Newman v. Firemen's Insurance

Appellant as plaintiff in the court below instituted an action against respondent as defendant to recover for loss caused by fire, on an insurance policy issued by the defendant company. After a trial by the court judgment was rendered against appellant and in favor of respondent; and appellant has appealed from the judgment so rendered.

The insurance policy in question was written on a standard form for fire insurance in California; and the insured was named therein as Dr. A. J. Newman, who is the appellant. The total amount of the insurance was $3,000, $2,000 thereof covering the dwelling house at 6200 Buena Vista Terrace, in the city of Los Angeles, and $1,000 thereof covering household furniture and personal property at the same address. The period of the policy was from noon, September 20, 1940, to noon, September 20, 1943. The fire which is claimed to have caused the loss, for which appellant seeks recovery under the policy in question, occurred on September 16, 1941. In the answer to the complaint herein respondent admitted the occurrence of the fire, but denied the loss as claimed by appellant and set up three separate defenses. The first and second separate defenses were based on the following provision of the policy: “This entire policy shall be void, (a) if the insured has concealed or misrepresented any material

“II

“That prior to the execution and delivery of said policy, this defendant had insured plaintiff under the name of ‘Jacob Newman’ for loss by fire to building and contents allegedly located at #976 Pine Grove, Los Angeles, California; that in the years 1937 and 1939, plaintiff so insured under the name of ‘Jacob Newman’ claimed loss and damage by fire to said property against this defendant under said policy; that this defendant paid the plaintiff the loss claimed by the fire of 1937, but that under claim made for loss in 1939, this defendant, by reason, among other reasons, of the fact that plaintiff had included in his claim various and sundry items which were claimed lost and damaged by the fire of 1937 in claim made thereon, resisted said claim, and thereafter compromised the same and cancelled said policy and notified plaintiff that no insurance would be granted by this defendant company to plaintiff thereafter.

“Ill

“That plaintiff applied to an agent of this defendant representing Pittsburgh Underwriters Department of this defendant for the policy of insurance sued upon herein, for insurance, insuring him in the name of ‘Dr. A. J. Newman’, representing to said Agent that he was a doctor and entitled to said insurance; plaintiff represented the location of said property to be# 6200 Buena Vista Terrace, and represented his true name to be ‘Dr. A. J. Newman’; that the location of #6200 Buena Vista Terrace and the building situate thereat is the same location as #976 Pine Grove, Los Angeles, California,. and the building located thereat the same as that located or claimed to have been located at #976 Pine Grove, Los Angeles, California, and plaintiff herein is the same person as the person representing himself previously as ‘Jacob Newman’, and the property for which loss is claimed herein is the same property alleged damaged and destroyed by fire in the losses of' 1937 and 1939.

“That plaintiff, in so applying for said insurance, concealed from this defendant material facts, to-wit; That the property attempted to be described in the policy of insurance in the policy in suit herein as #6200 Buena Vista Terrace was the same property and the location the same as that which he had previously described as the property located at 976 Pine Grove, Los Angeles, California, and that he, ‘Dr A. J. Newman’, was the same person who had previously represented himself to be ‘Jacob Newman’, and the property for which loss is claimed herein is the same property alleged damaged and destroyed by the fire in the losses of 1937 and 1939. ’ ’

The second separate defense was based upon certain alleged and specified false statements made by appellant in connection with his claim of loss. The third separate defense was based upon appellant’s alleged refusal to answer questions concerning material matters relating to said insurance and the subject thereof, and, as to other matters, making false and evasive answers, thereby preventing a complete examination. This last defense is based upon a provision of the policy reading, “and the insured shall exhibit to any person designated in writing by this company all that remains of any property herein described, and shall submit to examination under oath, as often as required by any such person, and subscribe to the testimony so given.”

The trial court found all of the allegations of the foregoing separate defenses to be true. Appellant contends that there is not sufficient evidence to support such findings, and that there is also insufficient evidence to support a finding against appellant’s allegation of total loss. Appellant also contends that the decision of the trial court is contrary to law.

