VII. Proofs of loss; excessive or fraudulent claim.

(Supplementing annotations in 14 A.L.R. 220; 19 A.L.R. 174; 24 A.L.R. 745; 30 A.L.R. 668; and 38 A.L.R. 1129.)

Where, in a policy insuring against theft of an automobile, it is provided that in the event of loss notice shall forthwith be given to the insurance company, and sworn proof made of the claim, compliance with these terms is a condition precedent to any right of recovery upon the policy; under the contract, it is incumbent upon the insured, in the exercise of due diligence, to give notice of his loss within a reasonable time. Gallagher v. American Alliance Ins. Co. (1921) 220 Ill. App. 476.

Under provision of automobile theft policy requiring insured, within sixty days after loss, to render insurer a statement signed and sworn to by him, stating the place, time, and cause of loss, etc., proof of loss is a condition precedent to the right to recover on the policy. Shapiro v. Security Ins. Co. (1926) Mass. 152 N. E. 370.

Insurer does not waive its right to a proof of loss by requiring insured to be examined under oath, nor by having its agents investigate the loss and ascertain whether an agreement as to the amount may be made, and, if not, to have the matter referred. Ibid.

Adjuster, with authority to adjust a loss, may be found to have authority to waive formal proof of claim. Ibid.

In the absence of evidence of actual authority of adjuster, it is to be assumed that he had power to bind the company in the ascertainment of what the damage was, and in adjusting the cost of repairing it. Ibid.

If adjuster is sent by a general agent to investigate and adjust a loss, it is within the apparent scope of his authority to waive proofs of loss and to agree upon the amount of the loss. Ibid.

A provision in the policy that no clause shall be waived except by writing indorsed thereon does not preclude the company from thereafter authorizing a waiver in some other way. Ibid.

Denial of liability, or a refusal to pay, not predicated on the failure to furnish proofs, is a waiver of any objection on that ground. Ibid.

On the issue of waiver, there was no prejudicial error in admitting the examination of plaintiff in attorney's office, signed and sworn to by plaintiff. Ibid.

On the issue of waiver, letter written by insurance company to counsel for insurance and banking department after period allowed for filing proof of loss, relating to appointment of adjuster, and indicating that the company was basing its refusal to pay upon a defense to the case on its merits, while not a waiver in itself, was admissible, as tending to support plaintiff's contention that a waiver of further proof within that period had been authorized. Ibid.

The issue whether the adjuster had authority to make an oral waiver notwithstanding provision in the policy, and whether upon the whole evidence there was a waiver, should have been submitted to the jury. Ibid.

Where policy requires sworn statement of loss to be furnished the insurance company, the burden rests upon insured to prove that such was furnished, or that the company expressly waived such proof; no presumption of the receipt of such proof is raised by the failure of the company to prove

that no such proof has been received by it. Gallagher v. American Alliance Ins. Co. (1921) 220 III. App. 476, supra.

The decision in Wieson v. Automobile Ins. Co. (1924) - N. J. L. —, 126 Atl. 652, set out in the annotation in 38 A.L.R., at page 1130 (to the effect that it was for the jury to decide whether proof of loss was made within the sixty-day period, where a witness testified to delivering proof within such time, but the proof apparently bore a later date; and also to the effect that upon appeal the insurer could not object to the trial court's remark to the jury that there was proof of waiver of the sixty-day limit, where the insurer had not objected to the evidence as to such waiver without its having been pleaded), was affirmed without opinion in (1925) N. J., 130 Atl. 921.

And the case of Collins v. Phoenix Assur. Co. (1924) 215 Mo. App. 683, 258 S. W. 732, as set out on p. 1130 of the annotation in 38 A.L.R. (to the effect that, where the insured relied upon the renting of a car in violation of the terms of the policy, to avoid liability thereunder for the theft of the car, proof of loss signed and sworn to by insured without reading it, stating that the latter had rented the car, was not conclusive as an admission, but that evidence denying the renting should be allowed to go to the jury), was affirmed, upon a second appeal, in (1926) Mo. App. -, 285 Mo. App. —, 285 S. W. 783.

