Court Opinion

ID: 6820236
Source: CourtListenerOpinion
Date Created: 2022-07-23 19:06:18.181253+00
Date Added: 2024-06-11T16:04:05.876907
License: Public Domain

Hudgins, J.,
dissenting.
I do not think that a mere failure of an insured voluntarily to inform the insurer, at the time he makes a verbal application for an insurance contract, that, prior to the date of the application, a notice of sale under deed of trust had been given and withdrawn is alone sufficient to avoid payment of the policy in case the property is destroyed by fire.
In maritime insurance any omission to communicate a material fact which insured is under an obligation to disclose will vitiate the policy. This is true even though there may have been no intent to deceive and the omission may have been unintentional or with the belief that the fact is immaterial. “The English and Canadian courts apparently have extended this doctrine generally to insurance upon risks of all natures, but in the United States, the trend of the later decisions as to other than marine risks, notably with reference to fire and life insurance is to require that the nondisclosure of a fact which is not inquired about shall be fraudulent in order that it shall vitiate the policy, * * * .
“Ordinarily in the absence of fraud, a failure of insured to disclose a fact with reference to which no questions are asked is not such a concealment as will avoid a policy, * * * .” 32 C. J. 1271, 1272.
“The better view, * * * , would seem to be that where no inquiries are made, a concealment must be with fraudulent intent, but that intent is immaterial where the concealment relates to a matter with reference to which inquiry is made.” 14 R. C. L. 1025.
In other words, the well-settled rule is that failure of the insured to disclose a fact, though material to the risk, will not avoid a fire or a life policy unless such nondisclosure was fraudulent.
The evidence in this case is that the insured informed the insurer that there was an encumbrance on the property. No other information was sought from the insured before the contract was consummated and the policy delivered. The average policyholder does not know whether the fact that his property at his request has been withdrawn from *455a forced sale under a deed of trust is material to the risk. Every suspicious circumstance mentioned in the majority opinion is decided in behalf of the insured. The decision is made to turn on the single fact that the accused did not disclose to the insurer that at some time prior to the date of the contract his property had been advertised for sale and the contemplated sale withdrawn at his request. The rule announced is in effect applying the rule of maritime insurance law to a fire policy. This, in my opinion, is against the settled principle which should control.