Waring v. United States Fidelity & Guaranty Co.

24 App. D.C. 119, 1904 U.S. App. LEXIS 5308

• Court: Court of Appeals for the D.C. Circuit
• Decided: June 8, 1904
• Docket: No. 1407
• Status: Published

Opinion

Mr. Justice Shepard

delivered the opinion of the Court:

1. Tbe appellant’s first assignment of error relates to tbe exception taken to tbe admission in evidence of tbe mutilated paper, called tbe “employer’s statement,” over tbe objection raised thereto by tbe plaintiff tbat bas been heretofore stated.

Tbe defense to tbe action rested upon the answers tbat were made in writing to tbe questions propounded in this paper, which tbe plaintiff expressly agreed should be taken as “conditions precedent and as tbe basis of tbe said bond;” and tbe argument on behalf of tbe appellant is chiefly directed to tbe question of its admissibility.

Tbe conditions of tbe case do not require us to enter upon tbe consideration and discussion of tbe general doctrine in respect of tbe admissibility in evidence of altered and mutilated instruments, when produced and offered by their custodian in support of his action or defense.

Tbe appearance of tbe instrument under consideration, which bas been brought up for inspection with tbe evidence relating to its preparation and explaining its condition, makes it sufficiently clear tbat tbe mutilation was accidental. Moreover, tbe evidence tending to show accidental mutilation is strongly reinforced by tbe two following considerations: In tbe first place, no possible motive can be inferred for tbe spoliation of tbe instrument by tbe defendant whose interests depended upon it for conservation; in tbe second, tbe contents of tbe missing part were not only proved with certainty, but substantially admitted by tbe plaintiff also, in bis cross-examination.

Tbe employer’s statement was rightly admitted in evidence.

2. Tbe statement, confidence in tbe representations of which induced the defendant to issue the bond, having been properly admitted in evidence, the court could do nothing less than instruct the jury to return a verdict for the defendant.

The materiality of some of the representations is obvious, and the evidence is direct and undisputed. It goes without saying that in all branches of insurance there are certain facts and conditions of which information is essential in determining the assumption of the risk, and the rate of premium to be paid therefor. The knowledge of these is largely, and sometimes entirely, confined to the applicant, and the insurer necessarily relies upon the truth of his representations.

In fidelity insurance nothing could be more important or material in determining the assumption of a proposed risk than the knowledge sought to be elicited through the answers required to be made to certain of the questions propounded in this statement.

Notwithstanding this statement in the certificate accompanying Cook’s application of April 18, 1900, that the accounts of the latter had been examined and found correct in every respect, and that he wqs not then, and had not been in arrears or in default, he was called upon for further specific statements on April 20. In response he stated that he had examined Cook’s accounts on the day of answering, and that there was then and had been no “shortage.” He further answered that he had semimonthly statements from Cook, and accountings with him. Again, he stated positively that the amount of cash that would be in Cook’s hands at one time would be $100 or $200.

By his own admissions, Cook had, or ought to have had, $1,900 when these statements were made, and his own account of advances shows that he thereafter delivered to Cook over $500 at one time. Froih Cook’s receipt, which the plaintiff offered in evidence, it appeared that he had over $7,000 in hand on January 21, 1901.

It is true that this represented, not only the principal sums intrusted to Cook for investment, but also the accumulated interest at the rate of 20 per cent per month; yet the principal must, according to tbe plaintiff’s statement of amounts delivered, have been over $1,800.

It appears also, by his own admissions, that he had no accounting with Cook on either date stated, and that, instead of semimonthly statements and accounting thereafter, there had been none whatever.

Plaintiff had no knowledge of the particular loans or investments made by Cook during the entire period. His system of taking new receipts from Cook, from time to time, and destroying the old ones, was a travesty of the system of accounts and statements evidently contemplated by the defendant in propounding its questions. In the absence of anything to restrict their meaning, “account” and “statement” must be taken as used in their ordinary sense.

The judgment was right and must be affirmed with costs. It is so ordered. • Affirmed.