An insurance company issuing an automobile theft policy payable to mortgagee as its interest may appear, and having in its possession all the information which showed the interest of all the parties in the amount sought to be recovered by the mortgagee under the policy, is not entitled to proof of loss by the mortgagor, who has taken out a separate policy in his own name in another company. Thompson v. National F. Ins. Co. (1925) S. D. —, 203 N. W. 464.

Since insured's right to recover for theft of automobile is not affected by previous losses by theft, it was proper to refuse to the insurance company

the right to offer in evidence, in the way of impeachment, proof of the falsity of a statement by insured in his proof of loss that he had. never had a previous loss by theft. Ibid.

Mere overvaluation of automobile insured against fire and theft, in the absence of fraud, is not sufficient misrepresentation to avoid the policy, where the car has been stolen and burned; to avoid the policy, the burden is upon the insurer to establish both the fact of overvaluation and fraud. Bull Dog Auto. Ins. Co. v. Crowley (1926) - Tex. Civ. App.

281 S. W. 622 (evidence examined and held not to establish fraud). In this case, the court further refused to disturb the finding of the trial court, to the effect that the misrepresentation. if any, was not material to the risk, there being evidence to support the finding.

Where car, including equipment, was warranted to have cost $2,600, but insurance company argued that the highest possible figure of cost was $107.50 less, omitting, however, any incidental items of equipment and tires (which might have made up the lacking amount), it was for the jury to say whether there had been a material misrepresentation of cost. Bloom v. Ohio Farmers' Ins. Co. (1926) Mass., 152 N. E. 345.

In Shapiro v. Security Ins. Co. (1926) Mass., 152 N. E. 370, supra, one of the warranties in the policy was that the automobile was secondhand when bought, and that its actual cost to insured, including equipment, was $2,400; it appeared in evidence that insured bought it for $2,200 and immediately expended $200 for new shoes and equipment; the insurance company requested an instruction the effect of which was that the jury, in arriving at their conclusion as to the actual cost of the car to insured, including equipment, could not include amounts paid for replacements and repairs of worn or damaged parts made after insured bought the car. The judge, however, defined "equipment" as meaning such additions as are made to the complete car intended for the safety or convenience

of the owner, and instructed the jury in substance that, if insured did anything to the car necessary to make it a complete car, a running car, either in the way of equipment or additions to it that were fairly necessitated by its condition at the time he bought it, they might consider such evidence in deciding whether the actual cost to the insured, including equipment, was $2,400. It was held that the insurance company had no just grounds for objecting to the judge's definition of the word "equipment," or to his further ruling thereon; that the instruction sufficiently protected the company's rights, and that there was no prejudicial error in admitting the evidence relating to this issue, to the refusal to give the requested ruling in terms, or to the ruling made.

In the case of Shapiro v. Security Ins. Co. (Mass.) supra, it was further held that whether insured had misrepresented to adjuster that the car had never been in collision, and so avoided the policy, and made misrepresentation to insurance company's attorney with respect to renewal of insurance covering the car, were, upon conflicting evidence, issues for the jury, and did not require as matter of law a directed verdict for insurance company.

For evidence of loss or damage, see subd. X., infra.

VIII. Recovery of car as affecting insur

ance.

(Supplementing annotations in 14 A.L.R. 220; 24 A.L.R. 745; and 38 AL.R. 1131.)

