Hilton v. Phoenix Assurance Co.

Savage, J.

Action on policy of fire insurance, dated September 4, 1889. Tbe case comes to us on report. It is conceded that the policy was issued and the premium paid, and that the property was destroyed by fire September 1, 1892, within the life of the policy. The policy covered two sets of buildings, and other property. The property burned with the insurance upon it is described in the policy as follows: “$800 on frame dwelling-house and L; $700 on frame barn situate about 100 feet from said dwelling, and $200 on hay therein; situate in School District No. 6, Wells, Me., and also occupied by insured.” In a previous part of the policy, another dwelling-house, also insured, was described as “ occupied by assured as a residence.”

The dwelling-house burned was unoccupied at the time the policy was issued, and remained unoccupied as a residence ever after. The barn during the life of the policy was used only for storing tools and hay. The policy was procured- of defendant’s agent at Kittery, by one Plaisted, a broker, who acted as agent for the plaintiff. October 22, 1892, the plaintiff furnished to the defendant a written proof of loss signed and sworn to by him, in which he stated that his loss on the house was $1700, on the barn $1100, and on hay $75; also, that the buildings were occupied at the time of the fire, “by the assured as a residence and for his his stock of cattle, hay, etc.” November 19, 1892, the defendant, by letter, acknowledged the receipt of the proof of loss, but also stated “ that such alleged proof of loss is not accepted or recognized by this company as evidence of a claim under said policy, nor if the property mentioned therein has been burned, does this company recognize or admit any liability therefor.” In the same letter, the defendant also said, “Would state in explanation of above, that notwithstanding your statement that the house was occupied by" you as a residence, we have, we think, good evidence that it was unoccupied at least sixty days previous to the fire. If you will read the conditions of your policy, you will find that makes it null and void.” June 12, 1893, the plaintiff gave the defendant notice in writing, under oath, that the statement in the proof that the house was occupied by him as a residence was a mistake made by the person who prepared the proof of loss, and asked that the correction might be made a part of the original proof of loss. The plaintiff also stated that “the dwelling-house at the time of the fire was occupied by me not as a residence, but as occasion might require my attendance at the farm upon which the buildings were situated, no person at the time of said fire living therein, the furniture therein being such as I used when I stopped upon said farm.” No reply was made by the defendant.

The defendant sets up non-occupancy as one ground of defense, and relies upon a condition in the policy which provided that it should be void if there was any false representation by the assured of the condition, situation or occupancy of the property, or any omission to make known every fact material to the risk, or if the premises should become vacant or unoccupied. So far as the last clause of this condition is concerned, it cannot be said that the house became unoccupied, because it is undisputed that it was unoccupied when the policy was issued. There was no material increase of risk on this ground.

But the defendant contends that the house was insured as an occupied house, that it was so described in the policy, that the proper signification to be attached to the word “ occupied ” in the policy is “ occupied as a residence.” The defendant insists that it had no knowledge that the house was unoccupied, and that the policy was procured by the false representations of the plaintiff or his agent. On the other hand, the plaintiff says that the fact of non-occupancy was well known to the defendant’s agent who issued the policy; and that by force of the statute, B. S., ch. 49, § 90, the knowledge of the agent must be held to be the knowledge of the company, and all omissions and misdescriptions known to the agent must be regarded as waived by the company.

The defendant’s agent is a witness, and he testifies that he understood from the plaintiff’s agent that all the premises covered by the policy were occupied, although he admits that something was said about one of the houses being unoccupied for a portion of the time, “simply temporarily,” but not for any special length of time. Further on he testifies that he understood the house was occupied as a residence. Though he admits that he understood one of the houses was to be unoccupied part of the time, he says he can give no reason why it was not so stated in the policy. In reply to a question, to what extent the house was to be unoccupied, he replies: “ I don’t know as I can quite, recall as to the time; there was something said about his work, whether it was for haying, or whether it was to be occupied for haying time only, or all except haying time, I can’t say, but there was some question in regard to it which as I have already said that was to be unoccupied; the understanding was one of the houses was to be unoccupied temporarily.” This testimony was given about eight years after the event, which of itself may afford some reason for want of a definite recollection. If, as he suggests it may have been, it was to be “ occupied for haying time only,” this would not be wholly unlike the claim of the plaintiff, that it was occupied only as occasion might require his attendance at the farm. However this may be, on September 5, 1889, the very next day after the date of the policy, in a letter in which he enclosed the policy to Mr. Plaisted, the defendant’s agent said, “You will observe I have written it all in one policy, and at the same rate. Ordinarily we do not care for unoccupied buildings at any rate, but I’ve no doubt this is O. K., hence I have tried to do the best I could for your client. Better hold the policy for a few days to see if the-company kicks on it.” This letter was written while the matter was fresh in the recollection and understanding of the writer. There is no suggestion in it of temporary non-occupancy. It is evident that the writer had in mind two sets of buildings, one occupied, the other unoccupied. He has put them both into one policy, at the same rate, doing the “best” he could for Mr. Plaisted’s client. He seems to have doubted whether this would be acceptable to his company, for he advises Plaisted to “ hold the policy for a few days to see if the company kicks on it.” This agent in his testimony explained that this last clause in his letter had reference to its being a “farm risk,” but we think that, taking the letter as a whole, it appears clearly that he feared the company might “kick ” on the fact of non-occupancy. There is much more ground for saying that this defendant was deceived by its agent, than there is that the agent was deceived by the plaintiff or Plaisted. Though he had never seen the plaintiff or the premises, the agent reported to his company, September 4, 1889, that he had personally examined the premises “ a few days since.” He seems to have been anxious to have the policy issued, and, perhaps, to receive his compensation.

