Case Name: David J. Thomas v. The Fame Insurance Company
Court: Illinois Supreme Court
Jurisdiction: Illinois
Decision Date: 1883-11-20
Citations: 108 Ill. 91
Docket Number: 
Parties: David J. Thomas v. The Fame Insurance Company
Judges: 
Reporter: Illinois Reports
Volume: 108
Pages: 91–113

Head Matter:
David J. Thomas v. The Fame Insurance Company
Filed at Ottawa November 20, 1883.
1. Peaotioe—when Appellate Court reverses, hut fails to find facts—■ preswmption. Where the Appellate Court reverses the judgment of a circuit court, but fails to recite in its final order the facts as found by it, it will be presumed that the Appellate Court found the facts the same way as did the trial court, and reversed for some error of law in the proceedings; and in such case, if the record of the trial court fails to show any error as to the law, the judgment of the Appellate Court must be reversed.
2. Amendment—change of parties is not a change of the action. It was evidently the intention of the legislature in adopting the provision in section 24 of the Practice act, that no amendment after the commencement of the suit and before final judgment, resulting merely in a change or substitution of parties to the action, or in a change of the form of the action, should be deemed a change of the action itself. The identity of the cause of the action, in such case, is still preserved.
3. Same—right of defendant to plead limitation after amendment. Where, after the time limited by contract for bringing an action on a policy of insurance, an amendment is allowed, not changing the original cause of action or ground on which a recovery is sought, but merely changing the parties plaintiff by substituting another person as plaintiff, a plea setting up the limitation presents no defence, the suit having originally been commenced within the time limited.
4. But where some new cause of .action has been introduced into a suit by amendment, against which the Statute of Limitations had run before making such amendment, the defendant will be entitled to present the bar of the statute as to such new claim or cause of action. '
5. iNStraANOE—breach of warranty a defence, without showing an increase of rislc. Where an application for insurance provided that the answers to the questions therein propounded should form a part of the contract of insurance, and a warranty on the part of the applicant, and the policy provided that for any misrepresentation or concealment touching the risk it should be void, the company may avail itself of the applicant’s breach of warranty in the description of the property insured, and the survey thereof, without showing, or its otherwise appearing, that the risk was thereby materially affected. If the description was false, it is unimportant whether this was material to the risk or not.
Appeal from the Appellate Court for the First District;— heard in that court on appeal from the Superior Court of Cook county; the Hon. Sidney Smith, Judge, presiding.
Mr. Philip Stein, for the appellant:
The plea of limitation presented no defence. The amendment introduced no new cause of action. It was immaterial to whom the appellee might pay, if liable on the policy.
A warranty in the law of insurance is never created by construction. It must appear in express terms, affirmatory or promissory, or must necessarily result from the nature of the contract. Jefferson Ins. Co. v. Cotheal, 7 Wend. 80; Mutual Benefit Life Ins. Co. v. Robertson, 59 Ill. 123.
Warranties are construed strictly against those for whose benefit they are made, and so, if possible, as to avoid a forfeiture. Hyde v. Bruce, 3 Doug. 213; World Mutual Life D Ins. Co. v. Schultze, 73 Ill. 586; Saylor v. Insurance Co. 2 Curtis’ C. C. 613; Blood v. Howard Fire Ins. Co. 12 Cush. 472; Catlin v. Springfield Fire Ins. Co. 1 Sum. 434; Ripley v. Ætna Ins. Co. 29 Barb. 552; May on Insurance, secs. 162, 171; Flanders on Fire Insurance, (2d ed.) 292; Wood on Fire Insurance, sec. 167; Morse v. Insurance Co. 30 Wis. 540; Carter v. Himboldt Fire Ins. Co. 17 Iowa, 456.
The fact that the application was submitted as a warranty does not make it one, unless the policy adopts the application, by apt and proper language, as a part of the contract, and not always even then. Boardman v. N. H. Mutual Ins. Co. 20 N. H. 551; Owens v. Holland Purchase Ins. Co. 56 N. Y. 565; Hartford Protection Ins. Co. v. Harmer, 2 Ohio St. 461; American Popular Life Ins. Co. v. Day, 39 N. J. 89; Howard Fire and Marine Ins. Co. v. Cornick, 24 Ill. 455 ; Trench v. Chenango Ins. Co. 7 Hill, 122; Farmers’ Ins. Co. v. Snyder, 16 Wend. 481; Wood on Fire Insurance, secs. 138, 144; May on Insurance, sec. 159, et seq.
