« ForrigeFortsett »
legal impossibility. It converts the agent of one into the agent of both. He deals with the subjectmatter for both contracting parties. He is instructed by the company to study his documents and papers, so that he can "readily fill up the blanks;" he can negotiate for the company for high rates of insurance, and at the same time his duty to his other principals is to cheapen the rates. It places the agent in an inconsistent and antagonistic position. On the one hand, he must ply the people to insure, extend and increase the business and the profits of the company, and thereby put money in his own purse. But, in doing all this, if he blunders and makes mistakes for these, he is the agent of his customers, and with them is the responsibility. If he waives a forfeiture by extending the time for the payment of a premium note, it would be a grave question whether he represented the company or the assured. If the latter, there would be no waiver at all. The complications would be intricate, and almost inexplicable.
Whilst we can not sustain this condition, we repeat that it is entirely legitimate for this corporation to limit the powers of its local agents. But if they choose to do so, those with whom they do business ought to be informed of it. We adopt the doctrine of those cases which hold that, if the agent takes charge of the preparation of the application, or suggests or advises what shall be answered, or what will be a sufficient answer, the company shall not avoid the policy because they are false or untrue, if full disclosures were made by the applicant to him.
We come now to consider whether there are any false representations or concealments that should avoid the policy. The underwriter was entitled to full disclosures, not merely to know the truth, but the whole truth—a withholding of any facts material to the risk is tantamount to a false representation, and visited with the same penalty.
No serious objection is made to the answer to the interrogatory about the title.
It is said, with great force of reason, that the response to the inquiry about incumbrances lacks fullness, and does not accord with the truth. It was very material to the company to know the extent of the assured's interest in the property, and its value. If he had only an equity of redemption, how much was it worth? The fact was that the incumbrance was for a principal debt of $40,000, with large arrears of interest. It was in litigation, and there had been a decree of the chancery court reducing the apparent debt to $10,000, which had been appealed from, and was undecided in the supreme court. These circumstances were important, both in determining whether the risk would be taken and in fixing the rate of insurance.
It is also objected that the answers to the question as to the value of the plantation, and the ginhouse, gin-stands, press, etc., and appurtenances, are untrue in this: that the valuation is excessive. Every overvaluation will not avoid the contract. There must be some element of fraud, or intention to deceive with a view to obtain insurance thereon for a greater sum than could otherwise be obtained. The rule approved by the Supreme Court in Frank
lin Insurance Co. v. Vaughan, 92 U. S. 519, is that if the assured put a value on his property greatly in excess of its cash value in the market, yet if he did so in the honest belief that the property was worth the valuation put upon it, and the excessive valuation was made in good faith, and not intended to mislead or defraud the insurance company, then such overvaluation will not defeat a recovery on the policy. In that case the "goods" were valued in the application at $12,000; the actual worth, as found by the jury, was $7,804 Yet, there being no fraud meditated, or intention to mislead, the contract was not avoided.
The Planters' Insurance Company gave notice in the blank application, and also stipulated in the policy, that they wonld only pay, if a loss occurred, two-thirds of the value of the property at the time of the loss-thereby giving themselves a wide margin of safety, and not trusting to the accuracy of valuations. At best, the value of real estate and structures thereon is uncertain. It is a matter very much of opinion, about which there will be great difference. Myers was asked his opinion, and if it was in excess of others, he should not suffer by it, if he meant no fraud or deceit.
The answers to the questions, six, twelve and fifteen, in relation to the title, the value of the plantation, and the incumbrance, relied upon by the insurance company to defeat a recovery, were given under these circumstances: Wilson, the agent, states that, at the time the application was filled up, and several years prior thereto, he was intimately acquainted with the Belmont plantation, and gin-house, and appurtenances; that he had specially examined the latter twice, and made two surveys, for the inspection of insurance companies; and that his invariable custom was (followed in this case) to explain the interrogatories in the printed blanks, and instruct the applicant how to make his answers; that he knew that Myers owned two-thirds of the Belmont plantation, upon which the deed of trust in favor of Estill operated to secure a principal debt of $40,000; that he was trustee, and a party to the suit which resulted in the chancery court decreeing a balance in favor of Estill of $10,000, which was pending on appeal in the supreme court, and undecided. With all this knowledge, Wilson states: "Knowing the proper answer to be made to question six, I did instruct Myers how to write down his answer. Of course I approved the same.”
