There is no principle of law or of equity by which a mortgagee
has a right to claim the benefit of a policy underwritten for the
mortgagor on the mortgaged property in case of loss by fire. It is
not attached or an incident to his mortgage. It is strictly a
personal contract for the benefit of the mortgagor, to which the
mortgagee has no more title than any other creditor.
The mortgagee of property insured against loss by fire is a
competent witness in an action against the insurers to recover a
loss alleged to have been sustained by the destruction of the
property insured.
One of the fundamental rules of an insurance company insuring
against loss by fire provided that any persons insured sustaining a
loss by fire
"shall, as soon as possible thereafter, deliver in as particular
an account of their loss or damage, signed with their own hands, as
the nature of the case will admit of, and make proof . . . and
shall procure a certificate under the hand of a magistrate . . .
not concerned in such loss . . . importing that they are acquainted
with the character and circumstances of the persons insured . . .
and until such affidavit and certificate are produced, the loss
claimed shall not be payable. . . ."
Held that the words "as soon as possible" cannot be
drawn down to fix the construction of the clause respecting the
certificate. The true intent and meaning of it is that the
certificate must be procured within a reasonable time after the
loss. It would be a most inconvenient course to adopt a different
construction not required by the terms of the clause or the
context, as it would make the material inquiry not the production
of the certificate, but the possible diligence in proving it. The
assured is not entitled to receive or to sue for the loss until the
certificate is obtained, for it is a condition precedent to his
right of action. The language is, "and until such affidavit and
certificate are produced, the loss claimed shall not be payable."
And besides, in the body of the policy it is expressly provided
"such loss and damage as the assured shall be entitled to
receive by virtue of the policy shall be paid within sixty days
after notice and proof thereof made by the assured, in conformity
to the conditions of the company subjoined to the policy."
So that it is manifest that the assured could not be entitled to
maintain any action until he had furnished all the preliminary
proofs, so that the delay is not injurious to the company, but
solely to the assured by depriving him of his right to judgment
until it is procured.
In a former action against the same company by the same
plaintiff on the same policy of insurance, "a certificate,"
intended to be a compliance with the requirements of the ninth
fundamental article in the policy, was left with the insurance
company by the assured, and no objection was made to it at the time
it was delivered or until after suit brought on the policy and the
case was on trial before a jury. Upon a writ of error, the judgment
of the court below was reversed for error in the instructions given
by the circuit court to the jury, on the trial. The plaintiffs, on
the mandate of the Supreme Court ordering a
venire facias de
novo
Page 35 U. S. 508
coming into the circuit court, discontinued the suit. They
immediately procured and presented to the insurance company another
certificate in precise conformity with the requirements of the
article. The court was of opinion that under all these facts and
circumstances, the nonproduction of the certificate at an earlier
period was fully accounted for and that the proper certificate was
procured within a reasonable time. The first certificate was
procured shortly after the loss and presented to the company, which
then made no objection to it. The objection to it was first taken
at the trial in the circuit court in the former suit. The court was
then of opinion that the previous conduct of the company amounted
to evidence proper to be left with the jury of a waiver of any
objection to the certificate. The court reversed the judgment on
that point, and almost contemporaneously with the annunciation of
that decision, the new certificate was obtained. The nonproduction,
then, of the proper certificate was occasioned not by any laches
properly imputable to the party, but by the omission of the company
to give notice of the defect and of the mistaken confidence placed
by the party in the company itself.
The decision of this Court in the case of
Lawrence
v. Columbia Insurance Company, 2 Pet. 47, referred
to, and the principles laid down in that case relative to
representations by the assured to the assurers, reaffirmed.
Whenever the nature of the interest of the assured would have or
might have a real influence upon the underwriter either not to
underwrite at all or not to underwrite except at a higher premium,
it must be deemed material to the risk, and if so, the
misrepresentation or concealment of it will avoid the policy. One
of the tests, and certainly a decisive test whether a
misrepresentation or concealment is material to the risk, is to
ascertain whether, if the true state of the property or title had
been known, it would have enhanced the premium. If it would, then
the misrepresentation or concealment is fatal to the policy.
