The Citizens Fire and Marine Ins. Co. v. Short.

instruction. For, although it was stipulated in the policy in this case, that, if there was an "overvaluation" of the property insured "this policy shall be void," yet it cannot be said, as matter of law, we think, that the mere overvaluation of the insured property, however gross it might appear to have been, was necessarily and conclusively wilful and fraudulent. The instruction utterly ignores the fact that the appellee might have been mistaken, grossly even, yet honestly, in his valuation of his buildings, upon which he sought insurance. It is not uncommon nor unnatural for the owner of property to entertain, honestly, more enlarged views of the value thereof, than perhaps he would if he had no proprietary interest therein. It seems to us that the overvaluation of insured property, though to third persons it might seem to be gross, would not and ought not to avoid the policy, unless it appeared to be wilful, false and fraudulent. If the overvaluation was gross, that fact might properly be considered by the jury as evidence, but not as conclusive evidence, of the wilful, false and fraudulent character of the overvaluation.

In the case of Franklin Fire Insurance Co. v. Vaughan, 2 Otto, 516, the Supreme Court of the United States approve of this statement of the law, on the subject of the overvaluation of the property insured, by the party insured:

"The law exacts the utmost good faith in contracts of insurance, both on the part of the insured and the insurer; and a knowing and wilful overvaluation of property by the insured, with a view and purpose of obtaining insurance thereon for a greater sum than could otherwise be obtained, is a fraud upon the insurance company that avoids the policy. **It is a question of good faith and honest intention on the part of the insured; though he may have put a value on his property greatly in excess of its cash value in the market, yet if he did so in the honest belief that the property was worth the valua-,

and

The Citizens Fire and Marine Ins. Co. v. Short.

tion put upon it, and the excessive valuation was made in good faith, and not intended to mislead or defraud the insurance company, then such overvaluation is not a fraudulent overvaluation that will defeat a recovery."

This, we think, is a correct statement of the law on the subject now under consideration; and therefore we hold that the court did not err in refusing to give the jury the sixth instruction, asked for by the appellant in this case. The appellant's counsel complain, in this court, of the action of the court below, in reading to the jury from the "Chicago Legal News," and from "May on Insurance,' as instructions, after the appellant had requested written instructions. It would seem from the briefs of the learned counsel of both the appellee and the appellant in this court, that, in giving the instructions complained of, the circuit court had probably read to the jury the extracts from the "Chicago Legal News," and from "May on Insurance," without having transcribed those extracts into its written instructions. The record, however, does not disclose any such state of facts, but indeed the very reverse; and to us the record imports "absolute verity." It appears from the record, that the court "further gave instruction No. 9, in which the court read to the jury an extract from the opinion of the court, in the case of The Franklin Insurance Company v. James S. Vaughan, from the Chicago Legal News, which is in the words and figures following" and then followed the extract in writing. The record then proceeds: "To the giving of which said. 9th instruction, marked A, and the reading of said extract to the jury, the defendant at the time excepted." This extract from the record does not show, that the court. read to the jury, from the Chicago Legal News, the extract set out; nor that said extract was not transcribed from said Chicago Legal News into the instruction, and was not read from the manuscript to the jury. The record brings VOL. LXII-21

1

The Citizens Fire and Marine Ins. Co. v. Short.

before this court, in manuscript, an extract from the Chicago Legal News, as the 9th instruction of the court to the jury; and this instruction, in manuscript, is followed by the statement of the appellant's exception: "To the giving of which said 9th instruction, marked A, and the reading of said extract to the jury, the defendant at the time excepted." It will be observed, that the exception is not to the reading from the Chicago Legal News, but to the reading of an extract, in manuscript, as the record shows, from said Chicago Legal News. The same remarks will apply, with equal force, to the extract from "May on Insurance," which constituted the 10th instruction of the court to the jury, and which was complained of by the appellant's counsel on precisely the same grounds. The same language is used in giving this extract to the jury, and in saving an exception thereto; and we cannot say therefrom, that the court read from the book the extract referred to, as an instruction to the jury, without having the extract transcribed into the written instruction. Indeed, as before stated, we think that the record discloses the very reverse of any such state of facts, and we are governed by the record.

