Franklin Fire Ins. v. Coates

Bartol, J., delivered the opinion of this court. The several questions presented by this appeal may be slated in the three following propositions: 1. Was the preliminary proof, required by the 8th condition of the policy, waived by the appellants ? 2. Had the appellees any iusurable interest in the property named in the policy ? 3. Was there, in obtaining the insurance, any misrepresentation or concealment of facts material to the risk, which renders the policy void ? These propositions will be considered in the order in which they have been stated. 1. The testimony of Mr. P. II. Smith, the agent of the company, is, that a day or two after the fire, George G. Davis, who had obtained the policy, called at the office of wit — 294 — ness, anti informed him that the houses had been destroyed by fire, and demanded the amount of the loss, stating, at the time, that the said buildings belonged to him, Davis, and not to Coates & Glenn. The witness then informed Davis that the defendant had insured Coates & Glenn’s property, and not the property of Davis, and that the defendant was not upon the risk, if the property insured and burned was the property of Davis, and that the defendant would not pay the loss to said Davis. That some day or two afterwards, one of the plaintiffs called upon the witness and asked for payment of their loss upon the buildings mentioned in the endorsements upon the policy, and that witness informed the plaintiff that the defendants had, by their policy, insured the property of Coates & Glenn, and not the property of George C. Davis, and that the property which had been insured as the property of Coates & Glenn, in said policy, was the property, not of Coates & Glenn, but of George C. Davis, as he, the witness, had learned from Davis since the fire, and that the defendant was not upon the risk, and would not pay the amount of the loss. That the plaintiff admitted that the houses insured were the property of Davis, and witness never afterwards heard from either of the plaintiffs, or from Davis, in regard to the loss. Upon cross-examination the witness stated, that both upon the application of Davis and of one of the plaintiffs, for the amount of the loss, the witness stated to both of the applicants that the defendant was not upon the risk, and would not pay the amount of the loss; that the defendants had, in their policy, insured plaintiff’s houses, and not Davis’, and that witness would probably-have refused to receive any preliminary proof of said loss, if any had been offered to him; that no preliminary proof was offered to him; that the time for preliminary proof had not arrived, as it was only a day or two after the fire, and nothing was said by any one about it, but that if it had been offered, he thought he would have refused to receive it, the case being too clear in favor of the defendant not being on the risk, to receive preliminary proof of the loss. The witness further-stated, upon reflection, that if preliminary proof of the loss had been offered to him, as agent of the defendant, either by Da — 295 — vis or the plaintiff, who called ou him, he would probably have received such proof and transmitted it to the company in Philadelphia, as his duty probably required. The witness, on cross-examination by the plaintiffs’ counsel, then testified that he told the plaintiff, who called on the occasion after the fire, mentioned in his examination-in-chief: “The company won’t pay. They are not on the risk. The witness added: “The position 1 took precluded the offer of preliminary proof on their part. I took the ground we had nothing to do with it.” This proof, in our opinion, dearly shows a waiver by the agent of the company, of preliminary proof. In the case of Allegre vs. Insurance Co, 6 H. & J., 408, a letter from the defendant, in which it was stated, “the company decline the payment, under a persuasion that the company are not answerable for the same,” was a waiver of further preliminary proof. On page 433, the court say, “If they intended to refuse payment of the loss because the invoice, a customary part of the preliminary proofs, had not been laid before them, it was their duty so to have informed the insured, and their failure to do so, and the writing of such a letter, was a waiver of all further preliminary proofs.” Applying the principle there decided, to the present case, we think the seventh prayer of the defendant was properly refused. 2. The second question for our consideration is, whether the appellees had an insurable interest in the property named in the policy ? The evidence shows that the property belonged to George G. Davis, and not to the appellees. Davis held, both at the time of the insurance and of the fire, the whole estate, legal and equitable. The interest of the appellees in the premises, and for the loss of which they claim compensation under the policy, arose as follows: They were lumber merchants. Davis, a carpenter, purchased from them lumber for the purpose of building the houses mentioned in the policy. Being unwilling to furnish him the lumber upon his mere credit, it was agreed between them and Davis that he would insure, for their benefit, the lumber as they might furnish it, and the houses as the — 296 — lumber might, by degrees, be worked into them, or employed in their construction, so as to protect them, by said insurance, to the value of the lumber which (hey might so furnish. This arrangement was not communicated to the insurers. The policy was obtained by Davis, in the name of Coates & Glenn, and the insurance was first upon the lumber, and afterwards upon the two dwelling-houses. The lumber was furnished to Davis, and used by him in the construction of the houses, during a period extending from the 2d of August to the 29th of November 1847. On the 9th or 10th of January, before the buildings were finished, they were entirely destroyed by fire. In our opinion, both at the time of the making of the policy and of the fire, the appellees had, as material-men under the statute, a lien upon the buildings to the amount of the lumber furnished b}7 them to Davis, and used in their construction. It has been argued by the appellants that no lien exists until a claim is filed of record under the 10th and 11th sections of the Act of 1838, and for this construction, they rely upon the language of the Court of Appeals, in Carson vs. White, 6 Gill, 27, where it is said: “No mechanic has, in virtue of the Act of Assembly, a lien on the house which he has built or repaired, unless he has