Court Opinion

ID: 4933643
Source: CourtListenerOpinion
Date Created: 2021-09-24 01:11:31.162485+00
Date Added: 2024-06-11T08:14:35.008899
License: Public Domain

Barrows, J.
A failure in the haste of a nisi prius trial to recognize the exact character of the change in the law of insurance (as heretofore laid down in numerous cases,) which has been wrought by our statutes, will make a new .trial necessary here, though it is probable that upon the same testimony the verdict would have been the same had the jury been left to pass upon the precise questions which the statutes make the vital ones for their determination.
One of the defenses relied on was an over-statement of the value of the insured premises to defendants’ agent by plaintiff’s agent in procuring the policy; but this, the statute declares, “shall not prevent his recovering on his policy unless the jury find that the difference between the property as described and as it really existed contributed to the loss or materially increased the risk.” These are the only inquiries which are pertinent where the 'defense is an alleged erroneous statement of value. And while it is not easy to imagine any set of circumstances where the difference between the over-statement and the correct valuation could contribute to the. loss or materially increase the risk unless the overstatement was fraudulently made, still, the question is made by the statute a question for thé jury, and not for the court. Materially increasing the risk means here increasing the hazard of loss, and has nothing to do with inducing the insurance company to enter into the contract.
The defendants’ counsel in his request for instructions on this point, and the presiding judge in the instruction given, both seem to have had in their minds the effect under the statute of a misrepresentation of the title or interest of the insured which the *537statute says shall not prevent his recovering on his policy to the extent of his insurable interest unless material or fraudulent. These are inquiries which would have been pertinent here if defendant had made any question as to the effect of two small mortgages upon the property, bnt it was expressly admitted that “plaintiff owned the property insured.” Misrepresentations as to title, although classed with those as to value in one clause, are made the subject of another provision the effect of which will have to be determined when there is a question as to such misrepresentations. But no such question is made here.
Defendants’ counsel combined and confounded in his request for instructions a material increase of the risk (an increased hazard of loss) with an inducement which might be supposed to have operated on the defendants in writing the policy. But under our statute the law does not trouble itself to inquire as to the effect of an overvaluation in inducing the defendants to write the policy. The inquiry is only whether it contributed to the loss or materially increased the risk. The defendants cannot complain of the refusal. They introduced into their request an element which has no pertinency to the inquiry and would tend to lead the jury to suppose that although the difference between the property as represented and as it actually existed did not contribute to the loss nor materially increase the hazard of loss, yet if it was material in tlio judgment of the insurer and induced him to take the risk, that was tantamount to a material increase of the risk and ■would avoid the policy. This was not so, and no such idea should be conveyed to the jury, directly or indirectly.
But while the presiding judge was right in refusing to instruct as requested, he seems to have gone so far as to prohibit the jury from finding that the overvaluation contributed to the loss or materially increased the risk, unless they also found that the misrepresentation was fraudulently made.
If this was the only objection to the instructions it might perhaps be worth while to consider whether upon the testimony here presented the defendants were injured by tbe ruling; whether upon a different one, presenting the issue defined by the statute, they could have expected a different result, especially as the errors. *538seem to have originated with allowing the defendants to put in testimony which ought not to have been received against the plaintiff’s objection, as we shall have occasion hereafter to observe.
But the other defense was that at the time of the fire the buildings were unoccupied and that this fact, which was conceded, avoided the policy which contained a stipulation to that effect.
Now, as to this, the statute says that a change in the property insured, its use or occupation, or a breach of any of the terms of the policy by the insured shall not affect the policy unless they materially increase the risk. A change from occupancy to disuse of a building insured is a change in the use and occupation within the meaning of this provision. Cannell v. Phoenix Ins. Co., 59 Maine, 582. The defendant had a right to have the jury determine whether the fact that the premises had ceased to be occupied had materially increased the risk, but the instructions given took this question away from the jury and affirmed the right of the plaintiff to recover notwithstanding the stipulation in the policy if the building had been vacated by tenants and other tenants were being sought for. The instruction is colorably supported by Gamwell v. Merch. & Farm. Cush. 167. But it does not appear that the policy there contained the same direct and specific stipulation as to the effect of vacating the premises; and, if it did, the decision would still be obsolete under a statute provision like ours, and herein it resembles the greater part of those cited in the elaborate argument of defendants’ counsel — good authorities doubtless for the doctrines for which he contends, in the absence of such statutory provisions, but not available to counteract those provisions.
The inquiry is not now whether the insurers regard the difference in the property as represented and as it really exists as material to the risk, or whether they were induced by the erroneous representation to enter into the contract. The statute presupposes' that their local agents will do their fair duty in ascertaining the value and situation of the property, and refuses to allow them to set up an erroneous statement of this sort as a valid defense unless the jury find it contributed to the loss or materially increased the risk.
*539This is sufficient to dispose of the motion to set aside the verdict as against evidence. There is no testimony which was legally admissible which would imperatively require the jury to find that the difference between the property as represented and as existing contributed to the loss or materially increased the risk.
The defendants were permitted to put in the daily report of their own agent which had no legitimate bearing on these or any other question arising in the case and should have been rejected. If this report could be regarded as the application for insurance, the statute would make it conclusive against the defendants upon the question of value, for it was written by their agent whose name was borne on the policy. K. S., c. 4-9, § 18.
As it cannot be technically so regarded there is no purpose for which the defendants could offer it that it can legitimately subserve.
The testimony of Sabine as an expert in insurance business was also incompetent. This has been settled by repeated decisions in this state and elsewhere. In Malloy v. Mohawk Valley Ins. Co., 5 Gray, 545, Bigelow, J., says that “the ruling of the court rejecting the evidence of certain officers and agents of insurance companies in Boston, offered as experts to prove that the failure of the applicant and his men or any one else to occupy the said building for lodging increased the risk and was material thereto, was clearly right.” The case is direct to the point as stated in the syllabus that the evidence of experts is not competent to show that the risk of fire is greater in unoccupied buildings.
See also Jefferson Ins. Co. v. Cotheal, 7 Wend. 73. Joyce v. Maine Ins. Co., 45 Maine, 168. Cannell v. Phoenix Ins. Co., 59 Maine, 582. State v. Watson, 65 Maine, 74, 76, 77.
We have, then, the simple facts that the plaintiff, a woman, estimating the value of her buildings at $3000 asked a friend to get insurance on them to that amount; that the man who did the errand, and who may have answered the insurance agent’s question upon a rough estimation of the value from the outside appearance, stated their value at $5000 and got $2500 insurance; that their actual value was not more than $2200 or $2300.
Under the circumstances, when the over-insurance was so small *540and the amount of insurance obtained was less than the value as estimated by the owner, we cannot say that it is conclusively demonstrated that the overvaluation contributed to the loss or materially increased the risk. It was for the jury to say, and but for the misdirection which may have prevented their passing upon it with the clear understanding that it was a vital question for them to decide, no new trial would be necessary.
Upon the exceptions as made up and allowed, the entry must be,

Exceptions sustained.

Appleton, C. J., Danforth, Virgin, Peters and Symonds, JJ., concurred.