Everett v. Standard Accident Insurance

This is an appeal from a judgment in favor of plaintiff for the full principal sum of an accident insurance policy providing for the payment of seven thousand five hundred dollars to plaintiff as the wife of Francis J. Everett, who was killed while riding a motorcycle in the city of Redlands as the result of a collision with an automobile. The policy of insurance was executed in due form and the premium paid, and proof of the death from accidental causes was properly made.

The company defended upon the ground that decedent had been guilty of fraudulent misrepresentations and concealment which resulted in breaches of warranties which were contained in the application for the policy. The misrepresentations asserted by the company were: (1) That the insured’s name was Francis J. Everett, whereas his true name was

On each one of the defenses urged by the defendant there was a substantial conflict in the evidence, which the jury resolved in favor of the plaintiff and against the defendant. On this appeal the company urges that the evidence fully supports its theory of the case and does not support the verdict in favor of the plaintiff. It is also urged, apparently with some seriousness, that any verdict against an insurance company should on appeal be treated as prima fade erroneous and that this court should take the entire matter from the jury and direct a judgment in favor of the company upon the record herein presented. Criticisms of certain instructions given to the jury and rulings upon the admission of evidence are also made, and these will be considered in their proper order.

The defenses above noted as 1, 2, and 5, together with the matter of concealment, are based upon the following testimony offered by the defendant: That one James F. Cowie was married in an eastern state in 1877 to one Jennie Burt and that these two lived together as husband and wife until June, 1890, when Cowie deserted his wife and five children. Mrs. Cowie never heard from her husband directly thereafter until about six months after the desertion, when she received through the mail in a roundabout way a letter in his own handwriting regretting his action and offering to return if she was willing to have him do so. Nothing further was heard from him until 1893, when, accord

The facts relied upon by defendant in support of its defense noted as No. 3, relating to asserted misrepresentations as to the occupation of the decedent, are that though the decedent represented himself to be the superintendent of the West Redlands Company, a mutual irrigation company, he was, in fact, the zanjero for such company and was known as such throughout the district in which he was employed. It is also claimed that the decedent misrepresented his occupation as an orange grower with supervising duties only, because he performed some manual labor in and about his home and assisted with the care of the orange grove. The evidence upon both of these points was conflicting. The records of the company show that decedent was employed as its superintendent. The company was a small concern supplying an average of 110 inches of water per day for distribution among its stockholders 'during the irrigating season. The deceased had no duties to perform regarding

The facts relating to the occupation of decedent as an orange grower are that he and the plaintiff owned two orange groves, one not quite four and the other two and a half acres. He hired the heavy manual labor and supervised the manner in which it was performed. He did some manual labor in and about the groves and around his home place, consisting of cutting out some brush or deadwood, hoeing weeds about the house and the lawn, and small jobs in the orange groves. For instance, it was shown that on one occasion he helped operate the machine that carried around the fertilizer and did some “light pruning” and showed his employee how to use the plow on one occasion. In addition to this, when time and inclination permitted, he assisted his. wife in feeding the chickens, milking the cow,

The evidence in support of the defense noted above as No. 4, relating to the income of decedent, is that as superintendent of the water company he received a salary of sixty-five dollars a month, and that consequently he misrepresented the facts as to his income to the agent when he accepted the application containing the statement, “My income per week exceeds- the gross amount of weekly indemnity under all policies carried by me.” In response to this defense plaintiff offered testimony that decedent’s income, together with his salary from the water company, exceeded the sum of twenty-five dollars a week, the weekly indemnity provided in the policy in suit.

[1] The special defenses raised by appellant were all based upon the alleged fraud of decedent. The presumption is always against fraud. This presumption approximates in strength that of innocence of crime. (Truett v. Onderdonk, 120 Cal. 581 , 588, [ 53 Pac. 26 ].) [2] One who seeks relief from fraud must allege it and prove it by clear and satisfactory evidence. A mere suspicion of fraud is not sufficient. Here the evidence was conflicting in every particular. Consideration will be given each of these special defenses in the order presented by appellant.

1. That decedent represented and warranted that his name was Francis J. Everett, whereas in truth' his name was James F. Cowie. The uncontradicted evidence was that for a period of twenty-two years before the policy was written decedent had been known as Francis