In relation to insurance against fire on land, the doctrine
seems to have prevailed, for a great length of time, that they
cover losses occasioned by the mere fault and negligence of the
assured and his servants, unaffected by any fraud or design.
A loss by fire occasioned by the mere fault and negligence of
the assured or his servants or agents, and without fraud or design,
is a loss within the policy upon the general ground that the fire
is the proximate cause of the loss and also upon the ground that
the express exceptions in policies against fire leave this within
the scope of the general terms of such policies.
The decision of this Court in
27 U. S. 2 Pet.
26,
27 U. S. 53,
27 U. S. 56, as
to the effect of a misdescription of property insured on the
liability of insurers against loss by fire reaffirmed.
At January term, 1829, a suit between the same parties was
before this Court on a writ of error.
27
U. S. 2 Pet. 25. It was an action instituted by
Lawrence, the survivor of Lawrence and Poindexter, on a policy of
insurance against fire to recover from the Columbia Insurance
Company of Alexandria the amount of a loss sustained by them by the
destruction of a mill by fire, alleged to have been duly insured by
the defendants. A verdict and judgment had been rendered
Page 35 U. S. 509
in favor of the plaintiff, and on the case's coming into this
Court the judgment of the Circuit Court of the County of Alexandria
was reversed and the case was remanded to that court with
directions to award a
venire facias de novo. The mandate
of this Court stated that the circuit court erred in instructing
the jury that the interest of the assured in the property insured
is such as is described in the original offer for insurance and in
the policy, and also in this that the said circuit court erred in
this, in the opinion to the jury, that the evidence was sufficient
to be left to them, from which they might infer that the defendants
waived the objections to the certificate and other preliminary
proof required by the ninth rule annexed to the policy.
On the coming in of the mandate, November 5, 1830, the plaintiff
in the circuit court discontinued the suit.
In September, 1831, Joseph W. Lawrence, survivor of Lawrence and
Poindexter, instituted another suit against the same defendants on
the same policy of insurance, and after various pleadings and
demurrers, &c., the case was tried by a jury in October, 1834,
and a verdict and judgment entered for the plaintiff.
The defendants excepted to the charge of the court in two bills
of exceptions, and they prosecuted this writ of error.
The case brought up by this writ of error was in all respects
the same with that which was before the Court in 1829, with the
exceptions fully stated in the opinion of the Court.
MR. JUSTICE STORY delivered the opinion of the Court.
The original action was assumpsit, brought by the defendant in
error against the insurance company upon a policy of insurance
against fire underwritten by the company on 9 April 1823, whereby
the company insured for the defendant in error, and his partner,
Poindexter (since deceased), $7,000 on their stone mill, called the
Elba mill, four stories high, situated on an island about a mile
from Frederickburg in Virginia. The declaration averred a total
loss by fire, on 14 February, 1824.
There was a former suit brought on the same policy against
the
Page 35 U. S. 510
company, in which the plaintiff obtained a verdict and judgment.
That judgment was brought before this Court on a writ of error in
January term, 1829, and the judgment was reversed. The cause will
be found fully reported, with the grounds of the reversal, in the
second volume of Mr. Peters' Reports,
27 U. S. 2 Pet.
26. One of the grounds of that reversal was the omission, before
the suit was commenced, to procure a certificate from a magistrate
in compliance with the ninth fundamental article of the rules of
the company, upon which the policy was made, and to which those
rules were annexed as a part of the conditions of the contract. On
14 February, 1829 (after the reversal, and the reason thereof were
made known), being five years after the loss, a new certificate was
obtained from Mr. Hooe, a magistrate of the county in which the
mill was situated. The original suit was afterwards discontinued in
the circuit court on 5 November, 1830. The present suit was
afterwards commenced in September, 1831.
