and judgment was entered for that amount.

Stuart Bros., for appellant.

W. I. Decker and C. A. Allen, for appellee.

REED C., ( after stating the facts as above.)

It is contended by appellant in argument that the appellee, by setting out in his complaint the application for insurance from the back of the policy, upon which his name appeared, indorsed it as his act, and make it a part of the contract sued upon, and was estopped from denying it. The pleader set out the policy of insurance as the basis of his action, and then says: 'On the back of the policy is a copy of the application made for the insurance, in writing and print, as follows.' It is neither indorsed as correct, nor adopted as, or stated to be, the application of the insured. The appellant, in its amended answer, states that appellee made his application for a policy of insurance in writing, setting forth the alleged application, and avers that material statements in the application were not true, and for that reason seeks to avoid liability for the loss. The appellee, in his replication, says he did not make or sign any written application, but that the one referred to was made by Van Arsdale, the agent of the company, without his knowledge or consent. There was no demurrer or motion filed to this reply, and the case proceeded to trial upon the issues made by the complaint, answer, and replication. By these pleadings the responsibility for the written application was made a material issue in the case, and the court properly allowed appellee to testify that he did not make any written application, and also to give his version of what actually took place between the parties in reference to the transaction. It is apparent from the evidence that the application for insurance upon which the policy was issued was incorrect in many important particulars; so far from being a true statement of the facts in regard to the insured property as to render a policy void if established by proof to be the act of the insured.

The first question to be determined from the evidence and the law applicable to the facts is whether the application was that of the insured, or for which he was responsible, or the application and act of the insurer by its agent, for which it was responsible. That A. D. Van Arsdale was the agent of the appellant to the extent of soliciting insurance, sending the applications for insurance to the company, obtaining policies, delivering them to the insured, and collecting the premiums, was established by is own evidence and that of J A. Dubbs, the general agent for the state of Colorado. That in this instance he solicited the insurance is shown by the evidence of the appellee, and is undisputed. In regard to the application, there is no great conflict between the testimony of appellee and Van Arsdale. It plainly appears that no application was made out by appellee, or in his presence, nor submitted to him, nor signed by him, and no authority given to the agent to sign his name; that the application was not seen by him, and that he was not informed of its character or contents; that the interview between him and the agent occurred late at night in a saloon, without a blank form of application, and with no copy of the questions to be asked and answered. Van Arsdale says: 'I asked questions, and took his answers, and put them down from memory, as nearly as I could, next morning.' Appellee specifically denies the making of any of the important statements contained in the application relied upon to defeat a recovery; and, in regard to several of them, he is corroborated by Van Arsdale, and in no important point is he contradicted by him. Van Arsdale, in making up and forwarding the application, cannot be regarded as the agent of the insured, as supposed and contended by counsel for appellant. 'Where an insurer intrusts applications in blank for insurance to a person who forwards the same to the insurer, and is the medium through whom the insurer delivers the policy and receives the premium, the person so intrusted therewith is treated as clothed with the requisite authority to effectuate the duties confided to him, and to that extent represents the company, and can bind it. * * * The assured has a right to rely upon it that the agent has authority to explain the inquiries put in the application, and to determine what facts are required to be stated, as well as how they shall be stated, and, acting upon his direction, if any error is committed, it is chargeable to the insurer, and not upon the assured; and, if he fills out the application, and, being correctly informed of the facts, misstates them, or omits to state them, the consequences are not to be visited upon the assured.' Wood, Ins. § 384; Malleable Iron-Works v. Phoenix Ins. Co., 25 Conn. 465. 'When a person is in fact the agent of the insurer in procuring a policy, a clause in the policy that persons so acting are agents of the insured, and not of the insurer, does not change the fact. He is...