2. That Elizabeth A. Everett was his wife. Even if this be treated as a warranty, there is sufficient evidence to support a finding that it was true. Appellant relies upon the showing that one James F. Cowie was married to Jennie Burt in Wisconsin; that they lived together in Minnesota until 1890, when Cowie deserted his wife and children; that his wife had not heard from him since his desertion except by way of a letter written in July of that year; that the wife had not secured a divorce and had no knowledge whether a divorce had been obtained by her husband; that the person who it was claimed was in fact Cowie had lived in San Bernardino County since 1893 and had not procured a divorce in that county. [4] Respondent relies upon the presumption that Everett did not commit a crime when he contracted the marriage with respondent in 1895, the presumption that such marriage was valid and the failure of identification of the decedent with Cowie. Unless these presumptions were controverted by other evidence, the jury was bound to find according to the presumption. (Sec. 1691, Code Civ. Proc.) If controverted by other evidence the presumption itself is to be treated as evidence conflicting with the other evidence offered. Otherwise there would be no need of using the word “other” in the code section cited. Thus, the presumption of innocence of crime will support a verdict of acquittal in a criminal case though no evidence is offered to controvert' the case of the prosecution. The rule differs as to an inference wMch can be drawn only

This branch of the case is controlled by the decision of the supreme court in Hunter v. Hunter, 111 Cal. 261 , 267, [ 52 Am. St. Rep. 180 , 31 L. R. A. 411 , 43 Pac. 756 ], where the court say: “It is presumed that a person is innocent of crime or wrong. (Code Civ. Proe., sec. 1963.) There is also a presumption, and a very strong one, in favor of the legality of a marriage regularly solemnized. Rather than hold a second marriage invalid and .that the parties have committed a crime or been guilty of immorality, the courts have often indulged in the presumption of death in less than seven years, or, where the absent party was shown to be alive, have allowed a presumption that the absent party has procured a divorce. A more correct statement, perhaps, would be that the burden is cast upon the party asserting guilt or immorality to prove the negative—that the first marriage had not ended before the second marriage.” To the same effect are Estate of Baldwin, 162 Cal. 471 , 488, [ 123 Pac. 267 ]; Wilcox v. Wilcox, 171 Cal. 770 , 774, [ 155 Pac. 95 ]; In re Pusey, 173 Cal. 141 , [ 159 Pac. 433 ] ; Estate of Hughson, 173 Cal. 448 , 453, [ 160 Pac. 548 ], The evidence offered by appellant on this branch of the case would not sustain a conviction of bigamy if decedent had been tried for that offense. The law presumes that he did not commit bigamy, that he did not' commit perjury when he secured the license to marry respondent, and that he did not commit fraud when he procured the policy of insurance. The burden was on appellant to overcome these presumptions, and this it failed to do.

3. The third defense upon which argument is presented on this appeal relates to the occupation of decedent. In this, as in all the other special defenses, appellant put squarely in issue the materiality of the representations, alleging “that the fact that the duties of the said decedent were not supervising duties only was material to, and affected the hazard under the risk assumed by the terms of said policy.” To establish this defense it was necessary to prove the materiality of the representations as well as their

The facts presented to the jury were that upon the books of the water company he was designated superintendent. Appellant asserts that among the farmers he was known as zanjero. The difference between the use of the two titles depends mainly upon the community in which the party is employed. Zanjero is a Spanish word commonly used to designate a water boss of an irrigating concern. The Standard Dictionary gives this definition: “A person employed to distribute the water of an irrigating canal in due proportion among those entitled to use it.” If during the course of his employment he should take a shovel or a hoe or make minor repairs in and about the system, he would suffer no injury to his reputation whether he be known as a superintendent or a zanjero. He was asked to state what his duties were. He answered, “Superintendent, water company.” The agent of the company added, “Supervising duties only.” The testimony of the president and directors of the- company shows the truth of this statement. There is no conflict in the evidence upon this point. Appellant offered a mass of testimony to show that at certain times after the policy was written decedent was seen making some “ten-minute repairs,” or using a shovel or a hoe to find a leak in the pipes. The most . that this testimony could prove would be that there had been a change of occupations after the policy was written, a matter not in issue, because the policy did not prohibit a change of occupations, but expressly permitted it. There was no evidence tending to show that prior to or at the time the policy was written the decedent had engaged in any of these minor repairs.

The word “occupation” means the principal business in which a man engages. His duty is that which he is bound to do. The evidence here was that the duties of the insured were to superintend the work and to employ necessary labor to keep up the system. It was also shown that any minor repairs made by him were made voluntarily because they were not of sufficient importance to justify the employment of a laborer. Here again appellant, by its answer, put in issue the materiality of this representation and warranty,

The evidence relating to the insured’s occupation as an orange grower was of like character. It was to the effect that he supervised the care of two small orange groves, employed all of the heavy labor, but occasionally hoed weeds around his front yard, milked one cow, and brought in the honey from the honey-bees. The evidence as to these acts, however, was not definite as to time, the greater part of it relating to acts which were done by the decedent prior to his employment as superintendent of the water company, in January, 1915, three months prior to the date of the policy. From this the jury could properly infer that upon his employment as superintendent of the water company his labor about the orange groves ceased. [6] The evidence offered by appellant on the matter of occupations by decedent is insufficient to show either misrepresentation or a breach of warranty in connection with either occupation.