He gives substantially this account of the answer to the twelfth interrogatory: A good deal of conversation occurred between Myers and himself as to the proper answer. The property produced $5,000 income, which would be ten per cent. on a value of $50,000. It was finally settled to give that valuation; and then added that although that. might be more than the property would bring in the market, for cash down, "yet it so greatly exceeded the amount of the lien or decree that it. was not a matter of importance as to the exact value." "He did not consider the valuation excessive." His explanation about the answer to the sixteenth question is to the effect that, knowing all about the matter inquired about, both Myers.
and himself knew that the incumbrance was $10,000, or thereabouts. Myers, in his deposition, states that he referred the question of the value of the plantation to Wilson, who, after discussion with him, concluded that the property fairly represented a cash capital of $50,000, "and could fairly be put down at that price." Wilson also agreed that the answer to the sixth interrogatory should be as written. Wilson, who was familiar with the deed in trust for Estill's benefit to himself as trustee, the litigation, and the decree therein, agreed with Myers, after consultation, that the answer to the sixteenth question should be as written in the application. Myers further says that he consulted Wilson on all the points of difficulty.
Not to pursue the subject into further detail, it has been clearly proven that Wilson actively participated in the preparation of the application, dictated the most material answers complained of as erroneous, and approved and consented to all of them as statements of the truth, especially within the rule laid down in Insurance Company v. Mahone, 21 Wall., and the other cases herein before cited. The company is estopped to deny the truth of the answers in the application, and cannot make the defense that the statements of the assured therein are misrepresentations, so as to avoid the policy.
Myers, in his application, gave notice that his factors had applied for insurance, to the extent of $4,500, in other companies. In the face of the policy the insurers consented that such a policy "concurrent" might be underwritten. That was sufficient notice, or waiver of further notice. The company does not insist, in this court, on the point that the policy has been forfeited for nonpayment of the premium.
The 6th section of the charter (Acts 1874, p. 238) does no more than require the applicant to state "all the material facts and circumstances concerning the risk required by the company." But it does not prohibit the parties to the contract from making warranties if they choose. It is not restrictive of the power of the corporation, but declaratory of the duty of the assured. Independent of this section, it would have been the duty of the assured to have made full and truthful disclosures. The provision is for the benefit of the company, and was not designated to circumscribe its power.
There is great force in the argument of the counsel for defendant in error that the first warranty clause of the application extends no further and embraces no more, than the "condition, situation, risk, and value," etc., of the property on which insurance is applied for, which property was the house, gin-stands, press, etc.; and, on familiar principles, all else not included in the enumeration is excluded. The very point was ruled in Insurance Company v. Cornick, 24 Ill. 461. But, as hereinbefore said, construing all the instruments together, the application and the policy, as constituting the contract, the intent and purpose is reasonably clear that the risk was assumed on the faith that the property had been correctly de
scribed, and that no misrepresentations had been made of facts material to the risk; and that, although there was the warranty, above referred to, in the application, that was qualified by the stipulations in the policy, which was made to depend for its validity on the statements of the application as "representations,” and not as warranties. JUDGMENT AFFIRMED.
CHALMERS, J., concurring.
It is said in the opinion of this court (delivered by myself) in Co-operative Association v. Leflore, 53 Miss. 1 (on page 16), that "it is well settled that all stipulations and conditions contained in the body of an insurance policy are warranties, to the absolute truth of which the parties have pledged themselves." As written, the sentence is erroneous. By some carelessness of the writer the words "prima facie," before the word "warranties," were omitted, as is apparent by reference to the citation from Bliss on Life Insurance, section 55, from which the statement was taken. It was intended to state that such conditions and stipulations are, prima facie, warranties.
