FIRE INSURANCE.

Dominion, Volume 3, Issue 842, 14 June 1910, Page 2

FIRE INSURANCE.

AN IMPORTANT CASE DECIDED, THE CLAIM SUCCEEDS. A case involving some important questions relating to fire insurance was decided by the Chief Justice (Sir liobert Stout) in the Supreme Court yesterday. Hearing of the case—Mrs. Emily Ada Prosser versus the Ocean Accident Guarantee Corporation, Limited—occupied three days, the clntm being for the sum of .£l7O on an insurance policy for .£IBO. It, was shown that a (ire had occurred in premises in Cambridge Terrace on August 20 last, destroying Mrs. Prosser's furniture, which was covered by the insurance policy. The insurance company having declined to pay upon the policy, Mrs. Prosser brought the action, with a view to recovering upon her loss. The defence put forward included a charge of arson against Mrs. Prosser,. and also a charge of fraud—that Mr. Prosser, havinc had two fires at Kilbirnie, transferred the furniture to his wife, for the solo purpose oi getting a policy in his wife's name, and that Mr. Prosser was guilty of misrepresentation, when filling up the proposal for insurance, on behalf of his wife, in not giving information regarding his own previous outbreaks of fire. Mr. P.' J. O'licgan appeared for Mrs. Prosses, and Mr. T. M. Wilford for the insurance companny.