In regard to the allegation contained in paragraph II of the first separate defense, to the effect that the defendant company “cancelled said policy and notified plaintiff that no insurance would be granted by this defendant company to plaintiff thereafter,” the only evidence found in the record upon this subject is that given by the superintendent of the fire division of respondent’s organization, as follows: “Our record shows we had a policy for Jacob Newman, 976 Pine Grove Avenue, and that we had to take a loss sometime in 1939, I believe, and that we subsequently paid another loss.

Appellant testified that he used the name of Dr. Jacob Newman and the name of Dr. A. J. Newman. It is not disputed by respondent that appellant is known as “Dr. A. J. Newman.” In this connection, there was offered and received in evidence on behalf of respondent, a document entitled “Agreement for Submission to Appraisers,” which had been executed by appellant in connection with the claim of loss for the fire occurring in 1939. At the end of this document two signatures appear; the first, “Alfred J. Newman”; and directly under the first signature appears the signature “Jacob Newman.” The deposition of appellant taken with reference to the fire occurring February 17, 1939, introduced in evidence in the present case on behalf of respondent, was signed “Alfred J. Newman.” According to the record, appellant was known as Alfred Jacob Newman and also as Jacob Newman. Appellant testified that his full name was Alfred Jacob Newman. The trial court found it to be true that the property in question was known as number 6200 Buena Vista Terrace. The following testimony was given by appellant as to the address: “Q. Where do you live? A. The legal description is 976 Pine Grove Avenue, Los Angeles. Q. What do you mean by legal description ? A. The property cannot be reached easily from the north, to get off, so I advertise it as 6200 Buena Vista Terrace. Q. Has the

As to the matter of misrepresentation and concealment on the part of appellant in obtaining the policy of insurance on which the present suit is based, respondent states in its brief that the facts were admitted by appellant in his testimony. Appellant gave the following testimony regarding the circumstances under which appellant ordered the policy in question.

“When you applied for this policy, you say over the telephone, to Mrs. Lundeburg- A. Yes. Q. -had you previously discussed insurance with her? A. No, sir; not at all. Q. How did you know she was in the insurance business ? A. I asked the exchange that I belonged to to recommend me to an insurance broker who was a member of the exchange, and they gave me her name and address; and I called her up and asked her to issue a policy. Q. Now, you hadn’t met her previously? A. No, sir; I don’t believe I ever met her at all. Q. When you called her up, did you tell her your name was Dr. A. J. Newman? A. That’s right. I probably told her Dr. Newman was calling and she asked me for the initials, and I must have given her A. J. Q. You are not a doctor? A. I have several titles of doctor, as Doctor of osteopathy, chiropractics, naturopathy, and Doctor of Divinity, and several others. . . . Q. When you called up Mrs. Lundeburg, you told her you were Dr. A. J. Newman and wanted insurance? A. No; I said, ‘Dr. Newman calling, and I want insurance, ’ She said, ‘What are your initials’ And I said, ‘My initials are A. J.’ Q. You told her how much insurance you wanted? A. I must have. Q. Well, you would remember that? A. Oh, yes. Q. Did you tell her how much the building was worth ? A. I don’t think so. Q. Tell her-A. There was no discussion. I just told her I wanted $2000 on the house. Maybe she asked what I wanted, and I thought that would be sufficient. Q. You gave her the address at 6200 Buena Vista? A. That’s right. Q. And told her what kind of house it was? A. Well, I don’t know whether she ques