In the court below, various pleas were interposed by the
company, upon some of which there were issues to the country, and
others, which were special, eventuated in demurrers. Upon the
former, a verdict was at the trial found for the plaintiff, and
upon the latter (as well as upon the verdict) judgment was
ultimately pronounced in favor of the plaintiff. Bills of
exceptions were also taken at the trial upon various points of law
raised in argument, and the correctness of the ruling of these
points, raised both upon the special pleadings and upon the trial
of the issues of fact, are upon the present writ of error brought
before us for revision. All the leading facts of the case, except
the new certificate of Hooe beforementioned and the testimony of
Joseph Howard (which will hereafter be a subject of comment upon
the inquiry as to his competency) are precisely the same as were
before us upon the writ of error in 1829. And as the testimony of
Howard, if admissible, does not in our opinion at all vary the
operation and pressure of the point of law in the case, we deem it
unnecessary to do more than to refer to the case as reported in
Peters' Reports for all the material facts. It may be proper,
however, to state that it was then decided that there was no waiver
by the company of its right to the preliminary proofs required by
the ninth article of its rules, and that the assured had an
insurable interest.
In examining the case presented by the present writ of error, we
shall endeavor to strip it of the artificial and complicated form
in
Page 35 U. S. 511
which it comes before the Court, and instead of wandering
through the maze of special pleadings and exceptions with which the
merits of the case are encumbered, and under which indeed they seem
almost buried, we shall consider the material questions presented
by the record, and afterwards briefly apply the decisions on them
to the solution of the points raised by the pleadings and
exceptions.
The first question naturally presented is whether Joseph Howard
was a competent witness in the suit. The original defendants (the
insurance company) objected to his competency, and the objection
was overruled and his testimony was admitted by the court. The
facts relied on to establish his incompetency were these. Howard
and Lawrence (the plaintiffs) had, in September 1813, purchased the
premises of W. and G. Winchester, and in the conveyance it was
declared that it was subject to the payment of the annual rent of
�80, and also to the payment of $6,695, the balance of the purchase
money due to the grantors, agreeably to certain notes given
therefor by Howard and Lawrence, and that the same sum of $6,695
and the accruing interest should be a lien on the premises in the
same manner as if a mortgage had been executed therefor. Howard and
Lawrence, in May, 1814, executed a deed of trust to W. J. Roberts
on the premises to secure certain endorsers upon their notes at the
Bank of Virginia, and the Farmers Bank at Frederickburg. In July,
1818, Howard made an agreement with Lawrence to convey the premises
to him at the price of $30,000, to which amount Lawrence was to
procure a release of debts due from Howard and Lawrence, and then
Howard was to make a conveyance of his moiety of the premises to
Lawrence, subject to the liens given to the banks (hereinafter
mentioned), and to Winchester, and also the ground rent, &c.
Lawrence, in November, 1822, entered into a contract with
Poindexter by which the latter became interested in a moiety of the
premises and became liable to the payment of a moiety of the debts
due by Howard and Lawrence to the Bank of Virginia and the Farmers
Bank, at the Frederickburg branches, for which Howard and Lawrence
had executed the deed of trust to Roberts, and also for the debt
due to Winchester, for which there was a mortgage or lien on the
premises.
Lawrence and Poindexter, in February, 1824, assigned the present
policy on the premises to Roberts by an instrument which states no
purpose, but merely says "that for value received, they do assign
the policy to Roberts," to whom the said property has been conveyed
in trust for certain purposes. It may be inferred that the
object
Page 35 U. S. 512
was to subject the rights and interest secured by the policy to
the trust.
It is admitted that all these bank debts of Howard and Lawrence
have been discharged and all the liability to all their endorsers,
except John Mundell deceased, who, as executor, has, by a release
under seal, released Howard from all liability by reason of the
endorsements of his testator. It is suggested that this release is
inoperative in point of law because it is not competent for an
executor to release such a liability to his testator. We are of a
different opinion, if the transaction was
bona fide and
for a sufficient consideration and there is no evidence to disprove
either. So that the deed of trust has become completely
functus
officio, and Howard, as to the bank debts, has no interest
whatsoever to be affected by the assignment of the policy.
The debt to the Winchesters of $6,695 yet remains due and
unpaid, and as to this it is insisted that there is a remaining
interest in Howard, who is personally liable to the payment of it,
and the proceeds of the policy, if recovered, will go,
pro
tanto, in discharge of that debt. Assuming that Howard is
personally liable for that debt, still, unless the creditors have
not merely a lien on the premises, but a lien on the policy for it,
Howard has no interest which renders him incompetent in this suit.
