35 Pa. Super. 32 | Pa. Super. Ct. | 1907
Lead Opinion
Opinion by
The policy of insurance in this case contained the following: “The German Insurance Company of Freeport, Illinois, in consideration of the stipulations herein named, and of seven and 50-100 dollars premium does insure H. E. Armstrong for the term of one year from the 26th day of October, 1903, at noon, to the 26th day of October, 1904, at noon, against all direct loss or damage by fire, except as hereinafter provided, to an amount not exceeding fifteen hundred dollars, to the following described property while located and contained as described herein, and not elsewhere, to wit: .... Loss, if any, first payable to the New Kensington Lumber Company, contractors, as their interest may appear.”
It is conceded that on October 26, 1903, when the insurance became effective, the insured property was owned by H. E. Armstrong, and the plaintiff’s interest therein was that of a contractor with a mechanic’s lien for work and materials furnished by it in the construction of a house. The amount of plaintiff’s claim was $1,279.62, with costs. On October 26, 1903, the insurance was effected through Logue & Brother, general agents of the defendant company, and it went into effect from noon of that day. These agents were informed that the lumber company was the contractor and builder of the insured house, and desired the insurance for its protection, and that H. E. Armstrong was the owner of the property. The policy was thereupon issued by the defendant company for $1,500 to H. E. Armstrong, as owner, insuring him against loss or damage by fire as therein expressed. To this policy there was attached a rider as follows: “Loss, if any, first payable to the New Kensington Lumber Company contractors as their interest may appear.” The lumber company paid the premiums, and the agents were informed that the insurance was effected to protect its interest. Armstrong did not appear before the
Upon the above state of facts the lumber company contends that the insurance contract was in fact between it and the insurance company, and that the present action can be maintained between the lumber company as plaintiff and the insurance company as defendant, notwithstanding the facts that the policy was made to Armstrong as owner, and that neither the defendant company nor its agents had notice or knowledge to the contrary, and that they did not know that Armstrong was a bankrupt, and was actively going into bankruptcy at the very time when the contract of insurance was made. It is conceded that the adjudication in bankruptcy by Armstrong was such a change of ownership of the insured property as would avoid the policy under its plain terms, in the absence of the rider, but the plaintiff contends that the insurance was taken solely for its benefit and that it can recover, notwithstanding the provision of the policy is a complete bar to the right of the person named therein as owner to recover. We cannot agree with this contention on the facts of the present case. The defendant company had the right to rely on the representation, which was embraced in the policy, that Armstrong was the sole owner of the property, and that he would not cause or permit any change to take place in the interest, title or possession of the subject of insurance.
At the trial there was a motion for a binding instruction in favor of the defendant. But this was denied and the jury rendered a verdict in favor of the plaintiff for the full amount
The first of these is Assigned Estate of William Zehring, Appeal of Elizabeth Mease, 4 Pa. Superior Ct. 243. In that case the policy was issued nominally to William Zehring as the assured “Loss, if any, payable to Elizabeth Mease, widow, as her dower interest may appear.” Prom the finding of fact quoted by Judge Willard, who wrote the opinion of this court, and other statements of fact by him, it clearly appears that Mrs. Mease had an insurable interest in the property, and Zehring only joined in the application on the distinct agreement that he was to pay nothing, and that he was joining as a favor to Dr. Mease, who was acting for his mother. It further appears that the secretary of the insurance company who received the application and procured the policy for Mrs. Mease, well knew that the insurance was on her interest in the property. In such case the policy might well have been issued to her as owner, but the secretary decided that he should name Zehring as owner as above stated. Under this state of facts it would have been very unjust to have permitted the insurance company to defend on the ground that .Zehring could not recover. It was never intended by the insured nor by the company, acting through its secretary, to insure the property of Zehring, but to issue the policy on a well-defined insurable interest that Mrs. Mease had therein. Therefore it was clearly right to hold that Mrs. Mease was lawfully entitled to recover the loss under said policy. But in the present case there is not a particle of evidence that the agents representing the insurance company had any knowledge whatever of the financial condition of Armstrong, the owner of the property. Nor is there sufficient evidence that the defendant company undertook or agreed to insure the property as that of the plaintiff. On the contrary, it is clear that the policy was issued on the property of
The present policy was forfeited as to the owner named therein by his bankruptcy: Adams v. Insurance Company, 29 Maine, 292. And in our opinion the plaintiff lost its rights under the policy at the same time, which was long prior to the fire: Insurance Company v. Roberts, 31 Pa. 438.
We think the learned court below did not err in entering judgment for defendant non obstante veredicto.
The assignments of error are dismissed, and the judgment is affirmed.
Dissenting Opinion
dissenting:
It is very clear that if this were an action founded upon the policy of insurance by the owner of the legal title there could be no recovery. The case, however, as it is presented, is not an action upon the policy of insurance. It is, as shown in the plaintiff’s statement, a contract between the plaintiff and the defendant.in and by which "the defendant agreed to issue such policy insuring plaintiff against all direct loss or damage by fire to an amount not exceeding $1,500, to the said house, plaintiff agreeing to pay a premium of seven arid 50-100 dollars to defendant for such policy,” the policy having been issued in pursuance of this contract. The action is brought
To this extent, therefore, there was misrepresentation on the part of the defendant in the issuing of the policy, even admitting that nothing whatever was said upon the subject. So far as appears by the testimony, neither the plaintiff nor the defendant knew of the impending bankruptcy of the owner of the legal title. I assume that if under the facts as they appear in this case the plaintiff had made application to a court of equity before the bankruptcy of the owner of the legal title for reformation of the policy so as to conform to the contract which it had made with the insurance company, as he alleges, and as I think the proof is sufficient to warrant, it would undoubtedly have been reformed so as to conform to the contract, and to this doubtless the defendant itself would have assented. And so after the change of title a like application would have been accorded a like result. If this is true, and the contract would have been reformed before the fire I cannot see why equity ’ should not interfere to estop the defendant from setting up the defense which prevails here after the fire. The point at which I diverge from the court is that at which it is assumed that the 'policy of insurance is the contract between the parties and con- ’ struing it accordingly. As I view thé case the policy never was the contract: It was for a jury to say under the evidence • whether or not there was misrepresentation as to the effect of
The defendant took the money of the plaintiff, and placed-it in its treasury, and still has it there under a contract, if the plaintiff’s statement of claim is correct, and if, as I believe, the facts would warrant an inference which a jury could draw therefrom, to insure his interest in this property with the assurance that the policy effected this result. But it did not do so notwithstanding its allegation to the contrary, not for a single day. To hold that the defendant can do this works unrighteousness. The law is sometimes compelled to do this in order to be consistent with itself, but never when in the orderly administration of justice, equity can open a door of escape. Believing that equity can and ought to open such a door in this case, I am compelled respectfully to dissent from the conclusion expressed in the judgment of the court.
