
    Sternfeld et al. v. Park Fire Ins. Co.
    
      (Supreme Court, General Term, First Department.
    
    November 23, 1888.)
    Insurance—Actions on Policies—Misrepresentations oe Loss.
    In an action on one of several policies on a stock of goods, the jury found for plaintiff half of the amount of defendant’s policy, to reach which conclusion they must have found the whole loss to be $5,000. The plaintiff in his proofs of loss stated that the value of the property was $23,342.47, and the loss the same. The proofs were based on an inventory made about a year before and after deducting certain goods delivered to creditors, and adding expenditures for purchases and man-
    = ufacture, and deducting sales, a net loss was left of $19,832.72, besides the value of property saved, stated to be $3,509.75, but which the appraisers, appointed according to the policy, found to be $1,968.78. Held that, in the absence of any evidence of mistake or misapprehension, the overstatement of loss was so great as to warrant the inference that the proofs were made with the intent to defraud the company, and that the policy was forfeited, under the clause in the policy providing for forfeiture for misrepresentation in the proof of loss.
    Appeal from circuit court, New York county.
    Action by Adolph Sternfeld and others against the Park Fire Insurance ■Company. Judgment for plaintiffs on the verdict of a jury, and motion for a new trial overruled. Defendant appeals.
    Argued before Van Brunt, P. J., and Brady and Daniels, JJ,
    
      O. E. Bright, for appellant. W. W. Niles, for respondent.
   Daniels, J.

The recovery was upon a policy of insurance issued by the ■defendant, whéreby Vulder 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 number 80 West Houston street, in •the city of New York. Other insurance was obtained upon the same property, amounting, with the policy in suit, to the sum of $10,000. A fire oe.curred 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 Vulder, that a loss had beta sustained upon the property insured, amounting to the sum of $28,342. After the occurrence ■of the fire, proofs of loss were served upon the company, which were verified by De Vulder, 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 an umpire in case of their disagreement. 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 riot destroyed to be the sum of $2,352.74; 'its value after •the fire, $383.95; and the loss on that property, $1,968.79. 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 the 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, according to the proofs of loss, was stated to be the sum of $19,832.72. 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 $35,751.92. From this stock there was delivered to certain creditors in December, 1884, merchandise amounting to the sum of $15,000, and to the residue of $20,751.92 were added what were 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 $19,832.72, besides the loss on the property saved, stated to be $3,509.75, but fixed by the appraisers at $1,968.79.

It was alleged, by way of defense in the action, that De Vulder had fraudulently 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 $750, 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 De Vulder by the fire amounted to no ■more than the sum of $5,000. This left an overstatement in his proofs of loss ■of $18,342.47. To that extent the jury must necessarily have assumed that the proofs of loss were untruthful. Neither the evidence of De Vulder 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 De Vulder 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 De Vulder’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 worth no more than 50 per cent, of the amount for which it was received by the company and for which its stock was issued; and from this difference the court held that the law would assume the transaction to be fraudulent, leaving no question ■of fact as to the intent to be passed upon by a jury. Applying the principle of that decision to this case, and the inference is much more strongly sustained than 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 overstated his loss to the extent of upwards of $18,000; and upon that fact, necessarily entering into the ease, from the verdict 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 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, shall cause a forfeiture of all claim on this company 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 canceled. ” 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, P. J., and Brady, J., concur.  