Now we know of no principle of law or of equity by which a
mortgagee has a right to claim the benefit of a policy underwritten
for the mortgagor on the mortgaged property in case of a loss by
fire. It is not attached or an incident to his mortgage. It is
strictly a personal contract for the benefit of the mortgagor, to
which the mortgagee has no more title than any other creditor. Lord
Chancellor King, in
Lynch v. Dalzell, 3 Bro.Parl.Cases
497;
S.C. 2 Marshall on Insurance, b. 4, ch. 4, 803, took
notice of this distinction, saying:
"These policies are not insurances of the specific things
(goods) mentioned to be insured; nor do such insurances attach to
the realty, or in any manner go with the same, as incident, by any
conveyance or assignment, but they are only special agreements with
the persons insured against such loss or damage as they may
sustain."
So that in this view, we are of opinion that Howard was a
competent witness and properly admitted by the court below. We have
already said that we do not perceive that the testimony given by
Howard changes in any material respect the legal posture of the
case. The first exception of the insurance company was therefore
properly overruled.
Page 35 U. S. 513
The next question which arises is, as to the proper construction
of the ninth article of the fundamental rules of the insurance
company. That article is in the following terms:
"9. All persons assured by this company sustaining any loss or
damage by fire are forthwith to give notice to the company, and as
soon as possible thereafter deliver in as particular an account of
their loss or damage, signed with their own hands, as the nature of
the case will admit of, and make proof of the same by their oath or
affirmation and by their books of accounts, or proper vouchers, as
shall be reasonably required, and shall procure a certificate under
the hand of a magistrate or a sworn notary of the town or county in
which the fire happened, not concerned in such loss directly or
indirectly, importing that they are acquainted with the character
and circumstances of the person or persons insured, and do know or
verily believe that he, she, or they really and by misfortune,
without any kind of fraud or evil practice, have sustained by such
fire loss or damage to the amount therein mentioned, and until such
affidavit and certificate are produced, the loss claimed shall not
be payable; also, if there appears any fraud, the claimant shall
forfeit his claim to restitution or payment by virtue of his
policy."
It is contended on the part of the company first, that the
certificate from a magistrate here provided for is to be procured
"as soon as possible," and that these words in the preceding clause
are to be drawn down and construed to belong to the latter clause
so as to read "and shall, as soon as possible, procure a
certificate, &c." And secondly, if this construction be not
adopted, still that the certificate must be procured within a
reasonable time, and that the procurement of it after five years
from the time of the loss is not a reasonable time.
We are of opinion that the words "as soon as possible" cannot be
drawn down to fix the construction of the clause respecting the
certificate. We think the true intent and meaning of it is that the
certificate must be procured within a reasonable time after the
loss. It would be a most inconvenient course to adopt a different
construction, not required by the terms of the clause or the
context, as it would make the material inquiry not the production
of the certificate, but the possible diligence in proving it. The
assured is not entitled to receive or to sue for the loss until the
certificate is obtained, for it is a condition precedent to his
right of action. The language is "and until such affidavit and
certificate are produced,
Page 35 U. S. 514
the loss claimed shall not be payable." And besides, in the body
of the policy it is expressly provided
"Such loss and damage as the assured shall be entitled to
receive by virtue of the policy shall be paid within sixty days
after notice and proof thereof made by the assured in conformity to
the conditions of the company subjoined to the policy."
So that it is manifest that the assured would not be entitled to
maintain any action until he had furnished all the preliminary
proofs, so that the delay is not injurious to the company, but
solely to the assured by depriving him of his right to judgment
until it is procured.
The next inquiry is whether the new certificate was procured
within a reasonable time. In the ordinary course of things upon a
trial before the jury, this would be a mixed question of fact and
law -- of law where all the facts and circumstances were admitted
or established; of fact where these circumstances were open for the
ascertainment of the jury. In the present case, the question is
directly made upon a full display of all the facts and
circumstances in the special pleadings. We are of opinion that
under all these facts and circumstances, the nonproduction of the
proper certificate at an earlier period is fully accounted for, and
that the proper certificate was procured within a reasonable time.
