Clymer Opera Co. v. Birmingham Fire Insurance

Opinion by Poeteb, J., The plaintiff in this action upon a policy of insurance recovered a verdict and judgment in the court below and the defendant appeals. The policy contained a clause stipulating that: “This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void .... if the interest of the insured - be other than unconditional and sole ownership; or if the subject of insurance be a building on ground not owned by the insured in fee simple.” The policy was not based upon a written application by the assured. There was not a scintilla of evidence tending to establish that the assured had been guilty of any fraud or made any misrepresentation as to the title. It appeared at the trial that the subject of the insurance was a building on ground not. owned by the insured in fee simple. The plaintiff company owned the building, but it stood upon ground held under a lease. If this had been the only fact established by the evidence, the insurance would have been invalidated by the express covenants of the policy and the [643] plaintiff would not have been entitled to recover. The plaintiff called three witnesses whose testimony, if believed, clearly established that at the time the insurance was effected and the policy written all the facts as to the nature of the title of the assured had been made fully known to the agent of the defendant company duly authorized by the company to write the policy. The testimony of these witnesses was contradicted by the agent who represented the company. The issue of fact, whether the representative of the company knew at the time the policy was written that the buildings stood upon leased ground, thus presented by the conflicting testimony, was fairly submitted to the jury. The appellant does not complain of the manner in which that question was submitted, but asserts that it ought not to have been submitted in any manner. The contention of the appellant is that the clause of the policy above quoted could only be waived by an agreement indorsed upon the policy. The question presented by this appeal is not whether the company had waived this particular covenant of the policy, but is whether under the facts established by the evidence it was estopped to assert that covenant. Covenants of this character have frequently been passed upon by the courts, held to be valid, and given full effect, unless the assured produced evidence establishing facts which estopped the company to assert the covenant or constituted a waiver of its provisions: Schiavoni v. Dubuque F. & M. Insurance Co., 48 Pa. Superior Ct. 252, and cases there cited. The decisions firmly establish the following principle with regard to the covenant with which we are now dealing. When the policy is issued without a written application and the agent authorized by the company to write the policy knows that one of its conditions is inconsistent with the facts, and the insured has been guilty of no fraud or misrepresentation, the company is estopped from setting up the breach of said condition: Caldwell v. Fire Association, 177 Pa. 492; Damms v. Humboldt Fire Insurance [644] Co., 226 Pa. 358; Porter v. Insurance Company of North America, 29 Pa. Superior Ct. 75. It was admitted at the trial that the agent who represented the company in the present case, was duly authorized by the company to enter into contracts of insurance on its behalf and to write and issue policies. The jury found, upon clearly sufficient evidence, that the representative of the company knew, at the time the policy was issued, all the facts and circumstances having any bearing on the title to the property. This being so the case was clearly within the rule recognized by the decisions above cited, and the defendant company was estopped to assert the covenant of the policy upon which it relied to defeat a recovery. All the specifications of error are overruled. The judgment is affirmed.