In the case at bar, the fourteenth condition printed on the back of the policy seems intended to declare that, in everything relating to the effecting of the insurance, the agent who procures it shall be deemed the agent of the insured, and not of the insurers. As thus stated, it involves a legal contradiction. The agent binds the company, temporarily at least, by the reception of the premium, and this he could not do if he was wholly the agent of the insured, and in no manner that of the insurers. A man cannot bind others by a contract between himself and his own agent.
I see no difficulty, however, in constituting him the agent of the company for some purposes, and of the applicant for others. For instance, the company might well stipulate that if its agent took part in filling out the application, he should be regarded, pro hac vice, as the agent of the applicant, and that neither his acts in so doing nor any information communicated to him should bind them unless transmitted to them by the writing, and by them approved. Such a stipulation, to be binding, should be made known to the applicant in plain and unmistakable language. Good faith would prompt that it should be communicated at or before the making-out of the application, though I will not say that this would be essential. Because the fourteenth condition on this policy was so ambiguous as to be almost unintelligible, I hold it to be unfair, and therefore invalid.
The fourteenth condition being stricken out, I consider it a wholly immaterial whether the statements contained in the application be regarded as representations or warranties. The truth as to all the matters inquired about was communicated to the agent of the company. He dictated or suggested the answers which are now complained of as false. His acts, in so doing, were the acts of his principals. Whether the statements were reprcsentations or warranties, they were made to embody untruths, by the insurers themselves, acting through their agent. A man is no more bound by
RECOVERY OF MONEY PAID OR PROPERTY CONVEYED UNDer Duress OR UPON FRAUDULENT INDUCEMENT. - Hoyt v. Dewey. Supreme Court of Vermont. Opinion by REDFIELD, J. To appear in 50 Vt. 465. 1. Money paid to prevent the exposure of the payer's misconduct, whether criminal or otherwise, can not be recovered in equity. 2. Money paid or property conveyed under duress or upon fraudulent inducement may be recovered in equity. Thus H, who had long been on terms of friendly intimacy with D, a female neighbor, made an assault on her in her own house, with intent to ravish. He had already on several occasions passed the limits of conventional propriety in his intercourse with her, invited her by acts and innuendo to an adulterous intercourse with him, and, several weeks before the time in question, had made a like assault upon her. There was no apparent change in the intimaty existing between them down to the time of the second assault, which was made at a meeting to which D had agreed in the expectation that I would assail her chastity, and that under the observation of a person whom she had admitted into an adjoining apartment as a witness, according to prearrangement. Immediately after the second assault, D, appearing to be in great distress of mind, summoned D, her brother, who, acting in his sister's behalf, invited H to an interview, and there charged him with an attempt to outrage his sister's person, and told him that she purposed to pursue him with such appliances as the law would afford, unless he gave her a large sum of money in compensation. On the following day H paid a large sum of money and conveyed property to B for the use of D. H filed a bill against D and B to recover the money and property. Held, that as the distress of D was feigned, the money and property were procured by both fraud and duress, and that the defendants should repay and reconvey the same.
