Witmer v. Royal Insurance

Opinion by Porter, J., The policy of insurance upon which this action is founded contained the following clause. “In the event of disagreement as to the amount of loss the same shall, as provided above, be ascertained by two competent and disinterested appraisers, the insured and this company each selecting one, and the two so chosen shall first select a competent and disinterested umpire; the appraisers together shall then estimate and appraise the loss, stating separately sound value and damage, and failing to agree, shall submit their differences to the umpire; and the award in writing of any two shall determine the amount of such loss.” After the fire the plaintiff promptly notified the defendant company of the loss and a short time thereafter one L. G. Owrey appeared upon the scene, representing himself to be an adjuster for the defendant company and being unable to agree with the plaintiff as to the amount of the loss a written agreement was entered into, under the provisions of the covenant above recited, naming the appraisers selected by the parties, respectively, and empowering them to select an umpire, and providing that they should determine separately the sound value of the property and the damage thereto caused by the fire, in accordance with the terms of the covenant. This agreement was signed by the plaintiff and by Owrey, as adjuster for the defendant company. The appraisers agreed upon the umpire and after an examination of the property made an award in writing finding the amount of the sound value of the property and the damage resulting from the fire, which award was signed by both of the apprais [17] ers and the umpire. The plaintiff was dissatisfied with the award and brought this action to recover an amount in excess thereof. He recovered a judgment in the court below, from which the defendant appeals. The court below refused to admit in evidence the award of the appraisers above referred to, upon the ground that there was no sufficient evidence of the authority of Owrey to bind the defendant company by the appraisal agreement, and held that, the company not being bound, the plaintiff was not concluded by the award. The policy contained this covenant: “In any matter relating to this insurance, no person, unless duly authorized in writing, shall be deemed the agent of this company.” This covenant seems to have had great weight with the court not only in the ruling above mentioned, but in other rulings upon evidence which will hereinafter be referred to. That an insurance company may waive a condition in a policy by parol, although it contains a stipulation that there shall be no waiver of any condition except upon an express agreement endorsed'on the policy, must now be accepted as the law of Pennsylvania: Todd v. Quaker City Mutual Fire Insurance Co., 9 Pa. Superior Ct. 371; Flannery Bros. v. State Mut. F. Insurance Co., 175 Pa. 387; Fritz v. British America Assurance Co., 208 Pa. 268; Bush v. Hartford Fire Insurance Co., 222 Pa. 419. Owrey was called as a witness and testified that he was an adjuster in charge of the Harrisburg office of the General Adjustment Bureau, a New York corporation ; that he received instructions from the manager of the business of that company, in the eastern Pennsylvania department, to investigate and adjust the loss in question; that he took the matter up with the agent of the defendant company at Lancaster and, having ascertained the location of the property, met the plaintiff and proceeded to adjust the loss, entering into the agreement for an appraisal, as hereinbefore stated. A letter from the assistant manager of the defendant company to .the [18] agent of that company at the City of Lancaster, bearing date prior to the execution of the appraisal agreement, was offered and received in evidence, which letter referred to the Witmer loss and distinctly stated that “the investigation and adjustment of the claim has been referred to- the General Adjustment Bureau.” This being a letter received in due course of correspondence upon the subject of this loss and this policy, and followed up by a visit from a representative of the General Adjustment Bureau, named in the letter as the corporation to which the adjustment of the loss had been referred, it was certainly proper to show that Owrey was the representative of the General Adjustment Bureau and was by that company authorized to act in the matter: Roe v. Dwelling House Insurance Co., 149 Pa. 94. The learned judge of the court below, upon objection by the plaintiff, declined to permit the witness Owrey to testify as to the manner in which losses of this character were adjusted. The question clearly indicated that its purpose was to disclose the relations between the General Adjustment Bureau and the insurance companies for which it acted, in the adjustment of losses. This ruling was erroneous. The evidence had a direct bearing on the relation in which Owrey stood toward the defendant company when he signed the appraisal agreement. In a dispute of this character testimony as to the circumstances in which the parties acted is always admissible. The second specification of error is sustained. The defendant offered to prove, by a witness on the stand, that the General Adjustment Bureau is a Hew York corporation, of which the defendant company is a stockholder; that the province of the General Adjustment Bureau is to act for their stockholders and adjust losses; and that they have authority to do everything for their stockholders in connection with the adjustment of losses, including the signing and entering into of appraisal agreements; this to be followed by proof, from letters, that the matter of this- loss was referred to the [19] General Adjustment Bureau, to adjust. The court sustained an objection to this offer. We cannot assume that the evidence which it was proposed to produce under this offer was mere hearsay. The arrangement, that the General Adjustment Bureau should adjust all claims for losses made against the defendant company may have been founded in an oral agreement, at the making of which the witness was present. The single letter which was subsequently admitted in evidence clearly indicated that the adjustment of this particular loss had been referred to the Adjustment Bureau. The third specification of error is sustained. The letter of the defendant company to its agent at Lancaster would, in case the award of the appraisers had been more favorable to the plaintiff and he had been seeking to sustain that award, have been sufficient evidence to warrant a finding that the defendant company had authorized the General Adjustment Bureau to adjust the claim. The refusal of the court below to permit Owrey to testify as to the manner in which the General Adjustment Bureau carried on its business excluded all evidence as to whether Owrey was by that company authorized to adjust this loss. That condition of the evidence naturally led the court below to the conclusion that the award of the appraisers was not admissible. As the case must go back for retrial, that broken link in the chain of evidence will no doubt be supplied. The assignments of error which refer to the opinion of the court in refusing a new trial, in view of what we have hereinbefore said, it is not now necessary to discuss. It is, however, proper to say that we find nothing in the evidence which, in case the award had been admitted, would have warranted the court in holding, as matter of law, that it must be held to be invalid because of any mistake or misconduct upon the part of the appraisers: Liverpool, Etc., Insurance Co. v. Goehring, 99 Pa. 13; Hostetter v. City of Pittsburgh, 107 Pa. 419; Commercial Union Assur [20] anee Co. v. Hocking, 115 Pa. 407; Ketcham v. O. F. H. Association of Reading, 59 Pa. Superior Ct. 213. The judgment is reversed and a new venire awarded.