Commonwealth v. Mechanics' Mutual Fire Insurance , 120 Mass. 495 ( 1876 )

Ames, J.

The petitioner, with full knowledge of the fact that the insurance company had suffered heavily by the fire, came to the conclusion to accept the new policies which had been prepared for him upon his application, upon or before the first day of the previous October. The meaning of his application was that he desired to renew and continue his former insurance. After making such inquiry as he saw fit, he paid the premiums and gave the deposit notes dated October 1, 1872, and accepted the policies of the same date. The effect of this arrangement, primd facie, and if not explained or rebutted, would be that he fully consented to stand in the same relation to the company as if the entire transaction had occurred upon the day of the date of the policies and the notes. His membership necessarily carried with it the contingent liability to assessment, and he must be considered as consenting that his membership should date back to that day. It was not an application for new or original insurance, beginning then for the first time, but was for continuous insurance to take effect from the expiration of his previous policies. It is true that his new policies were not literally outstanding at the date of the assessment, but he had at least applied for them. The agreement, that, when they were delivered to him, they should be considered as taking effect from their date, and should be treated as if they had been delivered at their date, was one which he had a perfect right to make. It was a necessary result or incident of such agreement, that the policies so accepted should be included in the assessment made subsequently to that date.

It is true that in accepting the policies he acted upon such information as he had obtained from the secretary of the company. But it is not charged that in giving such information the secretary was guilty of any intentional or fraudulent misrepresentation. We find nothing in the facts reported that amounts to constructive fraud, or fraud as matter of law. He merely expressed his opinion or belief that the company would be able to go on with its business, was sound and had a large surplus. However mistaken this belief has proved to be, we see no ground for holding that it was utterly without foundation, or was a belief which a slight examination would immediately have corrected. Western Bank of Scotland v. Addie, L. R. 1 H. L. Sc. 145. It had none of the qualities of a warranty. It was not the assertion of a matter of fact, and did not purport to be anything more than the expression of an expectation or probability. A mere estimate of this sort made in good faith is not such a representation of a matter of fact as to give the petitioner any valid claim against the receivers. See Leather v. Simpson, L. R. 11 Eq. 398. Decree affirmed.