The first certificate was procured shortly after the loss, and
presented to the company, which then made no objection to it. The
objection to it was first taken at the trial in the circuit court
in the former suit. The court were then of opinion that the
previous conduct of the company amounted to evidence, proper to be
left to the jury, of a waiver of any objection to the certificate.
This Court reversed the judgment on that point, and almost
contemporaneously with the annunciation of that decision, the new
certificate was obtained. The nonproduction then of the proper
certificate was occasioned not by any laches properly imputable to
the party, but by the omission of the company to give notice of the
defect and of the mistaken confidence placed by the party in the
company itself.
If the company had contemplated the objection, it would have
been but ordinary fair dealing to have apprised the plaintiff of
it, for it is now obvious that the defect might have been
immediately supplied. As it was, the company, unintentionally, it
may be, by their silence, misled him. The delay to procure the
correct certificate was not unreasonable. This view of the matter
disposes of the fourth plea.
Page 35 U. S. 515
That plea is substantially defective, in averring that the ninth
article of the fundamental rules required the certificate to be
procured "as soon as possible" after the loss, and is a legal
misconstruction of that article, and is in other respects
objectionable as attempting to put double matters in issue. The
replication set forth all the circumstances, which establish due
diligence in procuring the certificate within a reasonable time,
and if it be bad, for the want of a proper traverse, and for any
other cause set forth in the special demurrer, it leads us back to
the first error,
viz., a bad plea to a good declaration.
This view of the matter also disposes of the first, second, and
third instructions, asked of the court in the second bill of
exceptions, founded upon the supposed bar of the statute of
limitations, and the certificate not having been procured in a
reasonable time.
The next question which arises is whether there has been in the
proposal for the insurance, a misrepresentation of the interests of
the assured in the property insured, and if there has been, whether
if that misrepresentation is material to the risk and would have
enhanced the premium; it avoided the policy. The proposal for
insurance describes the property and interest thus:
"What premium will you ask to insure the following properly,
belonging to Lawrence and Poindexter, for one year, against loss or
damage by fire, on their stone mill, four stories high, covered
with wood, situate, &c."
It was decided by the Court in the former case, in
27 U. S. 2 Pet.
47, that the real interest existing in Lawrence and Poindexter, at
the time of the proposal, was not such as is described therein. It
was further decided by the Court in the same case that a
misrepresentation of the interest of the assured, which is material
to the risk, would avoid the policy. The language of the Court on
that occasion was:
"The contract for insurance is one in which the underwriters
generally act on the representation of the assured, and that
representation ought consequently to be fair, and to omit nothing
which it is material for the underwriters to know. It may not be
necessary that the person requiring insurance should state every
encumbrance on his property, which it might be required of him to
state if it was offered for sale. But fair dealing requires that he
should state everything which might influence, and probably would
influence the mind of the underwriter in forming or declining the
contract, &c. Generally speaking, insurances against fire are
made in the confidence that the assured will use all the
precautions to avoid the calamity insured against, which would be
suggested by his
Page 35 U. S. 516
interest. The extent of this interest must always influence the
underwriter in taking or rejecting the risk or in estimating the
premium. So far as it may influence him in these respects, it ought
to be communicated to him. Underwriters do not rely so much upon
the principles as on the interest of the assured, and it would
seem, therefore, to be always material, that they should know how
far this interest is engaged in guarding the property from
loss."
We think this reasoning entirely satisfactory and founded in the
true exposition of the contract of insurance. Whenever the nature
of this interest would have or might have a real influence upon the
underwriter, either not to underwrite at all or not to underwrite
except at a higher premium, it must be deemed material to the risk,
and if so, the misrepresentation or concealment of it will avoid
the policy. One of the tests, and certainly a decisive test,
whether a misrepresentation or concealment is material to the risk
is to ascertain whether, if the true state of the property or title
had been known, it would have enhanced the premium. If it would,
then the misrepresentation or concealment is fatal to the policy.
