#### Roloff and another, Respondents, vs. Farmers’ Home Mutual Insurance Company of the Town of Ellington and Adjoining Towns, Appellant.

*December 8, 1906*

January *8, 1907.*

*Fire insurance: Fraud: Incumbrances: Evidence: Enhancing of risle: Duty of insurer.*

1. In an action to recover for a loss under a policy insuring a cheese factory standing on leased ground, under the evidence, stated in the opinion, it is *held*that charges of intentional and fraudulent withholding of knowledge in relation to the title to the property, or of other facts which the insured knew, and knew to be material to the risk, were not sustained.

2. When an applicant for insurance has answered truthfully all questions submitted to him and has not suppressed any fact within his knowledge tending to enhance the risk, he has performed all that is required of him, and if more information is necessary to a full understanding of the risk it is the duty of the insurer to seek it, or at least to ask for it.

Appeal from a judgment of the circuit court for Outa-gamie county: John G-oodland, Circuit Judge.

*Affirmed..*

Suit for loss under an insurance policy, tried to the court. It appeared, without dispute, that the principal building destroyed was a cheese factory, built by one Armstrong upon certain premises leased to him for one dollar as long as he should maintain a cheese factory thereon, by one Conrad, and that some three years before the fire Armstrong had executed a contract, in the ordinary form of a land contract, providing that, upon completed payment, he would execute to plaintiff a full and clear title to the building by bill of sale, and at the same time had manually delivered to plaintiff his lease. Before the insurance was written the entire amount of this purchase price had been paid, but no bill ef Sale .had been executed. The lease contained a prohibition against subleasing without the consent of Conrad, but it was testified by *Roloff*and disputed by Conrad that a verbal con*403■sent was given at about tbe time tbe former purchased tbis building, after wbicb be bad spent large sums in addition and ■equipment. Tbe application for tbe insurance stated tbat tbe property was not incumbered, and in response to question, “State tbe value of tbe whole property, including tbe land,” stated, “Stands on leased ground.” It was proved, without dispute, tbat both tbe defendant’s agent and its president were informed, at tbe time of writing tbe insurance, tbat plaintiff did not own tbe ground on wbicb tbe building stood, but tbat tbe same bad been leased for tbat purpose by Conrad. Numerous defenses of arson, fraud in proofs, etc., were introduced by tbe tw© questions in tbe application above stated. Tbe court found tbat there was no fraud therein, ■but tbat said answers were true, and accordingly rendered judgment in favor of tbe plaintiff, together with one *Jacquot,*who held a subsequently executed mortgage upon tbe building ; from wbicb judgment tbe defendant appeals.

For the appellant there were briefs by *Pierce & Lehr,*and oral argument by J. *E. Lehr.*

For the respondents there was a brief by *A. M. Spencer*and *A. C.*Siekman, and oral argument by *Mr. Spencer.*

Dodge, J.

Tbe reckless interposition of defenses involving charges of crime and fraud is not creditable to a corporation organized to supply indemnity to those unfortunate enough to lose their property by fire, where, as seems to be tbe case here, such charges have no foundation even, apparently, in tbe imagination of tbe defendant. Tbe charges of arson in destruction of tbe property and of perjury in tbe proofs of loss have not been supported, nor sought to be, by tbe offer of a word of evidence of any sort. Tbe remaining allegation of intentional and fraudulent withholding of knowledge in relation to tbe title of tbe property bad apparently slightly more of good faith to excuse it. Plaintiff bad stated in bis application to tbe defendant’s agent tbat the property *404to be insured was not incumbered; that it stood on leased ground; that it was occupied by the owner; and that the same was a full exposition of all facts in regard to the condition,, value, and risk of the property to be insured so far as known to the applicant and material to the risk. This statement was-made to an agent who, as plaintiff was perfectly aware, had full knowledge that the ground belonged to one Conrad, that the building had been erected thereon by one Armstrong, under lease from Conrad, and that the same company had carried insurance thereon for Armstrong, and had twice insured the building for plaintiff after its transfer to- him from Armstrong. The utmost diligence of counsel has been unable to suggest any untruth in the letter of these affirmative statements. Of course, both parties to the conversation understood that the property referred to was the building, and that was wholly unincumbered, except as any building erected by a lessee may be said to be incumbered by tire rights of the landlord. The building was occupied by the owner, namely, the plaintiff, and the defendant’s agent well knew that he, and not the owner of the ground, occupied it. It was on leased ground, as the agent had known, for many years, and as he communicated somewhat industriously by letter to the president of the company before the insurance was written. But was there any fraudulent concealment of other facts which the plaintiff knew, and knew to be material to the risk ?

Here it is urged that, since the lease to Armstrong contained a prohibition against underleasing the premises without the consent of the owner and a provision that the latter might expel the lessee in such an event, plaintiff’s occupancy was momentarily terminable by the landlord, and that this fact was one enhancing the risk. The evidence is well-nigh conclusive that plaintiff had no knowledge of any such situation. When Armstrong sold him the building he had also manually transferred to him the lease, and plaintiff, according to his own testimony, had notified the owner of the land *405and obtained bis consent to sucb assignment of right of possession. In this he is in some measure contradicted by Conrad, who, however, upon cross-examination, admitted a part of the conversation which he had first denied *in toio,*and admitted further and subsequent dealings with the plaintiff serving strongly to confirm the probability of latter’s statement, so that we do not hesitate to hold that the evidence preponderates in its favor, although the trial court has not found specifically on that question. Obviously the transaction between Armstrong and *Roloff*evinced a purpose in both to transfer from one to the other the full term for which the land was occupied, for the sale of the building was absolute and complete. Whether such assignment could be effective at law without writing under the statute of frauds, a most persuasive case was presented for equity to declare and enforce it,' for plaintiff had at once gone into possession on the faith of whatever oral agreement was made between him and Armstrong, had paid over $700 for the building, and had expended large sums in the improvement, enlargement, and equipment thereof. Certainly a claim by Armstrong to possession of the land would have been deemed fraudulent as against plaintiff. We cannot escape the conclusion that plaintiff had, by virtue of such conduct of Armstrong and the consent by Conrad, become assignee of said lease, and tenant according to- its terms, so that his statement was strictly true, even construed as declaring that the ground -was leased to him.

The evidence wholly fails to show that any facts were known to the plaintiff in any wise limiting his absolute title to this building or affecting the insurance risk thereon, except the one fact that he did not own the ground on which it stood, and that he communicated industriously in his application. If defendant was interested to know the terms of the lease 'or tenancy as affecting the value of plaintiff’s interest in the building, the duty was upon it to inquire. When an applicant for insurance has answered truthfully all the questions *406submitted to Him and bas not suppressed any fact witbin bis-knowledge tending to enhance tbe risk, be bas performed all tbat is required of bim. If more information is necessary to a full understanding of tbat risk, it is tbe duty of tbe insurer to seek it, or at least ask for it. *Alkan v. N. H. Ins. Co.*53 Wis. 136, 141, 10 N. W. 91; *Dunbar v. Phenix Ins. Co.*72 Wis. 492, 501, 40 N. W. 386.

*By the Court.*— Judgment affirmed.