filed in the office of the clerk of Baltimore county court a statement of his demand, and, in that statement, has given not only the sum due, but also the nature or kind of work done, and the kind and amount of the materials furnished, and the lime when the materials were furnished, and the work done.” This language, taken by itself, would seem to furnish some ground for the appellant’s-argument. But an examination of the case will show that the question before the court was, the sufficiency of the claim-filed in that case, and relied upon by the mechanic, and they decided that the provisions of the Act, in that respect, not having been complied with, the plaintiffs could not avail themselves of the remedies provided by the law. The question we are now considering is, whether in the intermediate time between the furnishing of the materials and the time limited by law for filing the claim, there is a subsisting lien? This question did not arise in Carson vs. White. — 297 — It may, however, be decided by a brief reference to the provisions of the Act of Assembly. By the 13th section it is enacted, “That every such debt shall be a lien as aforesaid, until the expiration of six months after the work shall have been finished, or materials furnished, although no claim shall have been filed therefor; but such lien shall not continue longer than the said period of six months, unless a claim be filed as aforesaid, at or before the expiration of the same period.” Carson vs. White, was a case within the latter clause of this section. The case before us falls within the first clause, which gave to the appellees a lien upon the buildings at the time of their destruction by fire, notwithstanding no claim had been filed by them. Such a lien constituted an insurable interest in the property. This is abundantly established by all the authorities. In Wilson vs. Hill, 3 Metcalf, 66, the Supreme Court of Massachusetts say, “An insurance on buildings against loss by fire, although, in popular language, it may be called an insurance of the estate, is, in effect, a contract of indemnity with an owner, or other person, having an interest in the preservation of the buildings.” Many cases on this subject are collected in the American Leading Cases, 2 Vol., 550, (4th Ed.,) and the principle deduced from them, as correctly stated on page 553, is, “that any interest in real estate, or which would be impaired or injured by its destruction, may be made the subject of a valid insurance, although falling short of a title to the land.” See Hancox vs. Fishing Ins. Co., 3 Sumner, 132. 1 Arnonld on Ins., ch. 10, sec. 105. 1 Phillips on Ins., secs. 173, 175, 201, 204, 312, 351. 3. The last proposition is, whether there was any misrepresentation or concealment of any material facts, in obtaining the policy, which will avoid it. 1st. As to the description of the property. The first condition of the policy contains these words: “And if any person shall insure his or their building or goods, and shall cause the same to be described in the policy otherwise than as they really — 298 — are, so as the same be charged at a lower premium than is herein proposed, such insurance shall be of no force.” This clause we understand to relate to a misdescription of the property insured, and as having no relation whatever to the character of the title or interest in it. There is no evidence in the cause of any such misdescription as is contemplated by that clause, and, therefore, the fourth prayer could not be granted. 2. As to the statement of the title in the policy. It is argued by the appellant, that, in this case, the policy was taken upon the property as if Coates & Glenn were the owners of it, and that the omission to state the nature and character of the interest, was a violation of the first condition of the policy, or, if not within that condition, that it was a concealment of a fact material to the risk, which ought to have been communicated, and renders the policy void. We have already said that (he first condition of (he policy cannot be construed to relate to the title or ownership, but that it refers only to the description of the property itself. There is some conflict of authority as to whether it is the duty of the assured, in a policy against fire, to communicate to the underwriter, in the first instance, and in the absence of any inquiry on the subject, the extent and character of his interest, when it is of a special or limited nature. In the case of the Columbian Ins. Co. vs. Lawrence, 2 Peters, 25, it was decided that such fact ought to be communicated, and the same. principle was re-affirmed in 10 Peters, 507, when the case came before the Supreme Court on another occasion. The same principle was announced in Carpenter vs. Washington Insurance Co., 16 Peters, 495. On the other hand, the courts in this country have generally refused to give their assent to this principle. This will be apparent from an examination of the great number of cases on this subject collected and explained in the American Leading Cases, 2 Vol., 637 to 642. The ruling of the courts in this country has generally sustained the validity of such policies as the one we are considering, if they have been procured in good faith,..even although — 299 — the assured has only a limited or partial interest in the property insured, and has not communicated that fact to the insurers. (Decided July 15th, 1859.) It is not necessary, for the decision of this case, to express our opinion on this point; for, whether we adopt the views expressed by the Supreme Court of the United States on this question, or those of the courts of Massachusetts, New York, and other States, the result in this case will be the same. It is everywhere conceded, that the materiality of the disclosure or concealment is a question of fact which must be submitted to the jury. See 10 Peters, 516. None of the prayers of the defendant present this question to the jury. They go upon the ground either that the appellees had no insurable interest, not having property in the building insured, as owners, or that the omission of the assured to communicate to the company the extent and nature of their interest in the building, rendered the policy void, whether material to the risk or not. It follows, from what has been said, that none of the prayers of the defendant could properly have been granted, and there was no error in rejecting them. No exception being taken to the instruction granted byjthe Superior Court, it is not before us for review in this appeal. Judgment affirmed.