Although a policy refers to and makes the application a part of it, yet only statements made strictly in answer to the inquiries contained therein can be regarded as warranties. Flanders on Fire Insurance, (2d ed.) 236, 237; Wood on Fire Insurance, secs. 144, 160; Howard Fire and Marine Ins. Co. v. Cornick, 24 Ill. 455; Hartford Protection Ins. Co. v. Harmer, 2 Ohio St. 461.
The description of the risk in the policy is not a warranty. It simply names and identifies the premises. Gerhauser v. North British Ins. Co. 7 Nev. 185 ; Schultz v. Merchants’ Ins. Co. 57 Mo. 331; Browning v. Home Ins. Co. 71 N. Y. 508; Maher v. Hibernian Ins. Co. 6 Hun, 353; Billings v. Tolland Ins. Co. 20.Conn. 139.
Messrs. Geant, Swift & Beady, for the appellee:
By the amendment a different plaintiff sued, but his suit was not brought within one year, and no recovery could be had by the present plaintiff. Dunphy v. Riddle, 86 Ill. 22; Crowl v. Nagle, id. 437; McGraw et al. v. Bayard et al. 96 id. 154; Miller v. McIntyre, 6 Pet. 61; Illinois Central R. R. Co. v. Cobb, 64 Ill. 140; King v. Avery, 37 Ala. (N. S.) 173; Woodward v. Ware, 37 Me. 564.
There was a breach of warranty by the plaintiff, which renders the policy null and void. The answers did not dis close the fact that shingles were made upon the premises, and the diagram was incorrect, and failed to show that part of the building where the shingles were made,- etc. These omissions were fatal to the right of recovery, whether accidental or intentional. De Hahn v. Hartley, 1 Term Rep. 343; Fowler v. Ætna Fire Ins. Co. 6 Cow. *673; Ripley v. Ætna Fire Ins. Co. 30 N. Y. 136; Burritt v. Saratoga County Mutual Fire Ins. Co. 5 Hill, 188; Ætna Ins. Co. v. Grube, 6 Minn. 82; Blumer et al. v. Phoenix Ins. Co. 45 Wis. 622; Dewees v. Manhattan Ins. Co. 34 N. J. 244; Forbush v. Massachusetts Ins. Co. 4 Gray, 337.
Where the application is referred to as forming a part of the contract, the statements therein are held to have the force and effect of warranties. May on Insurance, (2d ed.) sec. 159.
Where parties by express agreement make certain matters inquired into material, it will not be open to question whether or not they were actually so. Williams v. N. E. Mutual Fire Ins. Co. 31 Me. 219; Ripley v. Ætna Ins. Co. 30 N. Y. 136; Gahagan v. Union Mutual Ins. Co. 43 N. H. 176; Commonwealth Ins. Co. v. Monninger, 18 Ind. 352; Abbott v. Shawmut Ins. Co. 3 Allen, 213; Wilson v. Conway Fire Ins. Co. 4 R. I. 141; Dewees v. Manhattan Ins. Co. 34 N. J. 247.
Where the application' is prepared, signed and presented by the owner, the company have a right to rely upon its correctness, and if it is incorrect in any material part, it avoids the policy. Atlantic Ins. Co. v. Wright, 22 Ill. 474; Andes Ins. Co. v. Fish, 71 id. 622; Lycoming Ins. Co. v. Rubin, 79 id. 403; Burritt v. Saratoga County Mutual Fire Ins. Co. 5 Hill, 188; Marshall v. Insurance Co. 7 Foster, 157; Cumberland Valley Mutual Protection Co. v. Schell, 5 Casey, 31; Carpenter v. American Ins. Co. 1 Story, 57; Gould v. York County Mutual Fire Ins. Co. 47 Me. 409.