Five Defences. In deciding Iho case the Chief Justice remarked that there were five defences: (1) That the goods destroyed were not Mrs. Prosser's goods; (2) that false answers were given to questions put in the proposal for insurance, and that therefore the policy was void; (3) that Mrs. Prosser omitted'to state certain things that she ought to have stated, namely, that hi>t husband had been insured and that a fire had occurred in his shop, the goods in which were insured, and that his policy had been cancelled; (4) that Mrs. Prosser made a false claim—that she claimed for a sewing machine that was not injured in the fire, and tor goods saved from the fire; and (5) that the fire was wilfully caused by the plaintiff or by her inducement. Husband-to-Wife Transfer. Dealing with the several defences in order, his Honour said that the evidence of Mrs. Prosser that she had paid for the goods insured, and that they belonged to her, was not disputed fiy the evidence for the insurance company. The Court was asked to draw an inference, from her conduct and from the conduct of her husband, that■the goods were not hers but her husband's. So far as some of (he goods were concerned, there was no doubt that they were her husband's and in her hnsband's name. This was the case with reference to some of the goods in the shop, forming a small part of the amount insured, namely .£3O. The main dispute arose over a sewing machine, which machine, if purchased by Mr. Prosser, was not paid for by him, and the evidence of Mrs. Prosser was that she made the payments, and that her husband gave over the machine to her. Mrs. Prosser and her daughter were both earn-' ing good wages' in factories, and some of the money earned by them went towards purchasing, part of the goods insured. There was no evidence against Mrs. Prosser's statement that the goods were hers, and his Honour coulU not discredit her evidence and say that tho tomture and stock belonged to Mr. Prosser. Regarding the Proposal. As to thn second ground of defence, three answers in the proposal for insurance were complained of. The first question in the proposal was: "When was the last stock-taking, and amount?" and the answer was "October i, .£233." This question was inapplicable to an insurance of household furniture. The question as to stock-taking was a question that only arose in the conduct of the business, and it-was welUknown to the insurance company what was being insured, and that the question as to stocktaking was inapplicable to the insurance proposed. .Mr. Prosser said that he meant, by this answer .(which he gave as his wife's agent), that there, had been a list made .of the goods and a value put upon them, and that the amount .of tho value was .£233. His Honour did not think that this could lie said to be untrue, because the inspector inspected and valued, the property on behalf of the insurance company, and his valuation on October 17. was ,£2lO. His. Honour did not think; therefore, that as far as this answer was concerned, it could be said that a false answer was. given. The next question, complained of was: "Have the applicants, either collectively or individually, and if individually, either alone or in conjunction with other persons, ever had a fire loss, or '' made a claim for fire loss vipon an insurance company, and, if so, upon what, company?" and the answer was "No." The application for insuranco was an application from Mrs. Prosser, and, so far as she was concerned, there was no evidence that she had ever insured before, ever asked to insure, or over had a fire loss. Her husband, however, had had a fire loss, had had some of the same goods insured, and had had his policy cancelled. Was her answer, therefore, untrue? His Honour was of opinion that it could not be said to be untrue, and this was the view taken of a similar question by the Privy Council. The third question was: "Has the risk been offered to or declined by any other office?" and tho answer was "No." The contention was that "the risk" meant "the goods," and that, as a policy of insurance of some of the goods whilst they were owned by the husband, had been declined, therefore the risk proposed by Mrs. Prosser had been declined. His Honour was of opinion that he could not so read the answer. Goods might be offered for insurance by au owner and declined. If the goods passed to another owner, and he was asked if the risk had been declined by any office, he would bo giving a true answer, so far as he was concerned, if he snid "No." His Honour did not think the question meant to ask whether, whilst some of 'the goods belonged to somebody else, any insurance company had declined to insure. His Honour was, therefore, of opinion that, so far as these three questions were concerned, it could not be said that they were untrue. Therefore, in his Honour's opinion, this defence was false. An Over-Valuation. As to the false claim, it appeared that , there was a claim for a sowing machine (£i), which had not been destroyed by fire, end was still on the premises. It also appeared that two boxes were removed from tho fire, and, if it had been proved clearly that these boxes had contained goods of any value, and that the knowledge of the removal, of these boxes had been (as, in fact, it was) kept from the insurance company, that would have been evidence of fraud in making the claim, and the policy would have been, void. The evidence, however, did not satisfy his Honour that the goods in the boxes' were goods that were insured, or that the poods were of any value. The question was whether the inclusion of the sewing machine vitiated the claim. It had been laid down in several cases that a mere over-valuation or mistake was not sufficient to vitiate a claim, and the mistake in this case was discovered subsequently, the amount (£7) beinj; then deducted. Arson: "Suspicions Are Not Enough." The next defence, said his Honour, was that the fire was wilfully caused by Mrs Prosser, or by someone induced by her to set fire to'the house. It was clear that where the plea of arson was Taised, the onus of proving arson rested on the defendant, and that the defendant must Rive, as satisfactory evidence of the alleged arson as if there had been an indictment for arson against the plaintiff. Suspicion was not enough; even if Hit evidence was doubtful, this was not onough. There were many suspicious circumstances connected with this fire, continued the Chief Justice. First, it aplisared to have broken out in a part of tho building where, if Mrs. Prosser's evidence was correct, there was nothing inflammable. If, however, the evidence of Mr. Brown (a lodger) was true, there 'were keroseno tins under the staircnfi-, and yet no mineral oil was used for lighting in the house. Further. Mrs.. Prosser's daughter was not called,' and how

she could hare got out through the fire had not been explained. There were various other things which, if the witnesses called for the defence were witnesses for truth, pointed to wilful fireraising. His Honour was of opinion, however, that the evidence was not sufficient to warrant a Court in finding that Mrs. Prosser had committed arson or procured this crime to be committed. Suspicions were" not enough, for, as had often been said, the crime must be proved as completely as if the plaintiff had been charged with arson. Company's Defence Fails, In his Honour's opinion, therefore, the defencß in the action failed. However, there were many circumstances in the case which showed that the case was properly defended, so that Mrs. Prosser should be called upon to prove her case before a Court. The Court, in this case, oould be guided only by. the claim put in. It amounted to £110, made up of machines .£3O, fixtures £5, stock ,£2O; and the balance furniture and other goods. In this claim, however, there was an error in addition of .£5 11s. The amount of the list was pnt down at .£lls, whereas, in fact, it amonnted to only ,£lO9 9s. Then, in the list, there was a claim for three machines—one of which was uninjured, and its value (£1) must be deducted. The total amount Mrs. Prossei was .entitled to was, therefore, .£l7O, less .£l2 11s., namely, .£157 95., for which judgment would be given, with costs to scale, and seven guineas costs for the 6econd day.