The record is devoid of any evidence from which there might be inferred an intent on the part of appellant to practice deception, either with respect to appellant’s identity or with respect to the identity of appellant’s property. However, an intent to deceive is not essential in such cases. (Telford v. New York Life Ins. Co., 9 Cal.2d 103 [ 69 P.2d 835 ].) The matter of concealment of material facts in applying for a policy of insurance is governed by the provisions of article I of chapter 3, part 1, division 1, of the Insurance Code. Section 330 thereof gives the definition of concealment: “Neglect to communicate that which a party knows, and ought to communicate, is concealment.” Section 332 provides: “Each party to a contract of insurance shall communicate to the other, in good faith, all facts within his knowledge which are or which he believes to be material to the contract and as to which he makes no warranty, and which the other has not the means of ascertaining.” Section 333 reads in part as follows: “Neither party to a contract of insurance is bound to communicate information of the matters following, except in answer to the inquiries of the other: 1. Those which the other knows. 2. Those which, in the exercise of ordinary care, the other ought to know, and of which the party has no reason to suppose him ignorant. ...” Section 334 sets forth the test of materiality. “Materiality is to be determined not by the event, but solely by the probable and reasonable influence of the facts upon the party to whom the communication is due, informing his estimate of the disadvantages of the proposed contract, or in making his inquiries. ’ ’ Section 335 provides in part: “Each party to a contract of insurance is bound tp know: (a) All the general causes which are open to his inquiry equally with that of the other, and which may affect either the political or material perils contemplated.”

The facts stated to respondent’s agent by appellant, in

A case closely analogous to the present ease is that of E. A. Boyd Co. v. United States Fidelity & Guaranty Co., 35 Cal.App.2d 171 [ 94 P.2d 1046 ] (hearing denied by Supreme Court), wherein an employee who had been previously guilty

At page 180, ibidem, it is stated: “Where the bond contains no clause rendering it void for former defalcations of an assured person and no questions are asked of the insured regarding the character or honesty of a bonded employee, ■ and no misstatements are made regarding material facts, the failure to voluntarily disclose the fact that the employer knew of a previous charge involving the dishonesty of an employee which occurred seven years before the application is made to bond him may not cause the insured to be charged with fraud or concealment which will render the bond void, particularly when the insurer is possessed of facts which should place a reasonably prudent person on inquiry regarding that offense, or omission, [cases and authorities cited.] ” The court then quotes from 3 Cooley’s Briefs on Insurance, 2d edition, stating: “In the authority last cited, at page 1970, after reviewing the authorities concerning undisclosed statements, it is said: ‘From these cases the rule may be deduced that facts which the insurer knows, or which he is bound to know, and may therefore be presumed to know, need not be disclosed” (Italics included.)

It is true that the decision in the Boyd case, last cited, was placed upon the ground of an estoppel operating against the insurer. But the court in that case also held that what had been said regarding the estoppel of the insurance company, which was created by its knowledge of the uncommunicated facts, did not conflict with the provisions of the Insurance Code, above quoted. Moreover, the facts and circumstances presented in the Boyd case were such as to have warranted

In the present case, as has already been pointed out, there was no misstatement of facts. There was merely a failure on the part of appellant to reveal that he was the same person as Jacob Newman and that 6200 Buena Vista Terrace was the same premises as 976 Pine Grove Avenue. From all that appears in the record, respondent had the means of ascertaining the uncommunicated facts; and, under the circumstances presented, the facts in question were such as could have been ascertained by respondent in the exercise of ordinary care. There is no evidence in the record on which to base an inference that appellant supposed respondent to be ignorant of the facts left undisclosed, or from which to infer that appellant had any reason to suppose respondent ignorant of such facts. In the absence of inquiry, therefore, appellant was not bound to disclose such facts upon applying for the fire insurance involved. (Ins. Code, §§ 332, 333 and 335, supra.) Cases cited by respondent upon the question of concealment are all distinguishable from the present case upon the facts.