Opinion:
Mr. Justice Mulkey
delivered the opinion of the Court:
Some time in the month of June, 1875, one T. M. Taylor, a general insurance agent and broker, having an office at Minosha, Wisconsin, called upon David J. Thomas, the appellant, at his place of business in the town of Colby, same State, for the purpose of procuring Thomas' insurance on his factory at that place, Taylor representing at the time that he was the agent of the Fame Insurance Company, the appellee, and other companies, naming them. The interview resulted in appellant giving to Taylor an application for $2000 insurance on the property, to be taken in such of the companies represented by him as he might select. The factory in question was used for the manufacture of clothes-pins, broom-handles and shingles, though there was nothing in the name of the establishment to indicate that shingles were made in it, it being simply called "Clothes-pin and Broom-handle Factory." It appears, though, Taylor was well acquainted with the factory, and knew that one department of it was used for the manufacture of shingles. The application was made out by Taylor on one of the printed forms of the Planters' Insurance Company, and was addressed to the Mercantile Insurance Company of Chicago, and the answers to some of the interrogatories were written down by him from his own knowledge of the business and premises, while the others were given by Thomas himself. The questions in the printed blank, which were answered partly by Taylor and partly by Thomas, as just stated, had the following caption: "The applicant will answer particularly the following questions, and sign the same as descriptive of the premises, and forming a part of the contract of insurance, and a warranty on his part." The questions and answers following this caption, so far as deemed material to the controversy, are as follows:
"I. Name of property.
"A. Clothes-pin and broom-handle factory.
"Building. How long and how wide is it ?
"A. 54x40, two-story; engine-room, 24x36.
"Boiler-house. Where is it located?
"A. West side of building.
" [Show on diagram.]
" What is the precise kind of goods made, and of ivhat material?
"A. Clothes-pins and broom-handles."
Whether the application was either read to or by the appellant previous to his signing or to the issuing of the policy, is a fact not clearly settled by the evidence. While on its face the application contemplates, and in express terms requires, a diagram to be made out as a part of the_ same, showing the size, form, etc., of the building, and its relation to the surrounding property within a hundred and fifty feet distance, yet no such diagram was made out previous to appellant's signing the application, nor did he ever see one till after the policy was issued, though one was prepared and annexed to the application as a part of it, presumably by Taylor, before it was submitted to the company. The diagram, as made out and presented to the .company, fails to truly represent the character, shape or extent of the factory, particularly that part of it which is used for the manufacture of shingles.
The application, with the diagram annexed, being thus prepared, was forwarded to one Eastman, an insurance broker of Chicago, with directions to obtain the required insurance. Eastman submitted the application to Southwick & Berne, who were, respectively, the general insurance agents of appellee and the Empire Fire Insurance Company. Upon a conference between these agents the risk was agreed to be taken and equally divided between the two companies, and policies were issued accordingly. The one issued by appellee (being the same now in suit) was, at the time of its execution, to-wit, on the 26th of June, 1875, delivered by Southwick to Eastman, the former paying to him at the time the customary brokerage fee. Eastman forwarded the policy to Taylor, who subsequently delivered it to the assured. In August following, appellant paid the premium ($50) to Taylor, who forwarded it to Eastman, and the latter paid it to the company. On the 26th of May, 1876, the insured premises were totally destroyed by fire, and the loss was regularly adjusted by the two companies, through Berne, the general agent of the Empire Fire Insurance Company. By the terms of the policy the loss, if any, was made payable to the Mann Brothers, of Milwaukee, as their interest might appear. The appellee having declined to pay the loss, this suit was originally commenced on the 26th of September, 1876, in the name of. appellant, for the use of Joseph and Henry Mann, but appellant's name as plaintiff was subsequently, on the 18th of November following, by permission of the court, stricken out, and the names of the Manns substituted as plaintiffs, and thereafter the suit was prosecuted in their names until the 4th of February, 1881, when, by leave of the court, the name of appellant was restored as plaintiff in the cause, and the records and files in the case were changed accordingly, since which time the cause has proceeded in the name of appellant, for the use of Joseph and Henry Mann, as- originally commenced.
There have been two trials of this case in the Superior Court of Cook county, where the action was commenced, in each of which the plaintiff recovered a judgment for the face of the policy, with legal interest. Both judgments, on appeal to the Appellate Court, were reversed for alleged errors in law, and the cause was remanded for further proceedings in conformity with the views of that court, as expressed in the several opinions filed therein. It appears, however, after the last appeal had been thus disposed of, by a stipulation between the parties it was agreed the remanding order should be stricken out, so that the case might be brought directly to this court for consideration, which was accordingly done, and the case is now here on appeal.
