## Facts

- Columbia Horse & Mule Commission Company and John Dodd sued American Insurance Company to recover under a fire insurance policy covering mules housed in barns rented by Dodd in or near Dickson, Tennessee.
- A fire destroyed mules in the barns.
- Dodd submitted a claim stating that 43 mules were lost.
- Evidence at trial supported a finding that only 34 mules were actually destroyed.
- The parties submitted special interrogatories to the jury, including whether Dodd willfully set the fire and how many mules were lost.
- The jury found that Dodd did not set or cause the fire and that 34 mules were lost.
- The district court ruled that the discrepancy between 43 claimed and 34 proved constituted willful and material misrepresentation and false swearing under the policy’s fraud clause, voided coverage, and dismissed the action.

## Issues

1. In an action at law on a fire insurance policy, whether the question that an insured’s overstatement in a proof of loss was willfully false and fraudulent is for the court as a matter of law or for the jury as a matter of fact.
2. Whether an overstatement of the number of animals lost, without a jury finding on intent, can void the policy under a fraud/false-swearing clause.

## Decision

- The Sixth Circuit reversed the judgment of dismissal and remanded.
- The court held that whether the insured’s overstatement amounted to willful and fraudulent misrepresentation or false swearing was a factual issue for the jury on this record.
- The trial court erred by treating the overstatement as conclusive fraud and withdrawing the intent question from the jury.

## Legal Principles

- Under a standard fraud/false-swearing clause, voidance of coverage requires proof of willful, fraudulent misrepresentation, including intent to deceive.
- In an action at law tried to a jury, questions of fraud, intent, credibility, and competing inferences from disputed evidence are ordinarily for the jury, not the judge.
- A substantial overstatement in a proof of loss does not, by itself, establish fraudulent false swearing as a matter of law when the evidence permits a finding of mistake or good faith.
- A court may decide fraud as a matter of law only when the evidence permits no reasonable inference other than intentional fraud.

## Conclusion

The Sixth Circuit held that the insured’s intent in overstating the number of mules lost was for the jury to decide and that the district court improperly voided the policy as a matter of law based solely on the discrepancy; the dismissal was reversed and the case remanded for further proceedings.


Columbia Horse & Mule Commission Co. v. American Ins. Co., 173 F.2d 773 (6th Cir. 1949)