Now at the trial of the present case, the counsel for the insurance
company, in their second bill of exceptions, prayed the court to
instruct the jury that if they
"find from the evidence that a full disclosure of the actual
title of the insured in the premises, as it existed at the time,
was material to and would have considerably increased the estimate
and value of the risk and premium, and that no other disclosure of
the same was made than as aforesaid [
i.e. in the offer of
insurance], then there was a material concealment, which avoids the
policy."
The court, being divided in opinion, did not give this
instruction to the jury, and it was consequently refused. In our
opinion, upon the principles already stated, it ought to have been
given, and the refusal was an error for which the judgment must be
reversed. But the court rightly rejected the instructions upon the
same subject asked in the first bill of exceptions, which proceeded
upon the ground that if there was any misrepresentation of the
interest of the assured, that alone, whether material or not to the
risk, would avoid the policy. The instruction asked upon the same
subject in the second bill of exceptions is still more
objectionable, as it called upon the court to declare to the jury
as matter of law that the nondisclosure of the true nature and
extent of the title and interest of the assured in the premises was
a concealment of circumstances materially affecting the risk, which
avoided the policy,
Page 35 U. S. 517
thus taking from the jury the proper examination of the fact,
whether it was material to the risk or not.
The next question is whether a loss by fire occasioned by the
fault and negligence of the assured, their servants and agents, but
without fraud or design on their part, is a loss for which the
underwriters are liable. In regard to marine insurances, this was
formerly a question much vexed in the English and American courts.
But in England the point was completely settled in
Busk v.
Royal Exchange Insurance Company, 2 Barn. & Ald. 82, upon
the general ground that
causa proxima, non remota,
spectatur, and therefore that a loss whose proximate cause is
one of the enumerated risks in the policy is chargeable to the
underwriters, although the remote cause may be traced to the
negligence of the master and mariners. Although in the policy in
that case, the risk of the barratry was also assumed by the
underwriters; yet it is manifest that the opinion of the court
proceeded upon the broad and general ground. The same doctrine was
afterwards affirmed in
Walker v. Maitland, 5 B. & Ald.
171, and
Bishop v. Pentland, 7 Barn. & Cres. 219, and
is now deemed incontrovertibly established. The same doctrine was
fully discussed and adopted by this Court in the case of
Patapsco Insurance Company v.
Coulter, 3 Pet. 222.
In relation to insurances against fire on land, the doctrine
seems to have prevailed for a great length of time that they cover
losses occasioned by the mere faults and negligence of the assured
and his servants, unaffected by any fraud or design. In the
arguments of counsel on marine policies, it has constantly been
taken for granted, both in England and America,
* and although
there is no case directly on the point decided by the highest
authority, yet Lord Chief Justice Gibbs, at
nisi prius,
held that if a servant by negligence sets a house on fire, the loss
is recoverable on a policy against fire. Indeed, if such losses
where not within such policies, the indemnity against such risks
would be practically of little importance, since much the larger
number of fires of this sort may be traced back to some negligence,
slight or otherwise, of the members of families. The language of
fire policies, too, abundantly justifies this conclusion upon the
common principles of interpretation. The underwriters agree to pay
"all loss or damage," which the assured may sustain by fire
Page 35 U. S. 518
upon the property insured, but they except from this general
liability any loss or damage sustained by fire
"that may happen or take place in consequence of any invasion,
civil commotion, riot, or any military usurpation,' and the
fundamental rules also exclude losses by earthquakes and
hurricanes. The exception, then, may fairly be construed to leave
all other losses, except fraudulent losses, within the reach of the
policy upon the known maxim of law, that an exception expressly
carved out of a general clause, leaves all other cases within the
scope of the clause. Fraudulent losses are necessarily excepted
upon principles of general policy and morals, for no man can be
permitted, in a court of justice, to allege his own turpitude as a
ground of recovery in a suit. And indeed the ninth article of the
fundamental rules is manifestly intended to secure the company
against losses 'by fraud or evil practice."
