Hosford v. Germania Fire Insurance Company/Opinion of the Court

If this policy is valid, each of the defendants was severally liable for no more than the sum of $4,000, and interest thereon to the date of the judgment in the circuit court. The whole amount recoverable against either defendant in that court being less than $5,000, this court has no jurisdiction of the case, except by reason of the certificate of division of opinion. Ex parte Insurance Co., 117 U.S. 367, 6 Sup. Ct. Rep. 772; Dow v. Johnson, 100 U.S. 158; Bank v. Knapp, 119 U.S. 357, 7 Sup. Ct. Rep. 274. The first question certified is too general to be answered, because it undertakes to refer the whole case to the decision of this court. Jewell v. Knight, 123 U.S. 426, ante, 193. Nothing is open for consideration, therefore, but the second and third questions, upon which the opinions of the judges of the circuit court were opposed. The whole scope of that clause of the policy which requires the interest of the assured, if 'other than the entire, unconditional, and sole ownership of the property for the use and benefit of the assured,' or if 'incumbered by any lien, whether by deed of trust, mortgage, or otherwise,' to be so represented by thea ssured and so expressed in the policy, is to ascertain whether his interest comes within either of these two descriptions, and not to call for information as to the nature or amount of any incumbrances. It is therefore fully satisfied by the statements in the application that there is an incumbrance on the property, and what the amount of mortgage is, and by the expression in the policy making the insurance payable to a mortgagee. Williams v. Insurance Co., 107 Mass. 377. By the terms of this policy, and of the application made part thereof, the answers to the questions in the application are doubtless warranties, to be strictly complied with. But this court is unanimously of opinion that, so far as regards either of the matters presented for its decision in the present case, these answers are direct, full, and true. The only questions put as to incumbrances are,-First, the general one, 'Is there any incumbrance on the property?' which is truly answered, 'Yes;' and, second, the particular one, 'If mortgaged, state the amount,' in answer to which the assured states the principal sum due on the mortgage. The effect of omitting to include the additional sum due for less than half a year's interest in not presented by the certificate of division. The insurers having put no question as to the nature or the amount of incumbrances, otherwise than by mortgage, cannot object that no information was given upon that subject. Insurance Co. v. Raddin, 120 U.S. 183, 7 Sup. Ct. Rep. 500. There was, therefore, no breach of warranty in not disclosing the lien for unpaid taxes, independently of the question whether such a lien was an incumbrance, within the meaning of this contract; and this case does not require a decision of that question. As to smoking, the only question put in the application, and answered in the negative, is whether smoking is 'allowed on the premises,'-which looks only to the rule established upon the subject at the time of the application, and not to the question whether that rule may be kept or broken in the future. This appears by the language of the question, as well as by the circumstance that it is not, as other interrogatories at to existing precautions against fire are followed up by compelling the assured to agree that they will continue to observe the same precautions. The jury having found that the assured forbade smoking in the mill, the mere fact that other persons, or even one of the assured, did afterwards smoke there, was not sufficient to avoid the policy. The two cases cited by the defendants from the Illinois Reports contain no adjudication to the contrary. The point decided in each was that smoking by workmen in the mill did not avoid the policy, and the remark of the judge delivering the opinion, that in such a case the assured undertakes that he will not himself do the act, was ''obiter dictum. Insurance Co. v. McDowell'', 50 Ill. 120, 131; Insurance Co. v. Eddy, 55 Ill. 213, 219. Judgment reversed, and case remanded to the circuit court, with directions to render judgment for the plaintiffs upon the special verdict.