
    Adolph Sternfeld et al., Respt’s, v. The Park Fire Insurance Company, Appl’t.
    
      (Supreme Court, General Term, First Department,
    
    
      Filed November 24, 1888.)
    
    1. Insurance (fire)—Action on policy—Determination op appraisers— When conclusive.
    This action was brought to recover upon a policy of insurance issued by the defendant Other policies were issued covering the same property, and amounting with that in suit to the sum of $10,000. The policy in suit provided for the appraisement of the damage on all property injured, but not actually destroyed, by appraisers selected by each of the parties, who in case of their disagreement, should themselves select a third. The policy further provided, that any fraud, or attempt at fraud, or any misrepresentation in any statement touching the loss, or any false swearing on the part of the assured, or his agent, in any examination, or in the proof of loss or otherwise, should cause a forfeiture of all claim against the insurers under the policy, and that the insurers in such case should have the right, at any time, to require the same to be delivered up to be cancelled. After the occurrence of the fire proofs of loss were served' upon the insured, verified by the insured, stating the value of the stock to be $28,342.47, and the loss or damage the same. The appraisers selected in the manner provided for in the policy, examined the property insured, and not wholly destroyed, and determined its original value to $2,352.74, and that the damage occasioned by the fire to be $1,968,79. The balance of the property was stated by the proofs of loss to be worth $19,832.72. The jury by their verdict, found in favor of the plaintiff, the assignees of the insured, for the sum of $750, being one-half of the amount of the policy in suit. Held, that the determination of the appraisers appointed in conformity to the provisions of the policy, was conclusive.
    3. Same—Mlsbepbesentatioit nr pboofs of loss—Effect of
    
      Held, that the verdict of the jury necessarily assumed the proofs of loss to be untruthful, and for that reason, in view of the provision of the policy the judgment entered thereon should be reversed.
    Appeal from a judgment entered on the verdict of a jury, and from an order denying a motion for a new trial.
    
      O. E. Bright, for app’lt; W. W. Niles, for resp’ts.
   Daniels, J.

The recovery was upon a policy of insuranee, issued by the defendant, whereby it insured O. De Yulder against loss or damage by fire to the amount of $1,500, on feathers and materials for manufacturing the same, manufactured, unmanufactured and in process of manufacture, and other merchandise not more hazardous-than his own. The property insured was contained in a brick building, known as No. 30 West Houston street, in the city of New York. Other insurance was obtained upon the same property amounting, with the policy in suit, to-$10,000. A fire occurred in the store in the night time, on or about the 28th of August, 1885. The fire was of short duration, but it was alleged on 'behalf of the plaintiffs, who became the assignees of De Yulder, that a loss had been sustained upon the property insured amounting to the sum of $23.342.

After the occurrence of the fire, proofs of loss were served upon the company, which were verified by De Yulder, in which his stock was stated to be of the value of $23,342.47, and the loss or damage on the stock was claimed to be the same amount. An appraisement was afterwards made under a clause in the policy providing for it by the selection of appraisers by each of the parties and the selection by the two appraisers so selected, of umpire in case of their dis» agreement. The appraisers, in this manner selected, examined the property insured and not wholly destroyed by the fire. By their report they determined the original value of this property not destroyed to be the sum of $2,352.14, its value after the fire $383.91 and the loss on that property $1,968.19.

This was held by the court, as it was required to be under the policy, conclusive against the plaintiffs as to the extent of the damage sustained by the property not wholly destroyed by fire. The material controversy in the case was in this manner reduced to the value of the property actually destroyed by the fire, and that acccording to the proofs of loss was stated to be the sum of $19,832.12.

These proofs appear as to their amount to have been based upon an inventory made of the stock and goods in the store in October preceding the fire, when their value is stated to have been $35,151.92. Prom this stock there was delivered to certain creditors, in December, 1884, merchandise amounting to the sum of $15,000, and to the residue of $20,151.92 was added what was stated to have been expenditures made in manufacturing feathers and for other property purchased, and deducting sales made prior to the time of the fire, leaving what was then stated to be a net loss of property actually destroyed by the fire amounting to the sum of $19,832.12, besides the loss on the property saved to be $3,509.15, but fixed by the appraisers at $1,968.19.

It was alleged, by way of defense, in the action that DeVulder had fradulently represented to the company the amount of the loss to be greater than it actually was, and that he had sworn falsely in swearing to the proofs of loss containing these statements. The jury, by their verdict, found in favor of the plaintiffs for the sum of $150, being half the amount of the defendant’s policy. To render this verdict the jury must have reached the conclusion, as the whole insurance did not exceed the sum of $10,000, and it was to be divided and equally proportioned between the companies whose policies were issued upon the property, that the whole loss of DeVulder by the fire amounted to no more than the sum of $5,000. This left an overstatement in his proofs of loss of $18,342.41. To that extent the jury must necessarily have assumed that the proofs of loss were untruthful. Neither the evidence of DeVulder nor that of any other witness tended to explain this difference on the ground of any mistake or misapprehension concerning either of the facts upon which the proofs were made and verified. And as there was no ground from which it could be inferred that the loss had been overstated in this manner by mistake, there was reason for assuming that it had been fraudulently made to defraud the insurance company out of the other half of the amount of the policy. • Such an inference necessarily follows from so great a difference.

The loss in this manner had been stated by the assured to an amount exceeding three-fifths of what had actually. been sustained. And it is not to be supposed or presumed that it could have been so overstated by any mistake intervening in the statements presented by the proofs. But the inference is direct and plainly to be drawn from this difference that DuYulder must have known that his statement was untruthful, and his affidavit verifying it was false, and from that the conclusion follows that it was intended thereby to defraud the insurance company. And this inference is materially strengthened by the fact that the preceding inventory of DeYulder’s stock, taken in January, 1884, amounted to no more than the sum of $20,478.13, and his business afterwards was not prosperous, and the fire causing the loss was of very short duration and confined only to a portion of the store.

In Boynton v. Andrews (63 N. Y., 93), property had been taken by a manufacturing corporation for which it had issued its stock. The property was proven to have been woi’th no more than fifty per cent of the amount for which it was received by the company, and its stock was issued. And from this difference the coux’t held that the law would assume the traxxsaction to be fraudulent, leaving xio question of fact? as to the intexxt to be passed upon by a jury. Applying the principle of that decision to this case, and the inference is much moire stroxxgly sustained thaxi it there was, of an intent to deceive and defraud the company, by this overstatement of the loss of the assured. And that the overstatement existed, is clear from the verdict of the jury, which proceeded upon the conclusion that the actual loss, did not exceed the sum of $5,000. This could have been adopted on no other view of the evidence than that the assured had over-stated'his loss to the extent of upwards of $18,000. And upon that fact, necessarily entering into the case, from the vex’dict which the jury have rendered, they should, instead of finding for the plaintiff any sum of money, have found in favor of the defendant, for the policy had provided that, “Any fraud or attempt at fraud, or axxy misrepresentation in any statement touching the loss, or any false swearing on the part of the assured or his agent, in any examination, or in the proof of loss or otherwise, shall cause a forfeiture of all claim on this compaxxy, under this policy; and in such case this company, shall have the right at any time, to require the same to be delivered up to be cancelled.

And under this provision, this fraudulent overstatement of the loss, forfeited all claim to indemnity, under the policy and entitled the company to a verdict against the plaintiff.

The judgment and order should, therefore, be reversed, and a new trial ordered, with costs to the defendant to abide the event.

Van Brunt, Ch. J., and Brady, J., concur.  