Court Opinion

ID: 3846388
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:20:36.181139+00
Date Added: 2024-06-11T09:26:02.111247
License: Public Domain

In my opinion the construction placed by the learned court below on the contract of insurance here involved is manifestly correct. The insured's prior erroneous monthly reports of the value of his goods at the location covered by the policy may, for the purposes of this case, be readily assumed to have been the result of a scrupulously honest mistake of fact and, yet, after the occurrence of the loss by fire, the extent of such loss recoverable under the terms of the policy is to be determined on the basis of the insured's "last report of values, filed prior to the loss". That is what the policy expressly provides. In short, the rights and liabilities of the parties to the contract were to become static upon the happening of the contingency insured against. Such is not only the implicit intendment of the policy's relevant terms but it is also the rule of contract law otherwise applicable to the undisputed circumstances.
Obviously, therefore, no justifiable purpose is to be served by sending the case back for the trial of an immaterial issue of fact. Plainly enough, there will be marked hardship in subjecting the non-offending party to the hazard of an unnecessary trial simply because of what, at best, was a serious and harmful mistake on *Page 493 
the part of the insured. On the other hand, if the insured's prior erroneous reports of value were, in truth, the result of a bona fide mistake, he is not without an appropriate and adequate remedy. He may sue to reform such reports on the ground of mistake and, upon obtaining relief in such regard to the extent that a chancellor deems him entitled under the evidence, may thereafter claim loss, accordingly, under the policy. He would also be rightly required in the reformation suit, as a proper condition to the correction of the reports, to make good the deficiencies in past premiums which so far he had been able to escape because of his mistake.
What the ruling of the majority means is that in every such "open liability" policy, as here, the insured may always file after the occurrence of a loss a new and enlarged report of value and thus increase the amount of his insurance coverageafter the loss. All that any insured would need do to secure that unusual and startling right would be to withhold the filing of the successive monthly reports contemplated by the contract until the last day of the thirty-day period following the last day of each month. In that way, a report would always be due for filing even though a loss had occurred in the meantime. It requires little or no imagination to realize that judicial authentication of such a situation will be an open invitation to fraud which may be freely practiced wherever such an insurance policy as the present exists and a loss by fire occurs. As Judge McNAUGHER cogently stated for the court below, "To hold that the parties intended that an insured might defraud the company in premium payments and then, after a loss took place, set up a very much larger value than in the last report before the loss would be a wholly unreasonable construction of the language used". And, it may be added that the construction is directly contrary to the provisions of the contract as well.
I should unhesitatingly affirm the judgment of the court below. *Page 494