POWER OF ARBITRATORS TO AWARD COSTS.-Burnell v. Everson. Supreme Court of Vermont. To appear in 50 Vt. 449. Arbitrators have power under a general submission to award costs of arbitration, including their own fees. PIERPONT, C. J. This action is brought to recover the one-half of the amount of the arbitrators' fees that were awarded to be paid by the plaintiff by a board of arbitrators appointed by the plaintiff and defendant to settle certain matters of difference between them. It appears from the case that in the submission nothing was said as to the costs of the arbitration. The arbitrators awarded that the plaintiff, Burnell, should pay their fees, amounting to the sum of $60. Afterwards they sued Burnell for their fee, and obtained judgment therefor. Burnell paid the judgment, and brought this suit, and the question now is, whether he can recover one-half of this defendant. It is claimed on the part of the plaintiff that the arbitrators, in awarding that he should pay their fees, exceeded their authority, and that their award in that respect is void; and, in support of this claim, the case of Morrison v. Buchanan, 32 Vt. 289, is
mainly relied on. In that case the suit was brought upon the submission bond, and the principal point lit. igated was, whether the arbitrators had in fact awarded that Buchanan should pay the arbitrators' fees. They awarded that he should pay the costs of the arbitration; they taxed Morrison's costs and fixed the precise amount that Buchanan should pay, but did not include in that sum their fees. The court held that there was no award that Buchanan should pay the arbitrators' fees; and, of course, his refusal to pay them was not a breach of the submission bond, and there could be no recovery against him. In disposing of the case, the late Chief Justice Redfield discusses at considerable length, and with his accustomed ability, the question as to the authority of arbitrators to award as to the costs of the arbitration when the authority is not expressly given by the submission, and says that the rule in England, and in Massachusetts, and several of the other states, is against the authority; that in Connecticut, New Hampshire and New York, the rule is in favor of the authority; and concludes by saying that the weight of American authorities seems to be against it. It is a noticeable fact that neither the judge in disposing of the case, nor the counsel in their briefs, make any allusion to the decisions of the courts in this state upon the question. In Hawley v. Hodge, 7 Vt. 237, Chief Justice Williams says: "There is no question that it is incident to the authority given to an arbitrator in a general submission, when no mention is made of costs, to award concerning the costs of the arbitration." In the case of Bowman v. Downer, 28 Vt. 532, it was expressly decided that arbitrators have authority to award as to the costs of the arbitration when the submission is silent upon that subject. Isham, J., after referring to the rule as established in England and some of the states, and to the case of Hawley v. Hodge, says that the principle laid down in that case "having been early adopted in this state, and the general practice being in conformity with it, we must consider the rule as settled. We think, therefore, that the plaintiff is entitled to recover in this case the amount of that award." The case of Morrison v. Buchanan can not be regarded as overruling these decisions, as the case turned upon a different question; and unless we are prepared to overrule them, we must regard the principle as established in this state, that arbitrators, under a general submission, have power to award as to the cost of the arbitration, including their own fees. This leing so, it follows that upon the facts stated in this case, the plaintiff can not recover.
HOWK, J.: When a note is indorsed concurrently with its execution, and at or before its delivery to the payee thereof, by persons other than such payee, the liability assumed by such indorsers, though presumptively that of indorsers merely, may be shown by parol evidence to be the liability of joint makers, or of guarantors of the note, according to the intention of the parties and the facts of the case. In this case, the allegations in the complaint that Parker and Browning indorsed the note, intending to become jointly liable thereon with Colclazer, was a material allegation, and not having been specially controverted by the defendants, must be taken as true. The judgment therefore holding them jointly liable as makers was correct. Affirmed.-Browning v. Merritt.
A DISCHARGE IN BANKRUPTCY CAN NOT BE COLLATERLLY ATTACKED.-This was a suit upon a promissory note. The defendants answered that they had been discharged in bankruptcy. The plaintiff replied that he had no notice of the bankruptcy proceedings; that defendants had failed to exhibit certain property in their schedule, and that the discharge was illegal. Judgment was entered for the defendants. PERKINS, J.: A judgment of a court of general jurisdiction in a case requiring ordinary adversary proceedings, where it has jurisdiction of the subject-matter and of the person, is not void, and can not be attacked collaterally for fraud or irregularity in the proceedings in which it was obtained. 6 Ind. 76, 324. The United States District Court, sitting in bankruptcy, is such a court. A discharge in bankruptcy can not be impeached collat. erally for any of the causes alleged in the reply in this case. 117 Mass. 17; 27 Ohio St. 452. The remedy for fraud and other irregularities in obtaining his discharge by a bankrupt must be sought by an application to the court in which the discharge was granted, to set the same aside, which said court may do under section 34 of the bankrupt act. It is not denied that the creditor had notice by publication, and this gives jurisdiction, 63 Mo. 143. Judgment affirmed. Wiley v. Paney.