It is claimed by appellant this case is governed by the Peck case, 98 111. 139, and should therefore be reversed, for the reasons stated in that case. This is a. misapprehension. That case holds that where there is a reversal of the judgment of the trial court by the Appellate Court, and the latter court fails to recite the facts as found by it in its final order on appeal to this court, we must assume, by reason of such non-recital of facts, the Appellate Court found the facts the same way as the trial court, and that consequently its reversal, of the judgment of the trial court must háve b'een for some supposed error of law, and if, upon an examination of the record of the trial court, there is in the judgment of this court no such error of law warranting the reversal, as we' found in the Peck case, the judgment of the Appellate Court will be necessarily erroneous, on the ground it reversed for a supposed error of law which had no real existence. So in this case, we must assume, by reason of the non-recital of the facts in the final order of the Appellate Court, that court found the facts the same way as found by the trial court, and must therefore have reversed for some supposed error of law in the proceedings of the trial court. If, upon an examination of'the record by us, we should, as in the Peck case, find no error of law, we should, under the authority of that case, reverse the judgment in this ease. It remains, therefore, to inquire, whether any of the errors relied on for a reversal in the Appellate Court are well founded or not.
In the view we have taken of the case it will not be neces: sary to consider all the questions raised by the assignment of errors in the Appellate and this court. " It is sufficient for present purposes to determine whether, upon any of the errors assigned in that court, the judgment of the trial court was properly reversed.
The policy in this case, like most of policies, contains a clause requiring the action, in case of a loss, to be brought within twelve months after its occurrence. Upon the substitution of Thomas as'plaintiff for the Manns, after the first trial in the Superior Court, the company, proceeding upon the theory this change in the parties was in legal effect a discontinuance of the original suit, by leave of the court filed a special plea setting up the limitation in the policy in bar of the action, the substitution as to parties having been made more than one year after the loss. Whether the above facts relied on in support of the plea constituted a defence to the action, presents a.question which occupies a prominent position in appellee's brief, and the ruling of the trial court upon it was one of the main errors - relied on by the company for a reversal in the Appellate Court, and it is equally relied on here as sustaining the reversal there. We do not think the facts shown in support of the plea sustain it,—or, in other words, we do not think the limitation contained in the policy, under the facts as shown by the record, affords any defence to the action. The 24th section of the Practice act provides: "At any time before final judgment in a civil suit amendments may be allowed on such terms as are just and reasonable, introducing any party necessary to be joined as plaintiff or defendant, changing the form of action, and in any manner, either of form or substance, in any process, pleading or proceeding, which may enable the plaintiff to sustain the action for the claim for which it was intended to be brought, or the defendant to make a legal defence. The adjudication of the court allowing an amendment shall be conclusive evidence of the identity of the action. " In furtherance of the intention of the legislature a very broad and liberal construction has been given to this section. It was evidently the intention of the legislature in adopting this provision, that no amendment after the commencement of the suit and before final judgment, resulting in a change or substitution of par ties to the action or in a change of the form of the action, should be deemed a change of the action itself. (Sidway v. Marshall, 83 Ill. 438 ; Teutonia Life Ins. Co. v. Mueller, 77 id. 22; Dickson v. Chicago, Burlington and Quincy R. R. Co. 81 id. 215; Challenor v. Niles, 78 id. 78.) The only limitation upon the right thus conferred is, that amendments are to be allowed "on such terms as are just and reasonable/' and "to enable the plaintiff to sustain the action for the claim for which it was intended to be brought, or the defendant to make a legal defence. "
There is no just ground for the claim that by reason of the amendment making new parties plaintiff there resulted any change in the cause of action. The object of the suit after the amendment was precisely the same as it was before, namely, to recover the amount of the policy on account of the destruction by fire of the insured premises, and so far as we can see, assuming there was a right of recovery at all, it was and is a matter of total indifference to the company whether the recovery is in the names of the Manns or in the name of Thomas for their use. Had some new claim or cause of action been introduced into the suit by the amendment, against which the Statute of Limitations had run, or before the making of such amendment, the position of appellee would-be clearly right; but such is not the ease. By the express terms of the statute the allowance of the amendment is made conclusive of the identity of the action. If, then, both the action and cause of action, before and after the amendment, were precisely the same, as they certainly were, then the limitation of one year in the policy clearly presented no defence to the action, as it is conceded the original action was commenced within the year.