4. If it be conceded that the acceptance by decedent without objection of the printed matter in the application above quoted constitutes a warranty on his part that his weekly .income was in excess of twenty-five dollars, there was a substantial conflict in the evidence as to the actual income of the decedent from his two occupations given as water superintendent and orange grower, which the jury resolved in favor of respondent and against the appellant. But it may well be said that the printed matter referred to in the application was not a warranty on the part of the applicant that his income exceeded twenty-five dollars a week. He did warrant that his income exceeded the gross amount of weekly indemnity under all policies carried by him. The policy upon which this suit rests had not then been issued. If the company intended this statement to be a warranty that the weekly income exceeded that provided for in the policy which might thereafter be issued by it, it was guilty of a concealment equal only to that charged against the applicant in the particulars hereinbefore noted.

fThe presumption of innocence of crime and of fraud cast upon appellant the burden of proof,] [7] It voluntarily put in evidence, the statements of decedent as to his income and attempted to controvert this merely by the showing that his salary with the water company was sixty-five dollars a month. Upon this point it presented the issue in its answer merely by the allegation that the income of decedent did not “exceed sixty-five dollars a month.’’ This it failed to prove. It alleged that the warranty was material to the risk covered, yet from its own manual which it put in evidence it appears that the company fixed the indemnity arbitrarily according to occupation and without regard to weekly income.

5. That his habits were correct and temperate, whereas he was living in an adulterous relation with a woman not his wife. The only positive evidence on this branch of the ease was that decedent had lived “a respectable, honorable life here and was respected by all his neighbors.” Against this evidence was the suspicion that decedent was in fact Cowie, who had deserted his wife, and that decedent was illegally cohabiting with respondent. In view of the evidence heretofore discussed and the presumption covering the legality of the marriage with .respondent, the evidence falls short of proving the alleged falsity of this warranty.

The objections relating to the instructions given to the jury may be generally stated as involving the single point whether a question of the materiality of the warranties should have been submitted to the jury. Section 2611 of the Civil Code provides: “A policy may declare that a violation of specified provisions thereof shall avoid it, otherwise the breach of an immaterial provision does not avoid the policy.” Section 2610 of the same code provides: “The violation of a material warranty, or other material provision of a policy; on the part of either party thereto, entitles the other to rescind.” In Victoria Steamship Co. v. Western Assur. Co., 167 Cal. 348 , 357, [ 139 Pac. 807 , 811], it was said: “Under these provisions no right to avoid or rescind a subsisting policy occurs from the violation of any provision thereof, whether technically a warranty or not,” unless such provision is material, except in cases where the policy itself declares that such breach shall- avoid it. This policy makes no such declaration. We cannot agree with the defendant’s counsel in their contention that the principles stated in sections 2608 and 2610 are applicable only to implied warranties and that the principle of the common law that a violation of an express warranty avoids the policy, although the warranty be immaterial, applies to and controls this case.”

The language of the policy relied on by appellant as meeting the terms of section 2611 is: “Full compliance of the insured and beneficiary with all provisions of this policy is a condition precedent to recovery hereunder and any failure in this respect shall forfeit to the company all right to any indemnity.” [8] “Compliance” by the insured and the beneficiary with the provisions of the policy relates to those-things which are required to be done by either the insured or the beneficiary after the policy is written. [9] Any uncertainty or ambiguity in a contract of insurance is to be interpreted most strongly against the insurer. (Victoria Steamship Co. v. Western Assur . Co., 167 Cal. 353 , [ 139 Pac. 810 ].) [10] The language of this policy falls short of a declaration “that a violation of specified provi

[11] In Solomon v. Federal Ins. Co., 176 Cal. 133 , [ 167 Pac. 859 ], it was said that- section 2612 of the Civil Code was limited by section 2610 of the Civil Code, which permits a party to rescind upon breach of a material warranty. But rescission must be made before action on the policy. (Civ. Code, sec. 2583.) It is where the insurer fails to exercise the right to rescind and sets up breach of warranties as a defense to payment, if the evidence of fraud on the part of the insured is not clear and uneontradicted so that the materiality of the warranties is a matter of law, that the question of such materiality, is properly left to the. jury.

[12] Objection is made to the refusal of the trial court to permit the agent of the appellant company to testify whether he would have written the insurance if he had known some of the facts alleged to constitute the falsity of the warranties. The trial court properly rejected this testimony. It was nothing more than the individual opinion of an employee of the company as to what he would have

The judgment is affirmed.

Langdon, P. J., and Brittain, J., concurred.

A petition to have the cause heard in the supreme court, after judgment in the district court of appeal,'was denied by the supreme court on February 26, 1920.

All the Justices concurred.