We must hold that this agent’s knowledge was, in law, the knowledge of the defendant. Day v. Dwelling-House Ins. Co., 81 Maine, 244, and' that the policy was not void by reason of false representations respecting occupancy.

The defendant contends in the next place that the plaintiff must fail because his proof of loss was not accompanied by the certificate of a magistrate or a notary public nearest the place of fire, as required by the policy, nor by such a certificate as is required by statute, R. S., ch. 49, § 20. The plaintiff strictly complied with neither requirement. His proof was sworn to, and he furnished the certificate of a deputy sheriff. But the proof of loss, such as it was, was received by the defendant. No objection was made for any want of form or omission of certificate. The defendant did specify other matter as a reason why it refused to recognize the proof, or its liability, namely, non-occupancy. We think these facts, without further explanation, afford sufficient evidence of a waiver on the part of the defendant, of informalities or omissions in the proof of loss. Bailey v. Hope Ins. Co., 56 Maine, 474; Patterson v. Triumph Ins. Co., 64 Maine, 500; Biddeford Savings Bank v. Dwelling-House Ins. Co., 81 Maine, 566.

The policy provides that “ all fraud or attempt at fraud, by false swearing or otherwise shall cause a forfeiture of all claim on this company under this policy.” The defendant urges that the plaintiff in his proof of loss has sworn falsely, both as to the occupancy of the house, and the amount of his loss; and that a recovery should be barred thereby. It is not enough in this respect that the plaintiff’s statements in his proof should be shown to be untrue, but they must be shown to.be knowingly and intentionally untrue. Dolloff v. Phœnix Ins. Co., 82 Maine, 266; Atherton v. British America Assurance Co., 91 Maine, 289.

If the plaintiff understood, and we think he did, that the house was insured as unoccupied, we can see no good reason why he should intentionally misrepresent the fact of non-occupancy, particularly when the falsehood was certain to be detected upon the slightest inquiry. The plaintiff can neither read nor write. He testifies that the mistake was that of the person who made up the proof of loss. He corrected the mistake long before this action was brought. In the absence of any evidence that the company was prejudiced by the misstatement, we think it ought not to operate as a forfeiture.

That the plaintiff overestimated his loss, we think is true. The defendant does not claim that he misstated the items of property destroyed, the house, the barn, the hay, or their condition and situation, but that he knowingly overestimated their value and his loss, in making his sworn proof of loss. To knowingly and intentionally overestimate a loss, either in items or amount, is a fraud, but like all other frauds it must be proved. It cannot be presumed or surmised. A misstatement honestly made, or a mistake of judgment or memory differs from one which is knowingly and intentionally false. Linscott v. Orient Ins. Co., 88 Maine, 497. The latter is fraudulent, the former not. A careful examination of the evidence fails to satisfy us that the fraudulent element has been proved in this case.

Preparatory to making his proof of loss, the plaintiff procured estimates from carpenters of what it would cost to replace the burned buildings with new ones, and he made his proofs in accordance with those estimates. He seems to have assumed that he was entitled to have money enough to replace the buildings so far, at least, as the insurance would do it. This was error, but not so uncommon an error in the practical.affairs of life as to justify us in saying that the mere fact that the owner has committed such an error is sufficient evidence of intentional false swearing. Williams v. Phœnix Fire Ins. Co., 61 Maine, 67.

It remains for us to estimate the amount of the plaintiff’s loss. This is a question which should have been submitted to a jury. The evidence necessarily consists of the opinions of witnesses. Very much depends upon their intelligence and credibility, and glean as well as we may from the cold printed page, we cannot be sure that we are able to distinguish those to whom most credit should be given. A jury seeing and hearing them could judge better than we. The witnesses estimate the loss all the way from $1700 for the house, and $1100 for the barn, (which is the same as claimed by the plaintiff in his proof of loss,) to $600 for both buildings. The higher estimates are clearly made on a wrong basis,— what it would cost to replace the burned buildings with new ones. The policy is a contract of indemnity merely. Donnell v. Donnell, 86 Maine, 518. The plaintiff is entitled only to have his actual loss made good. The true measure of damages is the value of the buildings themselves, as théy stood upon the land just before the fire. 2 Sedgwick on Damages, § 722. These buildings, though apparently in a fair state of repair, were old, some of them very old. They were no longer in use, but we cannot assume that they were useless. Upon the whole, it is the opinion of the court that the plaintiff should be allowed to recover eight hundred dollars for the loss of his buildings. He also lost five tons of hay, for which he should be allowed sixty dollars. The policy provides that payment shall be made within sixty days'after due notice and proof of loss shall have been made by the assured. We think the plaintiff should recover interest after sixty days from the time he corrected his proof of loss, which was June 12, 1898.

Judgment for plaintiff for $860, and interest from August 11, 1893.