However, in regard to the second separate defense and the findings thereon, the record reveals that the testimony of appellant upon cross-examination, with respect to items of personal property for which he claimed a loss, was generally vague; and appellant frequently professed a failure to remember the source from which, or the time when many of the articles were acquired. In view of the fact that the loss which formed the basis of appellant’s present suit was the third loss by fire on the premises in question, and that a number of items claimed by appellant as lost in the present case were identical or similar to items claimed as lost in the previous fire, it was material for respondent to obtain information which would serve to differentiate between items previously claimed as lost and the items claimed as lost in the present instance. One such item was that of dishes. In connection with the proof of loss for the second fire, which occurred on February 17, 1939, claim was made for total loss in the sum of $7.50 for one set of dishes, and in the sum of $50, as a total loss, for one lot of dishes and utensils. There was also a claim as for a complete loss of dishes, in the present case, also in the sum of $50. The same situation occurred with regard to certain robes and other apparel, articles of furniture and

The following appears in the record as to the cross-examination of appellant: “Q. Then you didn’t acquire all these things in here between the second and third fires— in Defendant’s Exhibit E—between the second and .third fires? A. No, there were many articles that remained from the last fire, that were not destroyed. Q. You told us a minute ago that all of these articles were acquired between the dates of the second fire and the third fire ? A. Not all. Q. I will hand you this list and then ask you to go over it and point out to me and the Court what of the articles listed in there you had at the time of the second fire. (Handing document to witness.) A. Well, I had the dishes. Q. You had the dishes ? A. Yes, sir. Q. They weren’t damaged or destroyed in the first fire or second ? A. They were, destroyed in the last. Q. I am asking you what in that list there, which of those items you had at the time of the second fire. A. The second or last ? Q. The second. A. These dishes might have been new from the second fire- between the second and third fires. Q. I am not asking you how you acquired $15,000 to $20,000 worth of merchandise in less than two years; I want to know whether any of the merchandise listed in there was merchandise you had on hand and saved from the second fire. A. I don’t know whether the dishes were. Q. Did you save any dishes from the second fire? A. I don’t remember. Q. Go through there and show me any of the articles that you had at the time of the second fire that you still had and were in good usable shape at the time of the third fire- do you understand what I mean ? A. Yes. Q. In other words, show me from that list the articles that you did not acquire between the time of the second and the third fires. A. Well, one or two beds. Q. By that you mean you saved one or two beds out of the first fire ? A. I think so. Q. Tell me of your best recollection. A. That is as far as I can remember. I think á couple of the beds that were saved in the second fire remained-there were so many beds in the house-and the quilts, there might have

There is sufficient evidence in the record to warrant an inference on the part of the trial court that the statements of appellant relative to the value of the real property involved and the statements relative to the claim for various items of property allegedly lost and damaged were not true. Whether such statements were made knowingly and with intent to defraud the insurer was a question of fact for the trial court to decide. (Pedrotti v. American Nat. Fire Ins. Co., 90 Cal.App. 668 [ 266 P. 376 ]; Singleton v. Hartford Fire Ins. Co., 127 Cal.App. 635 [ 16 P.2d 293 ].) Upon the evidence presented, an inference of intentional falsity was more reasonably consistent with the facts than an inference of good faith. It cannot be said, therefore, that the facts warrant any presumption of mistake or misapprehension on the part of the insured.

The evidence sustains the findings of the trial court to the effect that appellant knowingly and wilfully made claim for numerous and sundry items of property as totally lost and damaged by fire, which said items of property had been lost and destroyed by previous fires occurring in 1937 and 1939; that appellant knowingly, grossly overvalued each and every item for which claim was made in the documents presented in connection with the claim of loss, and in the examination with regard to the loss; and that appellant in his sworn proof of loss of January 9, 1942, swore that the loss on the building in question was $4,000, when in truth and in fact said loss and damage did not exceed $750; and that appellant made said statement with knowledge of the falsity thereof. Any one of the findings so made is sufficient to support the judgment.

In view of what has been said herein with respect to respondent’s second separate defense, it is unnecessary to consider the third separate defense. In passing, however, it may be stated that such evidence as has been pointed out by the parties with respect to this defense does not appear sufficient to sustain the findings of the trial court in this respect.

For the foregoing reasons the judgment is affirmed.

Appellant’s petition for a hearing by the Supreme Court was denied February 19, 1945.