If the car be recovered intact, in the same condition as it was before the theft, insured's only damages are expense in recovering the car and, perhaps, in addition, the value of its use during the period between the theft and the recovery. Bankers Financial Corp. v. Canada Acci. & F. Assur. Co. (1923) 53 Ont. L. Rep. 620. In this case the rule was held applicable in the case of insurance against wrongful sale of a car by the conditional vendee thereof. It was held that, while the plaintiffs were entitled to recover the $75, the expenses incurred in recovering the car, they 46 A.L.R.-35.

could recover neither solicitor and client costs incurred by them in defending the unfounded suit brought against them by the person to whom the car had been wrongfully sold, nor their loss upon resale of the car.

If the car were damaged or destroyed while in the custody of the thief, insured's damages would include, also, the diminution or loss of value; and, if it were wrecked and totally destroyed, the insurer would be liable for its value. Ibid.

See also Belleview Trading Co. v. International Indemnity Co. (1926) Minn. 208 N. W. 994, infra IX.

IX. Damages.

(Supplementing annotations in 14 A.L.R. 220; 19 A.L.R. 175; 30 A.L.R. 669; and 38 A.L.R. 1131.)

Where insured is issued a policy insuring his automobile against loss by fire or theft, and the car is stolen, he cannot recover the penalty and attorneys' fees, for failure of the insurance company to pay the loss within the time specified in a statute applicable by its terms only to fire insurance companies. Pennsylvania F. Ins. Co. v. Johnson (1925) Ariz. 237 Pac. 634.

Assessment of $50 penalty and $150 attorneys' fees was proper, however, upon evidence that adjuster inserted false information in proofs of loss to the effect that the car was rented at the time of its theft, so as to defeat recovery under the terms of the policy, and fraudulently induced insured to sign the statement without reading it. Collins v. Phoenix Assur. Co. (1926) Mo. App., 285 S. W. 783.

Under automobile theft policy requiring partial loss to be paid in full, irrespective of the insurable value for a total loss, and making it optional

with the insurance company to return the car, with compensation for physical damage, at any time before actual payment under the policy, where insurer returned the car, which had been stolen, damaged, and with equipment missing, it was proper to allow, as the measure of recovery, the damage or loss on the car, together with the value of the missing equipment, as against the contention of the insurer that recovery could not exceed the difference between the insurable value of the car and its admitted value when returned. Belleview Trading Co. v. International Indemnity Co. (1926)

Minn., 208 N. W. 994.

In an action on an automobile theft policy, admitted by the insurance company in its answer to be an open policy, which is defined by statute as being "one in which the value of the thing insured is not agreed upon, but is left to be ascertained in case of loss," the amount of recovery is not limited to 90 per cent of the list price of the car at the factory, to be reduced if the list price is reduced (as seems to have been provided by the policy), especially where the exhibit relied upon by the insurance company contained the provision that "the value of the automobile is to be determined by the market value or cash value of the automobile at the time of the loss." Christiansen v. Bankers' & Shippers' Ins. Co. (1926) - S. D. 207 N. W. 108.

other elements; but the amount paid for the car by insured's vendor in the used car market of a distant city and some thirteen months prior to the loss, during which time the car had undergone numerous repairs and had been subjected to continual use, was too remote in point of time and place to be admissible on issue as to value of the used car at the time of the loss. Ibid.

Testimony by insured's vendor as to what she received for the car was admissible. Ibid.

Evidence as to the value of an automobile stolen and destroyed by fire, in an action upon a fire and theft policy covering the car, by one who had never seen the car, but who based his opinion upon a table in a book put out by the insurance company as to the value they put on secondhand automobiles of certain makes and models, was properly excluded. Bull Dog Auto. Ins. Co. v. Crowley (1926) Tex. Civ. App. 281 S. W. 622.

The court of civil appeals will not increase the amount of the judgment to the full amount of the policy merely because, in their opinion, the evidence would have sustained a judgment for the greater amount. Ibid.

Where, in an action upon an automobile theft policy, the testimony is wholly divergent as to the cost or value of such repairs and replacements as would put the car in the condition it was when stolen, the trial court's findings as to the amount cannot be disturbed on appeal. Belleview Trading Co. v. International Indemnity Co. (1926) Minn. 208 N. W. 994, supra.

