Auto Ins. Co. v. Van Buskirk
| Decision Date | 25 January 1927 |
| Docket Number | 19653 |
| Citation | 115 Ohio St. 598,155 N.E. 186 |
| Parties | Michigan Automobile Ins. Co. v. Van Buskirk. |
| Court | Ohio Supreme Court |
Insurance - Automobile collision - Provision against incumbrance material to risk - No waiver thereof in absence of knowledge by insurer or agent - Chattel mortgage lien existing when policy issued - Policy voided by failure to give insurer notice thereof - Assured to make disclosure, without oral inquiry by insurer's agent - Waiver defined - Party's rights not waived where material facts not known.
Waiver consists in the relinquishment of a known right. A party cannot be deemed to have waived a right based upon material facts, the existence of which he did not know.
An insurance policy was issued insuring an automobile against loss or damage arising from collision. It contained a provision that the policy should be void if the automobile be "incumbered by any lien or mortgage without the assured having given immediate written notice of such incumbrance." At the time of issuance there was an existing chattel mortgage on the automobile, which fact neither the company nor its agent knew.
Held The mortgage lien was material to the risk and so made by the policy contract, and, in the absence of knowledge thereof on the part of the company or its agent, there was no waiver of the provision relating to said incumbrance.
Said policy contained the following statement, which was made part of the policy and warranted by the assured to be true: "The automobiles herein described * * * are not mortgaged or incumbered except as follows." No exceptions to that statement were made by the assured. Since the policy was expressly voided by the failure of the assured to give notice to the company of the existence of said chattel mortgage and since the assured had warranted said statement to be true, the failure of the agent to make oral inquiry as to incumbrances of which he had no knowledge did not absolve the assured from the duty of making disclosure thereof.
On August 27, 1923, the insurance company insured the defendant in error's automobile for the period of one year against loss or damage arising from certain perils, including that of collision. While the policy was in force, to-wit, on December 14, 1923, the automobile was damaged by colliding with a tree. Proof of loss was duly made. At the time such policy contract was issued, there was a chattel mortgage on the automobile. Alleging these facts in an amended petition, and attaching the insurance policy thereto as an exhibit, plaintiff below brought suit in the common pleas court against the insurance company upon his policy for damages sustained.
Among other provisions, the policy contained the following clause:
"(18) This entire policy shall be void if the assured has concealed or misrepresented any material fact or circumstance concerning this insurance, or the subject thereof, or in a case of any fraud, attempted fraud, or false swearing by the assured or his agent touching any matter relating to this insurance or the subject thereof, whether before or after a loss, or if the interests of the assured in the property be other than unconditional and sole ownership, except as given in statement six (6) Of the application and policy, or if the automobile(s) covered by this policy be or become incumbered by any lien or mortgage without the assured having given the company immediate written notice of such incumbrance."
Various statements were attached to and made a part of the policy, which the assured warranted to be true by the acceptance of the policy. One of these statements was as follows:
"(6) The automobiles herein described are paid for in full, and are not mortgaged or incumbered except as follows."
No exceptions to that statement were noted by the assured. Another clause in the policy contained the following provision:
"(24) This policy is made and accepted subject to the provisions, exclusions, conditions, and warranties set forth herein or indorsed hereon, and upon acceptance of this policy the assured agrees that its terms embody all agreements then existing between himself and the company, or any of its agents, relating to the insurance described herein and no officer, agent, or other representative of the company shall have power to waive any Of tile terms of this policy, unless such waiver be written upon or attached hereto and signed by an officer of the company; nor shall any privilege or permission affecting the insurance under this policy exist or be claimed by the assured unless so written or attached."
The amended petition further alleges that no formal application for insurance was made out and that a representative of the insurance company himself prepared the policy
Plaintiff, in his petition, further avers that lie relied upon the defendant's agent as having made full inquiries of all material matters, and that he received the policy of insurance when issued, but did not read the same, and had no knowledge that any inaccurate or incomplete statements regarding incumbrances on the automobile were made in the policy; and he further avers that when the company issued its policy contract it had no information on its part or on the part of its agent of any existing chattel mortgage.
In the trial court a general demurrer was interposed to the amended petition by the insurance company. This demurrer was sustained, and: plaintiff failing to plead further, as ordered by the court, the action was dismissed and judgment rendered for the defendant below. The Court of Appeals reversed the judgment of the trial court for error in sustaining the demurrer, whereupon error was prosecuted to this court.
Mr. John H. McNeal, and Mr. Henry J. Reed, for plaintiff in error.
Messrs. Holding, Duncan & Leckie, and Mr. J. Harold Traverse, for defendant in error.
The written application for the policy of insurance expressly provided that the statements therein contained were made a part of the policy and that the assured warranted the same to be true by acceptance. Such statements therefore became a part of the contract of insurance as if fully embodied therein. Byers v. Farmers' Ins. Co., 35 Ohio St. 606, 35 Am. 623; Hutchins v. Cleveland Mut. Ins. Co., 11 Ohio St 477.
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