We are then of opinion, that a loss by fire, occasioned by the
mere fault and negligence of the assured, or his servants or
agents, and without fraud or design, is a loss within the policy,
upon the general ground that the fire is the proximate cause of the
loss, and also upon the ground that the express exceptions in
policies against fire, leave this within the scope of the general
terms of such policies. The sixth plea is therefore bad in
substance.
The next question which arises is upon the supposed
misdescription of the premises in the proposal for insurance and
the effect of that misdescription. It was decided by this Court in
the former case, in
27 U. S. 2 Pet.
26,
27 U. S. 53,
27 U. S. 56, that
the misdescription of the premises (not fraudulently made), to be
such as would vitiate the policy, must, upon the true construction
of the fundamental rules of the company, not only be material to
and increasing the risk, but such as would occasion the insurance
to be made at a lower premium than would otherwise be demanded. If,
therefore, the misdescription were material to the risk, and would
increase it, but yet would not reduce the premium, it would not
avoid the policy. And that the points as to the misdescription, as
well as the effect thereof upon the premium, were matters of fact
for the consideration of the jury. We are entirely satisfied that
this is the true construction of the terms and intent of the
fundamental rules. Upon this ground we are of opinion that the
fifth plea is bad in substance, for it puts the case wholly upon
the materiality of the misdescription to the risk, without any
reference to the premium. The last instruction asked by the counsel
of the company in the bill of exceptions propounds the point in
a
Page 35 U. S. 519
somewhat different form. It is
"That if the jury find, from the evidence, that the construction
of the building, &c., was grossly misrepresented in the offer
and policy, and instead of being a building with walls of stone,
and with a covering or roof only of wood, the walls themselves were
partly of wood, and that such actual construction of the building
greatly increased the risk beyond what the insurers would have
incurred, if the building had truly answered the description in the
said offer and policy, then the jury ought to presume that the
building was charged in the said policy at a lower premium than
would otherwise have been demanded by the defendants, so as to
bring the case within the operation of the last clause of the first
of the said fundamental rules."
If this instruction had merely asked that the jury might
presume, or were at liberty to presume, &c., upon the facts and
circumstances so stated, there would not have been any just
objection to it. But it goes much farther, and insists that the
jury "ought to presume," &c., which in truth is removing the
whole matter of fact from the jury, and compelling them to decide
the point as a conclusive presumption of law. This we are of
opinion would have been wholly unjustifiable on the part of the
court. The instruction called upon the court to decide not upon a
conclusive presumption of law, but upon a mere presumption of fact;
a matter which exclusively belonged to the jury to consider and
resolve. It is directly in the face of the decision in
27 U. S. 2 Pet.
55-56, upon this very point. It is obvious from the very terms of
the rules, that cases may exist in the same class of hazards of
very different degrees of risk, from the nature and qualities of
the thing insured, and yet may not increase or diminish the
premium. Whether the misdescription would have any effect upon the
premium must therefore, from the very nature of the inquiry, be a
matter of fact upon all the circumstances of each particular case.
The instruction prayed was therefore properly rejected.
The judgment of the circuit court must be reversed for the
error already stated and the cause remanded with directions to the
court to award a venire facias de novo.
This cause came on to be heard on the transcript of the record
from the Circuit Court of the United States for the District of
Columbia holden in and for the County of Alexandria, and was argued
by counsel, on consideration whereof it is the opinion of this
Court that
Page 35 U. S. 520
there was error in the circuit court in refusing to give to the
jury the following instruction, in the second bill of exceptions
mentioned, on the prayer of the counsel for the said insurance
company,
viz.,
"If the jury find from the evidence that a full disclosure of
the actual title of the insured in the premises as it existed at
the time was material to and would have considerably increased the
estimate and value of the risk and premium, and that no other
disclosure of the same was made than as aforesaid; then there was a
material concealment which avoids the policy."
It is therefore considered and adjudged by this Court that for
the error aforesaid, the judgment aforesaid be and hereby is
reversed, and that the same be remanded to the circuit court with
directions to award a
venire facias de novo.
*
See Busk v. Royal Exchange Insurance Company, 2 Barn.
& Ald. 82, and
Grim v. Phoenix Insurance Company, 13
Johns. 451.