Court Opinion

ID: 7193295
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:59:33.944793+00
Date Added: 2024-06-11T16:16:13.993715
License: Public Domain

Oh Rehearing.
Manning, J.
There can be no doubt that Pómez could have insured the property of his minor child, of whom he was the natural tutor. Our law compels him to insure wli#n the property is a house in New Orleans, as was this, and imposes upon him responsibility for failing to insure. Rev. Ci. Code, art. 355. If he had taken the policy, one-eighth for himself and seven-eighths as tutor, no valid objection could have been made.
It has been strenuously urged that the concealment of his child’s interest was not material, and a number of decisions and many texts from the books have been cited to shew, if the true ownership would not have enhanced the premium, then the concealment or misrepresentation is not fatal to the policy. Indeed in the case cited by us from 2 Peters when it went up again, it was said; — whenever the nature of the interest would or might have a real influence upon the underwriter, either not to insure at all or not to undertake the risk except at a higher rate, it must be deemed material and the concealment or misrepresentation of it will avoid the policy. And the decisive test of the materiality of the concealment or misrepresentation was there said to be to ascertain whether if the true ownership had been known, it would have enhanced the premium. If it would, then the concealment or misrepresentation would be fatal to the policy. Columbia Ins. Co. v. Lawrence, 10 Pet. 516.
The converse of this ought to be equally true, viz that when knowledge of the true ownership of the property would not have enhanced the premium or have deterred the underwriter from taking the risk at all, then the concealment or misrepresentation is not fatal to the policy.
But this case is not governed by the law concerning representations of interest. There was an express stipulation in this policy that whenever the insured is not full owner of the property insured he must disclose the nature of his insurable interest and have it inserted in the *665policy, and if he does not, the insurance shall be null and void. This was a condition of the contract to which he assented, and thereby warranted that he was full owner. Now a representation is not like a warranty. A representation must be shewn to be false in a material point or it will not make void the policy, while a warranty must be strictly complied with. Marshall on Insurance, 335. The rule seems to be inexorable that a failure to set forth truly the title will avoid the policy, whether the failure resulted from design or mistake, whenever the policy requires the real title to be stated. Wood on Ins. §§ 202, 218. Such requirement is a vital part of the contract, and a non-compliance with it forfeits all rights under the contract. Palmer v. Fact. & Trad. Ins. Co. 33 Ann. 1336 and authorities there cited on p. 1340. But unless the true ownership or interest in the property is required by the conditions of the policy to be specifically and particularly and accurately set forth, it will be in general sufficient if the insured has an insurable interest under any status of ownership or possession, in cases where no inquiries are made at the time the application is presented or the policy executed. Ins. Co. v. Haven, 5 Otto, 242; May Ins. § 284; Wood on Ins. 398.
So that in the absence of any condition in the contract requiring the insured to state his interest, it will be sufficient if he have an insurable interest, but otherwise if the policy requires the real title to be stated. Wood on Ins. § 202. And this is not an infringement of the doctrine broadly announced that a person who has the care, custody, or possession of property for another may insure it in his own name although he has no pecuniary interest therein, and the insurance will enure to the benefit of the owner. Ibid. §§ 278-9, 284. For that has application and relevance to cases wherein rules are formulated to define what is an insurable interest. The fact that one has possession, exclusive as to all but the owner, and therefore a right to protect the property from loss, gives him the right to insure, and so Pómez who had this possession and the right consequent thereon, with the duty superadded of insuring, could unquestionably insure, but in making his contract he ignorantly and unwittingly assented to and came under the dominion of a condition which struck his insurance with absolute nullity because he did not state and set forth the real title to the property.
It is a hard case, but courts must enforce contracts, and those who make them should look to the conditions of them before they bind themselves.
Our former decree must remain undisturbed.