Susquehanna Insurance v. Perrine

The opinion of the Court was delivered by Gibson, C. J. A regulation established by a by-law is not obligatory on a stranger; and, if the plaintiff were such, he would not be affected by the blunder of the Company’s surveyor, notwithstanding the terms of application prescribed by the conditions of insurance. But the Act of incorporation provides that a party insured shall, ipso facto, be a member of the Company; and on no other plan could a mutual insurance company be constituted, the object of the members being to share each other’s losses for the general weal, and not to bear the risk of losses for a premium. The argument for the plaintiff is that1 he was not a member till the policy was sealed, and ■ that, being' a stranger during the preparatory steps, he was not bound at the time material to the question by the condition which exacts that, in receiving an application -for insurance, the surveyor shall be the agent of the applicant. But the plaintiff was bound to know from the Act of incorporation, ■according to which the Company professed to deal with him, that he was going to become a member of it; and the presumption is that he made himself acquainted with its regulations, including the instructions to surveyors to require a minute and particular description of the property, and “ give the applicant to understand that the surveyor is his agent for that purpose, and that he (the applicant) will be-held responsible for the correctness of the application.” What matters it, then, that it was the surveyor who falsely filled up the application from the full and accurate information communicated by the applicant, when the latter was bound [352] to know that the surveyor was acting in the business as his instrument, and not as the instrument of the Company 1 The case is doubtless a hard one, as the surveyor, who was entii’ely unfit for the place, had been selected for the service by the Company. But then the plaintiff was not bound to employ him. He was at liberty to fill up the application with his own hand, and, had he done so, the printed form would have been an unerring guide. He thought proper, however, to trust to the defective capacity of the surveyor, and it is our business to prevent the hardship of the case from running away with the law. The plaintiff, then, is bound by the application as it was filled up, and it is faulty in a decisive particular. It was made a leading condition that it contain a description, not only of the place, materials, dimensions and construction of the property, but also of “ its relative situation as to other buildings, and distance from each if less than ten rods.” The principal building of the tannery was within twenty feet of the saw -mill; and though its contiguity materially increased the risk as to the whole, that fact was not stated. But it has been argued that as the property was insured entire, the condition has regard, not to particular parcels of it, but to other buildings in the neighbourhood; or, to express it differently, buildings not included in the same policy. That construction rests on a single word, and it is too literal to be sound. The object was to have a disclosure of every material cause of danger, and whether it were internal or external could not be of consequence, provided a greater degree of risk were induced by it. It is that which regulates the premium, and it is therefore important to be known. Besides, it was in clear proof that uninsured buildings were within the distance. There has been, then, a fatal want of compliance with the particular requisite of the conditions, and this makes it unnecessary to examine the other points of defence, further than to say they would probably not be found tenable. The case before us differs from Moliere v. The Pennsylvania Fire Insurance Co. in the important particular that the secretary, who in that case was the agent and man of business of the Company, as a cashier is the agent and man of business of his bank, was the author of the misdescription, if there was one. A Ml, particular and true description of the building had been verbally delivered to him according to the tenor of the Company’s printed proposals and conditions, which did not require it to be in writing ; and in that particular, also, there is another material difference. Nothing required by the conditions, nor anything material to the risk, had been kept back; and from the perfect disclosure thus made, the secretary culled the description with which he thought proper to fill up the order and the policy, calling the building a brick ice-house, without noticing the fact that the brick walls were surrounded by a screen of boards a few feet distant, to protect them from the violent action of the heat or the external [353] aii% For want of a more appropriate designation, he chose to insure this nondescript and its appendage as a brick ice-house; and, as the walls were the principal, while the screen followed them as an accessory, who can say that he did not call it by its name ? But if there were a true representation of every material circumstance, the name would be unimportant; for the parties might, as in fact was done, show the meaning of it by parol evidence, introduced, on a very familiar principle, not to contradict the written description, but to explain a latent ambiguity in it. It was no more necessary to name the screen than it was necessary to name the roof, for each was equally a part of the building; and if the ensconcing of the brick walls in a wooden shelter were calculated to enhance the risk, the evidence was proper to show that it had not been concealed. But the ground on which the cause was put by the Judge who delivered the opinion of the court, seems to me impregnable. A policy of insurance, like any. other instrument, may be reformed for mistake of the scrivener,; and had the Company availed itself-of the accidental misconception of its officer, it would have committed a fraud. But, in the case before us, all was done at the peril of the insured; and the defaults of the surveyor being his defaults, the Company might conscientiously avail itself of them. The jury ought, therefore, to have been told that he was not entitled to recover’. Judgment affirmed.