This objection of the appellant's attorneys to these instructions of the court does not apply to the law as stated therein, but merely to the form or mode in which they were given to the jury. The objection must, therefore, be regarded as purely technical. Such an objection must be formally and technically sustained by the record, or it will not be favorably entertained and acted upon by this court. In this case the record does not show, by any fair construction, that the instructions were read to the jury without having been first transcribed from the legal newspaper and book as written instructions. Until the contrary affirmatively shown by the record, we are bound to presume, as we do in this case, that the circuit court

gave

is

the

The Citizens Fire and Marine Ins. Co. v. Short.

jury instructions in writing, as requested by the appellant. The appellant's learned counsel have not complained very earnestly of the law as stated in either the ninth or tenth instruction. The extract from the "Chicago Legal News," which constituted the ninth instruction, is the same extract precisely, word for word, which we have already set out in this opinion, from the same case as reported in 2 Otto, 516. We have stated in that connection

that this extract contained a fair statement of the law on the subject of overvaluation, and we also think that it was applicable to the case made by the evidence.

The tenth instruction was an extract from section 373 of 'May on Insurance," and was as follows:

"But an overstatement of the value of the property for insurance upon which application is made, will defeat the policy, whether there be any condition or stipulation in the policy to that effect or not. It is a material fact in that it is of importance that the insured should be inferested in the protection of the property. The smaller the amount of the insurance, therefore, the stronger his interest in the protection. The probable loss, in case of the destruction of the property by fire, is the incentive to vigilance in the protection of the whole, as well that which is covered by the policy as that which is not; for whatever threatens the interest of the insurers threatens also the interest of the insured. But the law will not here interest itself in trifling discrepancies and insignificant dif ferences, such as may be readily accounted for by that natural tendency to overestimate which self-interest always engenders. The overvaluation, in order to work a forfeiture of the right of recovery, must be a clear one; so clear that it is obvious at a glance, and can not be accounted for upon the principle that every man is naturally prone to put a favorable estimate upon his own. It is not necessary that the overvaluation be intentional and fraudulent to

The Citizens Fire and Marine Ins. Co. v. Short.

have the effect of vitiating the policy. The effect is the same if it be done by mistake, and overvaluation by the agent is imputable to the principal. It is usual to provide that fraudulent overvaluation shall avoid the policy; and, in point of fact, whether the provision be against fraudulent overvaluation or simply overvaluation, it is of but little moment. For no overvaluation but a gross and clear one, and such as is or must be presumed to be known to be such by the insured, and therefore false and fraudulent, will in either case be held to vitiate the policy; and such a one will avoid the policy whether provided against

or not."

We are clearly of the opinion that the appellant can not justly complain of this tenth instruction. It states the law on the subject of overvaluation more strongly in favor of the insurance company than we think the law will warrant. In our opinion the overvaluation must be knowingly false and fraudulent, or it will not have the effect of vitiating or avoiding the policy; and so, we think, the learned attorneys of the appellant must have understood the law when they averred, in the appellant's answer, "that, well knowing the premises, the plaintiff, fraudulently intending to cheat and defraud said defendant, wilfully, falsely and fraudulently stated to the agent of the defendant" the overvaluation complained of. The instruction is complained of as misleading; but it seems to us, that, if the instruction might possibly mislead at all, it would be in the direction and favor, and certainly not to the prejudice, of the appellant, and of such misleading the appellant can not be heard to complain.

The third cause assigned for a new trial was error of the court in admitting the testimony of C. D. Clark, a witness for the appellee, to impeach the testimony of Mrs. Ewing Jarrett and to contradict her deposition. It ap pears from the record, that, on the trial of this cause, the