Case Name: INSURANCE CO. OF NORTH AMERICA VS. MELVIN
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1874-03-16
Citations: 1 Walk. 362
Docket Number: No. 168
Parties: INSURANCE CO. OF NORTH AMERICA VS. MELVIN.
Judges: 
Reporter: Reports of cases decided by the supreme court of pennsylvania which have been omitted from the regular reports
Volume: 1
Pages: 362–365

Head Matter:
INSURANCE CO. OF NORTH AMERICA VS. MELVIN.
Where an insurance agent agreed to allow kerosene oil to be used on the premises, but forgot to endorse it on the policy, such permission may be shown by parol.
Where there was no attempt to defraud, or intentional false statement, a serious discrepancy between the amounts and values of goods claimed in the statement of loss, and the amounts proved at the the trial, will not avoid the policy.
Error to Common Pleas of Luzerne County. No. 168, January Term, 1874.
Debt on insurance policy in the sum of $3,750. Same insurance in Home Insurance Co. of New York. Both policies contained a stipulation that permission to use kerosene must be endorsed on the policy in writing. The evidence showed that tbe agent who effected the insurance for both companies agreed that kerosene might be used, and that he endorsed it on the Home policy, but accidentally omitted it on the North American. The judge charged the jury inier alia as follows : “If on the other hand the jury find, under all the evidence, the books, bills of purchase, inventories and papers of the plaintiff were burned, and that the bills of particulars, itemized statements of stock and values furnished to the company were honestly, truthfully and in good faith made up from the best sources of information and accuracy within his power; that [there was no intent to defraud, and no intended misrepresentation, false statement or concealment in his proofs of loss; a discrepancyjbetween the plaintiffs statement of quantity and values of his stock, thus made in good faith and to the best of his judgment, and the amounts and values as shown by the evidence upon the trial will not defeat his right to recover. If the jury find under the evidence that the plaintiff in good faith furnished to the company all the evidences of loss within his power; that his representations, statements and estimates were honest, fair and correct to the best of his judgment, with do attempt to defraud, he may recover the actual loss sustained, even although his stock on hand when the fire occurred was less than the amount insured].”
The sworn statement showed a loss oí $12,454. The policy contained a provision that if the insured “shall make any attempt to defraud the company by false swearing or otherwise, then and in every such case this policy shall be null and void.” October 23, 1873, verdict for plaintiff for $3,497.81.
The insurance company took a writ of error complaining of the refusal of the Court to direct a verdict for the defendant on account of the permission to use kerosene not being endorsed on the policy ; they also assigned for error the portion of the charge before quoted, which is included in brackets.
A. T. McClintock and E. N, Willard, Esqs, for plaintiff in error
The permission to use kerosene was not endorsed in writing, and it was not shown that the agent had any authority to waive the requisition that it should be in writing.
The difference between the amount claimed in proof of loss and the verdict is so great, as to show fraud and false swearing; Levy vs. Baillie, 7 Bing. 349; 20 E. C. L. 120; Park vs. Phœnix Ins. Co., 19 Upper Canada, Q. B. 110; Franklin Ins. Co. vs. Updegraff, 7 Wright 350. And the burden is on plaintiff to show that it is the result of error and not of an intention to defraud; Hoffman vs. Western Marine Fire Ins. Co., 1 La. An. 216.
John Handley and H. W. Palmer, Esqs., contra.
Insurance policies may be varied by evidence showing mistake, fraud, &c.; Moliere vs. Penna. Fire Ins. Co., 5 Rawle 342. The permission ought to have been endorsed, and it will be considered as done; Spring Garden Ins. Co. vs. Scott, ante 181. An insurance company will not be allowed to take advantage of the mistakes of its agents; Beal vs. Park Ins. Co., 16 Wis. 241. A reasonable estimate of the loss is all that is required; Mason vs. Harvey, 8 Exchequer 819; McLaughlin vs. Washington Ins. Co., 23 Wendell 525; Franklin Ins. Co. vs. Updegraff, 7 Wr. 350. No inference of false swearing can be drawn from the verdict of a jury. And the fact that the jury gives a verdict for less than the claim does not sustain a charge of false swearing; Moore vs. Protection Ins. Co., 29 Maine 97; Franklin Ins. Co. vs. Culver, 6 Ind. 137; Phœnix Ins. Co. vs. Munday, 5 Caldwell (Tennessee) 547; Gerhauser vs. North British Ins. Co., 6 Nevada 15. A false statement of loss to avoid a policy must be wilfully false in a material matter with intent to deceive the insurer; Marion vs. Great Republic Ins. Co., 35 Missouri. The burden of proving the falsity of the statement is on the company; Insurance Co. vs. Weides, 14 Wall. 375. Whether the discrepancy is so gross as to avoid the policy is a question of fact for the jury.

Opinion:
The decision of the lower Court was affirmed by the Supreme Court, on March 16, 1874, in the following opinion:
Per Curiam.
The interpretation of the testimony of Fuller, the witness, if disputed was for the jury. We may say we understand he said he gave permission to use petroleum and oil under both the policies, and endorsed it on the Home ¿policy, but omitted endorsing it on the other unintentionally, and can account for the omission only through his forgetfulness. This, we think, is the meaning of the note taken of what he said. It was therefore competent to show, that the want of the endorsement was an accidental omission to enter, what was actually agreed upon. It was the mistake of the agent of the company and ought not to prejudice the plaintiff. This renders the second assignment of error unavailing. The language of the charge is not literally that of the testimony but we cannot say there was a substantial variance between the statement of the judge and the evidence.
We discover nothing to correct in the other errors assigned.
Judgment affirmed.