Where the insurance company admitted that, under the terms of policy covering loss or damage to automobile by fire or theft, the amount payable was 50 per cent of $2,397, the list price of the car, but the company's book record showed that the amount of recovery was not to exceed $1,070, judgment for the latter amount, with interest, or $1,155.60, in all, was not excessive, where the car was stolen and found destroyed by fire. Lorenz v. Bull Dog Auto Ins. Asso. (1925) Mo. App., 277 S. W. 596.

A verdict for $2,790 was not so excessive as to indicate prejudice and passion, there being evidence that the car at the time of the theft was worth $3,000, or more, where the policy was for $2,500, with interest amounting to $473, or a total of $2,973, thus showing an allowance of $183 salvage, and there was evidence to show that the car when recovered after its theft and subsequent burning was not worth over $100. Whitcomb v. Automobile Ins. Co. (1926) Minn. 209 N. W. 27, supra.

N. W. 108, supra, the evidence was held sufficient to support a verdict for $550, where there was proof of the purchase price of the car, the time it had been in use, and the testimony of an expert that the car was worth $550 at the time he examined it shortly before the theft, though his valuation of the car at the time of the loss was less than that amount.

A clause in an automobile theft policy excepting from the perils insured against "in any case other than in case of total loss of the automobile described herein, the theft, robbery, or pilferage of tools and repair equipment," does not mean that the company is only liable for the whole automobile when there is a total loss, but means that the company is only liable for the loss of the tools when there is a total loss of the automobile. Ouimet v. National Ben Franklin F. Ins. Co. (1920) Rap. Jud. Quebec 58 C. S. 299, 56 D. L. R. 501.

In determining whether a proceeding following loss of an automobile insured against theft, etc., is an arbitration or an appraisal, the terminology employed by the parties to the submission or agreement, while of importance in construing their agreement, is not conclusive; the nature of the duties to be performed is of more consequence. Searle v. Alliance Ins. Co. [1925] Manitoba L. R. [1925] 4 D. L. R. 378, [1925] 3 West. Week. Rep. 729.

See also Bankers Financial Corp. v. Canada Acci. & F. Assur. Co. (1923)

53 Ont. L. Rep. 620, as set out in subd. VIII., supra.

X. Evidence of loss or damage. (Supplementing annotations in 14 A.L.R. 221; 24 A.L.R. 745; 30 A.L.R. 670; and 38 A.L.R. 1132.)

In an action on an automobile theft policy to recover for the alleged theft of the car, the burden of proof is on the plaintiff to establish by a prepon derance of the evidence that such car was stolen. American Ins. Co. v. Jueschke (1925) 110 Okla. 250, 237 Pac. 585.

This burden of proof is not sustained by the following evidence: On a certain night, the car disappeared from the streets of a certain town to which it had been driven; the conditional vendee of the car, who had theretofore been in possession of the car, was not in the town that night, and there was nothing to show who took the car to the town in question; the plaintiff, the conditional vendor, did not learn of the disappearance of the car until the following morning, when notified by phone of its disappearance; a representative of the company, being notified of the loss, called upon the plaintiff and advised him that the car had been found near another town by the side of a railroad track in a wrecked condition, and that the car had been put there by the conditional vendee; the plaintiff was fur ther advised by the representative who visited him that he was told by the crew of a passenger train that the car was knocked off the track by their train, and that, upon going back and examining the car, they found the engine all broken up; the plaintiff did not see the car after it disappeared, and had no knowledge concerning the same except as he had been informed; investigation by agents of the insurance company showed that the car had been placed on the railroad track, where it was struck by the passenger train. Ibid. Said the court: "This evidence wholly fails to show that the car was stolen, but, on the contrary, the reasonable deduction to make from this evidence is that the car was not stolen, for it is not reasonable to be