Violin v. Fireman's Fund Insurance Company

406 P.2d 287 (1965)

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Nature of the Case

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Facts

The application for insurance contained the following language, 'Signing this form does not bind the Proposer or the Company to complete the insurance, but it is agreed that this form shall be the basis of the contract, should the policy be issued. If any of the above questions have been answered falsely or fraudulently the entire insurance shall be null and void and all claims thereunder shall be forfeited.' One question that was asked on the application for insurance with which we are concerned was, 'Has any company ever refused or canceled insurance?' Ps answered, 'No.' The answer was false. Four years earlier, D, had canceled a policy that it had issued to the same insureds covering musical instruments. D issued the new policy covering a Guadagnini violin for the agreed value of $10,000. When Ps’ answered the insurance application it had a notice that if Ps provided misleading answers to any question, then the insurance contract would be void. A few months later the Guadagnini was lost and Ps submitted a claim. D investigated and then found out that Ps had issues with D some 4 years ago for other instruments and that the older policy had been canceled. Since Ps lied on the application, D rescinded the contract and refunded the premium based on Ps’ material and fraudulent representations. Ps sued D. D showed evidence that different agents had handled the application and insurance 4 years prior for that first canceled policy and that those records were not in the current offices of the agents. D got the verdict and Ps appealed.