Niagara Fire Ins. v. Miller

Opinion, Me. J ustice Paxson : This was an action of assumpsit upon a policy of insurance. The policy contained the following warranty: “ The assured by the acceptance of this policy hereby warrants that any application, survey, plan, statement, or description connected with procuring this insurance, or contained in or referred to in this policy, is true and shall be a part of this policy; that the assured has not overvalued the property herein described, nor omitted to state to this company information material to the risk. And this company shall not be bound under this policy by any act or statement made to us by any agent or other person which is not contained in this policy, or in any written paper above mentioned.” There is nothing in the record to indicate that the claim was not for an honest loss. The company defended upon two grounds, («) that at the time of the application for the insurance the personal property insured was under levy and execution on a judgmént against the plaintiff, which he failed to disclose to the company’s agent at the time the insurance was effected; and (5) that the plaintiff stated that there were judgments against him to the amount of <$500, when in fact judgments existed to the extent of $1,500, which were a lien on the insured real estate. These objections were based upon the allegation that the facts referred to increased the risk, and had they been disclosed to the company a larger premium would have been demanded. It will be noticed that the warranty is not in terms a warranty against incumbrances, nor did the policy contain a clause that the insurance should cease in case the property in ques [516] tion should be levied upon or taken in execution. The fact was that the goods insured were not taken out of the possession of the plaintiff by the sheriff. Was the insured bound to communicate the fact of the execution to the company ? If it increased the risk and the plaintiff knew that it increased it, we think it was his duty under the clause of the policy which we have referred to, to have notified the company, and upon his failure to do so, he would not be entitled to recover. But what was there in the mere fact of the paper levy to inform the insured that the risk was thereby increased ? The goods still remained in his possession, and unless he contemplated some fraud, which we are not to presume, or unless there was something in the policy to warn him that the company regarded a levy as an increase of risk, how can we say that he was bound to know that it was increased? We have held in Lebanon Mutual Insurance Company v. Losch, 109 Pa. 100, and in Rife v. the same company, 115 Pa. 530, that unless the assured has knowledge that a particular fact will increase the risk, he is not bound to report such fact to the company. Were we to sustain a contrary doctrine it would make a clause like the one referred to in this policy, a mere device to delude ignorant people. It is not to be presumed that the average man or woman who seeks to protect his or her property by insurance is an expert in the science of insurance, especially upon that branch of it which refers to the increase of risk. It is a very simple matter for the company to inform the assured by the terms of its policy or other-wise, what it regards as an increase of risk. The only remaining point is the matter of the incumbrances. There was not, as I have before observed, a distinct warranty against incumbrances. The warranty was against untrue statements in the application. It is not denied that the incumbrances exceeded the amount there stated by the insured. Whether it was by accident, ignorance, or design does not appear. The court below charged the jury, and this is the main contention here, that this avoided the policy at the election of the company, but that the latter could waive the right to avoid it, and submitted the question of waiver to the jury, who found against the company. I do not think that the mere fact of the company’s calling [517] upon the assured to furnish the preliminary proofs of loss as required by the policy, would of itself be a waiver of the company’s right to avoid the policy. Cases might arise where such proofs might be necessary to enable the company to show the breach of warranty. There must be an intention to waive a forfeiture by notice or acts inconsistent with acts exercising the right to forfeit: Diehl v. Insurance Co., 58 Pa. 443; Buckley v. Garrett, 47 Pa. 204. The case was not submitted to the jury upon the narrow ground that the mere fact of calling for proofs of loss was such a waiver. There was a great deal more in the case than this. There was testimony that Mr. Moore, the agent of the company who placed the risk, was told by the assured that there were $500 or $600 of judgments, and there might be more, and that he, the agent, should see the prothonotary about it; that the company before the proofs of loss, and with full knowledge of the incumbrances, not only called for proofs of loss, but required the assured to furnish full plans and specifications of the building destroyed, which were made out by the assured’s architect and forwarded; that it also joined in the appointment of appraisers ; “that up to this time, although nearly a year had transpired, and though the time limited by the policy within which to bring suit was one year from the date of the fire, no objection was stated ox made that in the least informed the plaintiff on what grounds, if any, the defendant objected to payment; that he was led on by letters suggesting more formal proofs of loss and specifications from time to time ; and, when letters were received, he was not informed of any defect, though he asked to be informed what, if any, objections there were.” It is difficult to see how the learned court below could have avoided the submission of such matters as these to the jury. If believed by them they fairly amounted to an estoppel. The company was' bound to good faith to the assured, and if, with the knowledge in its possession of every fact upon which to avoid the policy, they misled the plaintiff for nearly a year, subjected him to the expense of procuring plans and specifications of his building, and never informed him that they would not pay because the policy was avoided, they have no ground to complain if they are now held to be estopped from setting up such a defence. [518] I find nothing to conflict with these views in any of onr decided cases. On the contrary, I find much to sustain them. The case in hand, however, stands to some extent upon its own facts, and for this reason I have considered a discussion of the cases cited unnecessary. Judgment affirmed.