Carnes v. Farmers' Fire Insurance

Opinion by William W. Porter, J., The plaintiffs in this case are mother and son. They were holders of mortgages on certain premises occupied as a store and dwelling by the son. He applied to the agent of the defendant company for a policy of fire insurance to protect his own and his mother’s interests as mortgagees. He paid the premium. With the intention and purpose well understood by both him and the agent, a policy was written naming one, Mary L. Armstrong, as the insured, with the added clause, “ loss, if any, first payable to Mrs. Lydia Carnes and her son, J. W. G. Carnes, as their interest may appear.” The person named as the insured had no participation whatever in the transaction. A fire totally destroyed the premises insured. The plaintiffs notified the agent of the company. An adjuster appeared who examined the premises in company with J. W. G. Carnes; made measurements with a view to figuring the cost of reconstruction; made suggestion of settlement and demanded inspection of the policy. The adjuster then notified Mr. Carnes that Mary L. Armstrong, named as the insured, was the proper person to make out proofs of loss, and that Carnes was not the proper party with whom to make an adjustment. The adjuster, himself, had an interview with Mrs. Armstrong, as did also J. W. G. Carnes. Mrs. Armstrong, having no interest whatever in the subject-matter, did not act in the premises. The plaintiff, Carnes, called upon the agent, who wrote the insurance for the company, more than once in regard to settlement, and was told by him that upon a release from Mrs. Armstrong being obtained, the company would pay. So the matter stood until suit brought. To avoid liability on the contract, the defendant company sets up defenses based upon some of the clauses contained in the policy. It is argued that it was shown that Mrs. Armstrong, named as the insured, was not the “ sole and unconditional ” owner of the premises insured, and that the title was in her and her husband jointly, and that thereby the policy became void. The result of the testimony of J. W. G. Carnes and of Lang, the agent of the company, is that the agent had precedently written an insurance on the property and had information in respect to the title. Carnes says, in chief, that he did not furnish information as to ownership, but on cross-examination, admits that he may have referred to it. He made [641] no formal written application for the insurance. The agent admits that before the interview with Carnes, he understood that the Armstrongs ” were the owners of the property, and that he “ understood from Mr. Carnes that they still owned it.” If the title was in both Armstrong and his wife, and the name of one was omitted from the policy, this omission was a blunder for which the applicant for the insurance was not responsible, since the agent of the company had information in his own possession upon which (as found by the jury) he assumed to act in writing out the policy: Kister v. Lebanon Mutual Ins. Co., 128 Pa. 553; Susquehanna, Mut. Ins. Co. v. Cusick, 109 Pa. 157; Meyers v. Lebanon Mut. Ins. Co., 156 Pa. 420 ; Dowling v. Merchants’ Ins. Co., 168 Pa. 234. It remains, under the seventh assignment, to consider whether under the form of the policy and the testimony, the plaintiffs can sustain their action. The policy names Mary L. Armstrong as the insured. It makes the plaintiffs the payees of the policy “ as their interest may appear.” The two Carnes are not named as mortgagees, but the testimony is conclusive that the purpose of the insurance was the protection of their interest as mortgagees. The appellant asserts that the Carnes are not the insured, but only the payees, to whom the money shall pass after adjustment with the party named as the insured, and that, therefore, the plaintiffs have no right to hold the defendant company upon the policy. The phraseology of the policy makes the payees the persons primarily protected. True, the contract of insurance does not say that the company “insures ” the payees, but it explicitly agrees to pay the payees in case of loss, to the extent to which they may be able to prove interest. The policy contains another clause which fortifies the view that the insurance in this case protects the payees, and shows that the covering of interests other than those of the “insured ” were within the contemplation of the insurer. The clause provides: “ If, with the consent of this company, an interest under this policy shall exist in favor of a mortgagee, or of any person or corporation having an interest m the subject of insurance other than the interest of the insured as described herein,” the conditions of the policy shall apply as they are written, or as they may be affected by conditions attached or [642] appended to the policy. In this case there were no attached or appended conditions or provisions. The “payable to” clause opened the insurance to include the interests of the payees by the consent of the insurer. The terms of the contract of insurance as written, bear the construction, then, that the plaintiffs, although named only in the “ payable to ” clause, are entitled to sue on the contract of insurance to the extent of their interests, in view of the uncontradicted proof that the plaintiffs did not act as agents for the “insured; ” that the party designated as the insured, had no connection with the writing of the insurance, paid no consideration for protection under its terms, has made no demand for payment of the policy, and has by conduct, repudiated any connection with the contract. Further elaboration of this point is unnecessary in view of the discussion and citations contained in the opinion of Judge Willard, in Zehring’s Estate, 4 Pa. Superior Ct. 243. A further matter of defense set up is that the plaintiffs failed to furnish proofs of loss. The adjuster inspected the ruins. He verified the fact that the loss was of a single building and that it was total. He made measurements to determine the cost of reconstruction, and inquired as to the age and past uses of the building. He was in conference at the ruins with Carnes, who was in possession and to whom the policy was issued by the company. He had opportunity to obtain any desired information. He told Carnes that Mrs. Armstrong was the proper party to make out the proofs of loss under the terms of the policy; and, as he says, gave Carnes “ to understand he was not the party to adjust with me on that occasion,” and that “ the insured was not there.” Under these circumstances, Carnes was not in default for failure to present proofs of loss, which he was advised would not be accepted from him. From the facts shown, a waiver of proofs might be inferred: Pennsylvania Fire Insurance Co. v. Dougherty, 102 Pa. 568; Roe v. Dwelling House Ins. Co., 149 Pa. 94; McGonigle v. Susquehanna Mut. Fire Ins. Co., 168 Pa. 1. The last proposition advanced by the appellant is that the court erred in permitting testimony to be introduced to the effect that the plaintiffs’ only knowledge of an intended defense was the assertion, by the agent of the defendant, that a release by Mrs. Armstrong was not furnished. The trial judge [643] incidentally referred to the matter in the charge, but his remarks were explanatory and not injurious to the defendant. In the trial and in the submission to the jury, no proffered matter of defense was eliminated. We are unable to discover any error committed by the court in the conduct of the trial inducing a reversal of the judgment in this case. The matters of defense presented were purely technical. The record before us exhibits a case without vestige of meritorious defense. Judgment affirmed.