Helbing v. Svea Ins. Co.

California Supreme Court Jul 1, 1880 No. No. 6,020Published

Before: Department, McKinstry

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Holding. The court held that a discrepancy between an insured's valuation of property and the jury's verdict does not create a legal presumption of fraud, as the determination of whether an overvaluation was willful or intentional is a question of fact for the jury.

Issues

Whether a discrepancy between an insurance application valuation and a jury verdict creates a legal presumption of fraud.
Whether the court may instruct a jury that one fact must be inferred from another in the absence of a statutory presumption.
Whether a jury's finding that an overvaluation was not intentional can be set aside when supported by evidence of circumstances surrounding the valuation.

Disposition. affirmed

Quotations verified verbatim against the opinion

“Under our system, fraud is ordinarily a question of fact, and the Court is not authorized, except where by statute a legal presumption is created, to instruct a jury that the existence of one fact is to he inferred from the existence of another.”

“The Court below properly instructed the jury that the “ false swearing ” constituting fraud within the meaning of the policy, was willful or intentional false swearing, “ not a mere discrepancy or innocent error.””

Synopsis

Eire Insurance—Warranty.—A provision in a policy of insurance, that the application for insurance shall be considered as a warranty, and that if the property insured is overvalued in it, the policy shall be void, applies only where the statement as to value is intentionally false.

Id.—Fraud.—So, also, where the policy provides that all fraud, or attempt at fraud, by false swearing as to the loss, shall cause a forfeiture of all' claim under the policy, a wrongful or intentional false swearing is intended, and not a mere discrepancy, or innocent error.

Id. — Evidence — Presumption.—Whether fraud is to be inferred from an excessive statement of the value of the property in the original application, or of the loss in the preliminary proofs, is a question of fact; and in neither case does a legal presumption of fraud arise; nor is the burden cast upon the assured to establish that liis statement was not intentionally false.

Id.—Law of the Case.—Held, accordingly, that it was error in the Court below to instruct the jury that the existence of a discrepancy between the statement of the assured as to his loss, and the actual loss, Would give rise to a prima facie presumption of fraud; but that, as the instruction was in favor of the losing party, it must, perhaps, for the purposes of this case, be accepted as law.

Department No. 1, McKinstry, J.: The fourth clause of the policy contains the following:

“ The application or survey, upon which the issuance of a policy is predicated, shall be considered a part of it, and a warranty by the assured. If the assured, in a written or verbal application for insurance, or by survey, plan, or description, or otherwise, makes any erroneous representation, or omits to make [158]known any fact material to the risk, or overvalues the property, * * * then, and in every such case, this policy shall be void.”

And the eighth clause provides:

“Persons sustaining loss or damage by fire shall forthwith give notice of said loss to this company, and as soon thereafter as possible render a particular account of such loss, signed and sworn to by them, stating whether any and what other insurance has been made on the same property, giving copies of the Written portion of all policies thereon, also the actual cash value of the property. * * * The assured shall, if required, submit to an examination or examinations, under oath, by any person appointed by the company, and subscribe to such examinations when reduced to writing; and, also, shall produce- their books of accounts and other vouchers, and exhibit the same for examination at the office of the company, and permit extracts and copies thereof to be made. The assured shall, also, produce certified copies of all bills and invoices, the originals of which have been lost. * * * All fraud, or attempt at fraud, by false swearing or otherwise, shall cause a forfeiture of all claim on the company under this policy.”

It is claimed by appellant, that inasmuch as there was a discrepancy of five hundred dollars between the sum named in the “ application ” and the verdict, the burden of proof was cast upon the plaintiffs to establish that the statement' in the application was not intentionally false. But under our system, fraud is ordinarily a question of fact, and the Court is not authorized, except where by statute a legal presumption is created, to instruct a jury that the existence of one fact is to he inferred from the existence of another. (People v. Walden, 51 Cal. 588; Stone v. Geyser Co. 52 Cal. 315; People v. Carrillo, 54 Cal. 63.) The jury may not have believed that the application was intentionally false, even in the absence of explanatory evidence.

The same is true in reference to the difference between the statements of the assured, (sworn or unsworn) made after the fire, and the verdict. It may indeed be true that if the discrepancy, in view of all the circumstances, is so great as to

Helbing v. Svea Ins. Co.

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