The Indiana Farmers' Live Stock Insurance Company v. Rundell

• Decision Date: 21 June 1893
• Docket Number: 655
• Citation: 34 N.E. 588,7 Ind.App. 426
• Parties: THE INDIANA FARMERS' LIVE STOCK INSURANCE COMPANY v. RUNDELL, ADMINISTRATOR
• Court: Indiana Appellate Court

34 N.E. 588

7 Ind.App. 426

THE INDIANA FARMERS' LIVE STOCK INSURANCE COMPANY v. RUNDELL, ADMINISTRATOR

No. 655

Court of Appeals of Indiana

June 21, 1893

From the Owen Circuit Court.

Judgment affirmed.

W. R Harrison, D. E. Beem and W. Hickam, for appellant.

J. H Jordan and O. Matthews, for appellee.

OPINION

DAVIS J.

This was an action on a policy of insurance, to recover damages for the loss sustained on account of the death of the stallion insured, within the term of the policy. The policy was issued on February 16, 1891, and was a renewal of a former policy. The cause was tried by the court. On the facts specially found, conclusions of law were stated and judgment rendered in favor of appellee.

Concerning the statements in the application, and the finding of facts, counsel for appellant say: "Let us look then to the application in this case and see what was represented and warranted by this insured to procure this insurance policy:

"In answer to the first question, What is the cash value of stallion?' his answer is, $ 900.'

"In answer to the eighteenth question, State service fee,' his answer is, $ 20.'

"In answer to question nineteen, How many seasons has he made in this locality?' he answers, one.'

"In answer to question twenty, Number of mares served last year, and number of colts obtained, and what was the service fee?' he answers, 7--5--$ 20.'" That is he served 7 mares, obtained 5 colts, and the service fee was $ 20, that is, $ 20 each.

In relation to and upon the several points, propositions and answers in the application above referred to, the findings of the court are as follows:

"The value of the horse, the court finds to be, instead of $ 900, only $ 750, when insured.

"The service fee of the horse for the year 1891 the court finds to have been, instead of $ 20, without exception, to have been from $ 10 to $ 15, and never as high as $ 20.

"During the season before, of 1890, instead of serving 7 mares and obtaining 5 colts, at $ 20 for each, the court finds that he served 6 or 7 mares and got one colt. Nothing is found as to price."

Counsel then call attention to the terms of the application and policy, which, with others, are hereinafter recited, and insist that the statements and answer above set out constitute warranties, and that on account of the breaches thereof, as shown by the finding, the policy is void.

The only question presented for our consideration is, whether the policy was rendered void by reason of the facts found by the court, as above quoted. In other words, do the answers to the questions in the application, to which we have called attention, constitute a warranty, under the terms of the contract, to be literally and exactly fulfilled, as distinguished from representations which must be substantially performed in all matters material to the risk, that is, in matters which are of essence of the contract?

It should be borne in mind that the company, through its attorneys, officers, or agents, prepared the application (except the answers) and also the policy, for the purpose, the court will assume, both of protecting the company against fraud and of securing the just rights of the assured under a valid contract of insurance. The language which the court is required to interpret is the language of the company. The time of making the contract, the situation of the parties, together with all the circumstances attending the transaction, may, and ordinarily do, have more or less bearing upon the interpretation and construction of the contract.

It is apparent that when the application was made, in February, 1891, the parties understood, from the answers referred to, that five of the mares served by said stallion during the preceding season of 1890 were then with foal, as in the ordinary course of gestation, in such cases, the colts would not, as the result of such service, have been foaled at that time.

The burden was on the appellant to show that the answers of the assured, in the application, were untrue. National Benefit Ass'n v. Grauman, 107 Ind. 288, 7 N.E. 233.

The basis of the argument of counsel for appellant is stated in their own language, as follows:

"The facts, of his value, that he had made a stand the preceding season,' and had been successful in producing foals in five of seven opportunities, and that his services commanded the fee of $ 20 for each service--all entered and went largely to make up the character, the quality, and insurable value of the animal as a breeding stallion. To have been false in any one of these answers, and especially as to his success in producing foals and as to what his services commanded, was enough to have rendered this policy void; but when we see, from the findings, that each and all of them were false, and were so framed and set out in the record and alongside the warranties themselves, we are driven to the conclusion that the court erred in stating its conclusions."

There is no finding whatever as to the fee charged for the season of 1890.

When the special finding of facts, as to a material point, are not full and complete, it is deemed to be adverse to the party on whom the burden of the issue rests. Vinton v. Baldwin, 95 Ind. 433; Citizens Bank v. Bolen, 121 Ind. 301, 23 N.E. 146; Yerkes v. Sabin, 97 Ind. 141; Town of Freedom v. Norris, 128 Ind. 377, 27 N.E. 869 (384).

Whether the questions and answers should be construed as referring to the number of mares with foal or as to the number of colts foaled, is not, in the view we have taken of the case, a matter of vital importance. It must be understood, from the finding of the court, that one colt only was foaled in 1891, as the result of the services of the insured stallion in 1890.

The answers as to the number of mares served and the fee for such service in 1890, under the authorities, therefore, so far as the consideration of the questions in this case are concerned, must be regarded as true. Construing the questions and answers in the application as a statement that the stallion had, during the season of 1890, served seven mares at $ 20 each, and, as the result of such service, five of them were then with foal, what is the effect of the finding that the stallion had in fact got one colt?

Under the view most favorable to appellant, the alleged breach of the warranty or representation (as the same may be hereinafter determined), on which the principal contention of appellant is predicated, is that one colt was got by said stallion instead of five.

It is well settled that the policy and application, when the latter is made a part of the former, must be construed together as one contract, and that statements and answers will not be construed as warranties, when the context and language of the writings justify construing the same as representations. In short, in such construction, the courts will be liberal in order to give the policy effect rather than to make it void. Northwestern, etc., Life Ins. Co. v. Hazelett, 105 Ind. 212, 4 N.E. 582 (216); Moulor v. American Life Ins. Co., 111 U.S. 335, 28 L.Ed. 447, 4 S.Ct. 466; Nat'l Bank v. Insurance Co., 95 U.S. 673, 24 L.Ed. 563.

The language used in the application and policy in this case, as hereinafter shown, construes the statements in the application as representations, terms and conditions, and also seeks to construe them as warranties, and this inconsistency renders the contract capable of two...