DEFECTIVE COMPLAINT CURED BY Judgment. Suit to foreclose a mortgage given to secure promissory notes. The complaint did not aver the identity of the notes filed with it, and those described in the complaint. The defendant appeared but refused to answer, and the cause was submitted to the court for want of an answer, the evidence heard and finding a decree for plaintiff, to which the defendent took no exception. PERKINS, J.: The fact that the complaint does not state a cause of action may be brought before the court in three ways. First, by a demurrer; seeond, by a motion in arrest of judgment; and third, by assigning the fact as error in the supreme court The rule of decision on this point is not the same in all three cases. When it arises upon a demurrer to the complaint, the court can not assume that the plaintiff can prove anything beyond what he alleges therein; if the allegations of the complaint are insufficient, the demurrer must be sustained. But when the question is presented by a motion in arrest of judgment, or by assignment of error in the supreme court, if the deficiences in the complaint have been waived or supplied by evidence admitted without objection, the cause can not be reversed on appeal, though on demurrer the complaint would have been held bad. The complaint in this case would have been bad on demurrer, but judgment having been rendered without objection, it will be presumed that all the facts necessary to entitle the plaintiff to recover were proved, and the defect in bis complaint cured by the finding and judgment of the courts. Affirmed.-Scott v. Zartmar.
HUSBAND AND WIFE-CONVEYANCE — FRAUD.-A conveyance of real estate by a husband for a valuable consideration, through the intervention of a third person, to his wife, will not render hay, cut on said estate by the wife and put it into her barn, liable to attachment and sale on execution by a subsequent creditor of her husband, unless the conveyance was made with a design to hinder, delay and defraud his creditors, and the wife participated in that design. Opinion by LORD, J.-Dodd v. Adams.
TORTS DEFECTIVE STAGING-INJURY- LIABILITY.-1. Where a religious society, acting through a committee consisting of two of its members, have contracted with a carpenter to erect and remove a staging required in the work of frescoing its building, and, by the same committee, has contracted with a painter to do the frescoing; if the evidence shows that the society has, after its completion, accepted the staging, and has in effect invited and induced the painter or his, employee to come upon it, it is liable to him for injury occasioned by a dangerous condition of such staging, which was not apparent to him, and which was caused by negligence in its construction. Elliott v. Pray, 10 Allen, 378; Gilbert v. Nagle, 118 Mass. 278; Pickard v. Smith, 10 C. B. N. S. 470; Indermaner v. Dames, L. R. 1 C. P. 274, and L. R. 2 C. P. 311; Holmes v. Northeastern Ry., L. R. 4 Ex. 254; Coughtry v. Globe Wellend Co., 54 N. Y. 124. 2. In such a case the society and its committee can not be jointly sued. Opinion by GRAY, C. J.-Malchey v. Trustees.
CONSTRUCTION OF UNITED STATES STATUte of 1851, CH. 43.-The United States statute of 1851, ch. 43, exempting shipowners from any liability for loss by fire, not caused by their own design or neglect, and limiting their liability for losses by other causes without their privity or knowledge to the amount or value of their interest in the ship and freights, does not diminish or in any way affect their liability at common law for injuries caused by their own neglect. In sec. 1, which takes away the owner's liability for loss or damage to goods "by reason or by means of any fire happening to or on board the said ship or vessel, unless such fire is caused by the design or neglect of such owner or owners," the words "such fire" evidently refer to the previous words "fire happening to or on board," and if the neglect of the owners is the cause of the fires breaking out on the ship, it is wholly immaterial whether and how the fire originated elsewhere. The provision of sec. 4 of the act of Congress, and the rules of the Supreme Court of the United States for apportioning the sum, for which shipowners may be liable amongst the parties entitled thereto, apply only to claims which are limited by sec. 3 of the
act. A proceeding in admiralty under that section and those rules is substantially a proceeding in rem for the distribution of a fund, and does not determine the question of the owner's liability, except to those whose claims are limited by the act, or possibly others who voluntarily become parties to the cause. It can not affect the rights of those who have not submitted themselves to the jurisdiction, and whose claims are not limited to the amount to be distributed, but rest upon the owner's personal liability at common law as a wrong-doer. See the same case reported in 113 Mass. 495; Knowlton v. Providence & N. Y. S. S. Co., 53 N. Y. 76; Salisbury Mills v, Townsend, 109 Mass. 115; Harris v. Carpenter. 91 U. S. 254, 257. Opinion by GRAY, C. J.-Hill Manufg. Co. v. Providence & M. Y. S. S. Co.