As already appears from the caption of the application, appellant was required to answer, specifically, certain questions, "and sign the sanie as descriptive of the premises, and forming a part of the contract of insurance, and a warranty on his part. " In addition to this the policy itself contained, among others, the following provisions:
"Applications for insurance on property must be in writing, and must specify the construction and materials of the building to be insured,- by whom occupied, whether as a private dwelling, or how otherwise, its situation with respect to contiguous buildings, and their construction and materials, and whether any manufacturing is carried on within or about it; * '*' * and such survey and description shall be taken and deemed to be a part and portion of the policy issued thereon, and a warranty on the part of the insured.
"If any person effecting insurance in this company shall make any misrepresentation or concealment touching the risk to be assumed, this policy shall be void. "
In view of these provisions in the application and policy, and the additional fact that appellant, in answer to the question in the application, "What is the precise kind of goods made, and what material?" failed to make known that one part of the building was used for the manufacture, of shingles, the trial court was asked by the company to give to the jury the following instruction:
"If the jury believe, from the evidence,'that there was a shingle mill connected with the premises insured, and that this fact was not disclosed by the application upon which the policy in suit issued, and was not known to the defendant at the time the policy was issued, or - at any time before the fire, then the plaintiff can not recover. "
—Which the court refused to do, but gave as a substitute for it the following modified instruction:
"If the jury believe, from the evidence, that there was a shingle mill connected with the premises insured at the time the application was signed by plaintiff, and that this fact was not disclosed by the application upon which the policy in suit issued, and was not known to the defendant or its agents at the time the policy was issued, or at any time before the fire, ancl that the existence and use of said shingle mill materially affected the risk under said policy, and if the jury further believe, from the testimony in this cause, that the plaintiff, ' Thomas, or his agent, intentionally suppressed from his xoritten application the fact of the existence and use of said shingle mill, knowing it to be material to said risk, then the plaintiff can not recover."
<3
—To the giving of which, as modified, the company at the time excepted. The additions and modifications made by the court to the instruction as asked, are for convenience put in italics.
The instruction as modified we regard as-clearly erroneous. It ignores altogether the fact that the answers of the assured to the specific interrogatories contained in the application are therein declared to be made and signed %"as descriptive of the premises, and forming a part of the contract of insurance, and a warranty" on the part of the assured. It also leaves out of the question altogether the diagram or survey accompanying the application, which, as we have already seen, fails to truly represent the insured premises, especially the part of them used for the manufacture of shingles, although the policy in express terms declares "such survey and description shall be taken and deemed to be a part and portion of the policy issued thereony and a wairanty on the part of the assured." The survey and description of .the property being thus made an express warranty by the assured, if false it was wholly unimportant whether they were material to the risk. Nevertheless, the jury were told by this instruction, before the company could avail itself of the defence afforded by the plaintiff's breach of the warranty it was incumbent on the company to show, or for it to otherwise appear from the evidence, the risk was thereby materially affected. This view is certainly opposed to the general -current of authority on the subject, and it can not, therefore, receive our sanction. Columbia Ins. Co. v. Cooper, 50 Pa. St. 331; Denny v. Conway Ins. Co. 13 Gray, 492; Jefferson Ins. Co. v. Cotheal, 7 Wend. 72; Wall v. Howard Ins. Co. 14 Barb. 383; Sheldon v. Hartford Ins. Co. 22 Conn. 235; Commonwealth Ins. Co. v. Monninger, 18 Ind. 352; Barteau v. Phoenix Ins. Co. 67 N. Y. 595; Newcastle Ins. Co. v. McMorran, 3 Dowl. P. C. 225; Styles v. Northwestern Ins. Co. 2 Curt. 610; Wetherell v. Maine Ins. Co. 49 Maine, 200; Anderson v. Fitzgerald, 4 H. L. Cases, 484; Andes Ins. Co. v. Fish, 71 Ill. 620.
The giving of this instruction being a material error upon a vital point in the case, fully warranted the Appellate Court in reversing the judgment of the trial court as it did.
Judgment affirmed.