Stone v. The Hawkeye Ins. Co.

• Decision Date: 23 April 1886
• Citation: 28 N.W. 47,68 Iowa 737
• Parties: STONE v. THE HAWKEYE INS. CO
• Court: Iowa Supreme Court

28 N.W. 47

68 Iowa 737

STONE v. THE HAWKEYE INS. CO

Supreme Court of Iowa, Dubuque

April 23, 1886

Appeal from Van Buren District Court.

ACTION on a fire insurance policy. Verdict and judgment for plaintiff. Defendant appeals.

REVERSED.

Phillips & Day, for appellant.

Sloan Work & Brown, for appellee.

OPINION

REED, J.

The property covered by the insurance was a stock of general merchandise contained in a frame building situated in Mount Sterling, Van Buren county. During the life of the policy the building, and the greater portion of the goods contained in it, were destroyed by fire. The policy was issued on an application taken by a soliciting agent of defendant, a copy of which was indorsed on the policy. One of the provisions of the application is as follows: "The applicant agrees that each of the foregoing answers, statements and valuations are true, and a warranty on his part; and that the accepting of this risk, and the issuing of a policy of insurance thereon, by the company, is to be based solely upon this application." It was also stated in the application that the building in which the goods were situated was insured for $ 800; also that the average value of the stock carried by plaintiff was $ 4,500, and that the last account of stock was taken in July, 1882, (some eighteen months before the application was made,) and that the stock invoiced at that time $ 4,500. Defendant alleges that each of these statements was false, and was willfully and fraudulently made, and by reason thereof the policy never went into force and effect. It was also stated in the application that all of the exposures within 100 feet of the building containing the goods were correctly shown on a plat which accompanied the application; and it is alleged by defendant that this representation was false, and that there were a number of exposures within 100 feet of said building which were not shown upon the plat.

The policy contains the following provision "And if there appear any fraud, or attempt to defraud or false oath or declaration, or claim for an amount more than is actually due or legally entitled to, or that the fire shall have happened by the procurement, willful act, means or connivance of the insured or claimants, he, she or they shall be excluded from all benefit under this policy, and the company released absolutely from all liability thereunder." In his proofs of loss plaintiff represents that the goods in the building at the time of the loss were, according to his belief, of the value of $ 4,000, and that all except $ 227.94 worth was destroyed. Defendant alleges that this representation was false, and was made with a fraudulent intent, and that the goods destroyed were of much less value than represented in said proofs, and that plaintiff made claim for an amount largely in excess of the amount actually due under the policy. It is also charged that the fire which destroyed the insured property occurred by the willful act, procurement or connivance of plaintiff.

It is alleged in the petition that the survey and measurements set out in the plat which accompanied the application were made by the agent, also that he made said plat, and had full knowledge, from a personal examination of the premises at the time he took the application, of the condition of the property, also that he received the premium with this knowledge, and transmitted it to the company, and that it received and retained the same, and accepted the application and issued the policy thereon; and plaintiff claims that defendant is estopped by these facts from now asserting that the exposures within 100 feet of said building were different from what is shown by said plat. He also alleges that the agent filled out the application, and that, when plaintiff was asked by him whether the building was insured, he answered that he did not have positive information on the subject, but stated that he thought it was insured for $ 800, and that he had no knowledge, when he signed the application, or when he received the policy, that the agent had not written his answer to said question as he gave it.

In addition to their general verdict, the jury found specially that the building was not insured when the application was signed; also that plaintiff was not prevented by any fraud or deceit from ascertaining the contents of the application when he signed it. They also found that the value of the goods destroyed was but $ 2,091.99, and that plaintiff represented in his proofs of loss that the value of the goods destroyed by the fire was $ 1,680.07 greater than their value actually was. On these special findings defendant moved for judgment in its favor, notwithstanding the general verdict, and the overruling of this motion is assigned as error.

I. The district court instructed the jury, in effect, that plaintiff's right of recovery on the policy would not be defeated by the false statement in the application as to the insurance on the building, if that statement was written in the application by defendant's soliciting agent without plaintiff's knowledge, and plaintiff had made truthful answers to such questions as were asked him by the agent concerning the insurance on said building; and it is conceded that the evidence justified the jury in finding that the statement was written in the application by the agent without plaintiff's knowledge, and that the latter answered truthfully that he thought the building was insured for $ 800, but that he had no positive information on the subject. We are of the opinion that the instruction is correct, and that the plaintiff's right to recover on the policy is not defeated by the special finding that the building was not insured. The agent, in whatever he did about the preparation of the application, acted for his principal, the insurance company. He was empowered by it to prepare such applications for persons desiring insurance, and to forward the same to it. He wrote the application in question in the performance of the duties of his agency; and, if the company was deceived or misled by the statement in the application that the building was insured, this was in consequence of the negligent or wrongful manner in which he performed the duties of his employment, and it is consistent with justice, as well as the settled principles of the law, that the consequence of his wrong should be visited upon his principal rather than upon plaintiff, who was guilty of no bad faith in the transaction. Wood, Ins., § 384; Malleable Iron Works v. Phoenix Ins. Co., 25 Conn. 465. It makes no difference, we think, that plaintiff agreed that the representations in the application should be regarded as warranties by him. He consented to that agreement in the belief that the agent had written down in the application the very statement he had made. As the agent was empowered by the company to take the statement, and acted under that authority when he wrote it, plaintiff was not charged with the duty of seeing to it that it was correctly taken. He had the right to assume that this was done. It would be manifestly unjust to hold that he was bound absolutely by a statement which was wrongfully interpolated into the application by defendant, and which he did not know was there when he consented to the agreement.

II. We are also of the opinion that plaintiff's right of recovery is not necessarily defeated by the special finding that in making...