No. 12707 – MRS. HENRY E. HARDING and her husband, plaintiffs and appellees, vs. COMMERCIAL UNION ASSURANCE COMPANY, defendant and appellant.
FISHER, J.
Rule Synopsis
The valuation in the insurance policy is conclusive to the parties in the absence of fraud.
Facts
Mrs. Henry E. Harding (insured), with the consent of his husband, took a fire insurance policy on her automobile from Commercial Union Assurance Company (a foreign corporation; insurer), through its local agent, Smith, Bell & Company; the latter filled out the application form which the insured signed. The automobile was later destroyed by fire but the insurer denied the claim on the ground that the application contained false statements and representations. Among others, the insurer claims that it was deceived as regards the value of the automobile and its ownership; it argued that the truthfulness of statements regarding the same was warranted by the insured under its application.
Issue
Should Commercial Union Assurance Co. be held liable?
Ruling and Discussion
Yes. Commercial Union Assurance Co. should be held liable.
The Supreme Court held the insurer liable, finding no fraud on the part of the insured. On the issue of the automobile’s value, the Court held that the valuation in the policy is conclusive as between the parties in the absence of fraud; further, the insured did not warrant the same, noting that it is the insurer’s agent who made out the application. On the issue of ownership, the Court held that the insurer is not in the position to question the validity of the transfer or donation of the automobile from the insured’s husband to her and that in any case, it had the burden of proof to show its invalidity.
Dispositive
Judgment affirmed.