ABSTRACT OF DECISIONS OF SUPREM E COURT OF WISCONSIN.
August Term, 1878.
Filed October 8, 1878.]
pital treasurer, was not bound to refund the amount to the state treasury, and his failure to pay over the same to his successor in office was not a breach of his official bond. 2. The hospital treasurer received the state treasurer's bank check as money, and after the appropriation became legally payable to him, receipted to the state treasurer for the amount as money. Hs loaned the check as money to the bank on which it was drawn, and received from the bank, to secure the loan collaterals, on which he collected a sum of money exceeding the amount of the check, and with such money took up orders duly drawn on him as hospital treasurer for liabilities of the hospital. The assignee in bankruptcy of said bank recovered from him the amount so collected on the collaterals. Held, that he received and expended the money as hospital treasurer, and relieved the state from all liability on the demands for which such orders were issued; and his mental election "to consider the money collected on the collaterals as held by him for the assignee, if such assignee should recover the same, and the hospital orders as his individual property," could not change the legal character and effect of his acts. Opinion by LYON, J.-State v. Baetz.
D. T. WRIGHT,
TAX SALES-ASSIGNMENT OF CERTIFICATES. An assignment by the county of the certificates of tax sales made to it, is necessary to enable any other person to maintain an action upon such certificates. 2. H purchased and took a deed from a county of lands upon which it held tax certificates; and the certificates were delivered to him without other consideration therefor than that paid for the lands. Afterwards he sold the certificates to K, who brought an action against the county for the amount of them, on the ground that the sales were invalid; but it did not appear that K had ever been disturbed in the possession of the lands. Held, (1.) That it would not be presumed, on these facts, that the certificates were duly assigned by the county to H upon their transfer to him. (2.) That, apart from any lack of assignment, neither H nor his assignee could, under the circumstances, maintain an action against the county for the amount of these certificates. Opinion by COLE, J.-Kruaer v. Supervisors of Wood County.
STATE TREASURER LIABILITY FOR MONEYS IRREGULARLY ADVANCED- BANKRUPTCY. 1. If the state treasurer pays an appropriation before the time of payment appointed by law, or without the warrant of the secretary of state when such warrant is required, he will be liable for any damages resulting to the state from such irregular payment. But where such a payment of a legislative appropriation for the state hospital for the insane was made to the treasurer of said hospital, who was the person appointed by law to receive it, and was receipted for by him in his official character, and used by him to pay claims against the hospital for whose payment the money was by law appropriated, and the amount paid was placed to the treasurer's credit in the books of the secretary of state (even if irregularly): Held, that the state treasurer, after the money became by law due and payable to the hos
T. Q. ASHBURN,
1. NOTES SECURED BY THE SAME MORTGAGE when transferred to different holders are to be paid in the order of their maturity, unless a different intention is expressed by the parties. 2. If the facts or circumstances exist to make the order of priority other than the order of maturity, such facts or circumstances must be shown by the party claiming to vary this order. Judgment of the district court affirmed. Opinion by WRIGHT, J.-Winters v. Franklin Bank of Cincinnati.
- PRACTICE.-1. A writ of attachment under the code without the requisite affidavit is void. 2. The seizure of property of a nonresident debtor upon whom service of summons can not be made, on such void writ, does not give the court such jurisdiction over the defendant, or his property, as will authorize a service by publication, or a judgment in the action. 3. The affidavit required by section 192, of the code, forms no part of the pleadings in the case, and should not be incorporated in the petition, but if the omission of a separate affidavit can be cured by a showing in the petition, it should contain all the requisites of an independent affidavit and be duly verified. 4. Where the petition, treated as an affidavit for an attachment, does not show that the claim sued on is just, nor state the amount the affiant believes he ought to recover, aad is verified upon belief merely, it is sufficient to cure the omission of a separate affidavit. 5. In an action for money only, where an attachment is sued out and levied on lands of a debtor, a mortgagee of the land seized in attachment is not a proper party to the action. 6. In such a case, the attaching creditor can not have relief in equity to