Bitting v. Home Ins. Co. of New York

• Decision Date: 11 June 1931
• Docket Number: 29.
• Citation: 155 A. 329,161 Md. 56
• Parties: BITTING v. HOME INS. CO. OF NEW YORK.
• Court: Maryland Court of Appeals

155 A. 329

161 Md. 56

BITTING v. HOME INS. CO. OF NEW YORK.

No. 29.

Court of Appeals of Maryland

June 11, 1931

Appeal from Circuit Court, Prince George's County; Joseph C Mattingly and Wm. Meverell Loker, Judges.

Action by John E. Bitting against the Home Insurance Company of New York. Judgment for defendant, and plaintiff appeals.

Affirmed.

Argued before BOND, C.J., and PATTISON, URNER, ADKINS, OFFUTT DIGGES, PARKE, and SLOAN, JJ.

Frank M. Hall, of Upper Marlboro (M. Hampton Magruder, of Upper Marlboro, on the brief), for appellant.

R. E L. Smith and Arthur C. Keefer, both of Washington, D. C., for appellee.

OFFUTT J.

This is an appeal from a "Judgment on Demurrer" entered in the circuit court for Prince George's county for the defendant in an action on a fire insurance policy, issued by the Home Insurance Company of New York to John E. Bitting insuring tobacco stored in a barn on the insured's farm in Prince George's county, Md.

Bitting filed in that court an amended declaration in which, in substance, he stated that on October 17, 1928, the defendant issued to him a fire insurance policy insuring him to the extent of $2,000 against loss through the damage or destruction by fire of tobacco owned by him and stored in his barn; that on December 12, 1928, the tobacco was totally destroyed by fire, and that on the following day a written notice of the loss was served upon defendant's agents, as a result of which it sent its agent to inspect the loss, but that it has "totally refused" to pay the "amount of insurance called for in said policy" or any part thereof.

By way of defense the insurance company filed a special plea in which it alleged: "That one of the conditions of said policy was and is that unless otherwise provided by agreement in writing added hereto the defendant shall not be liable for loss or damage to any property insured under said policy while encumbered by a chattel mortgage and said policy also provides that 'no one shall have power to waive any provision or condition of this policy except such as by terms of this policy may be the subject of agreement added hereto, nor shall any such provision or condition be held to be waived unless such waiver shall be in writing added hereto'; and the said tobacco insured under said policy was at the time of the fire referred to in the declaration encumbered by a chattel mortgage and there was not added to said policy any agreement of defendant in writing consenting to said chattel mortgage or agreeing otherwise than to defendant's non-liability while said mortgage covered said tobacco."

To that plea the plaintiff replied, and in his replication admitted, that the policy contained the conditions alleged in the plea and that at the time of the loss the property insured was incumbered by a chattel mortgage, but sought to avoid by averring the following facts, that is to say, that prior to the issuance of the policy, defendant's soliciting agent saw the plaintiff in reference to renewing a fire insurance policy which he had held in another company, that he "advised" the agent that he "wanted insurance in the sum of $2000" on a crop of tobacco then stored in his barn and owned by him "in some company" which would permit him to borrow money secured by bill of sale or chattel mortgage on the tobacco; that the agent told him that the company in which he had been insured might object to insuring the tobacco if it "was subject to or would be subjected to" such a lien, but that "he as said agent of the defendant would insure him in the sum of $2000 on said crop of tobacco, which policy would permit him, the plaintiff, to borrow money on said crop of tobacco, either by way of bill of sale or chattel mortgage," but that such a policy would "cost him more money"; that relying upon the "advice and assurance of the said agent and solicitor of the defendant," he consented to the issuance of "a policy" by said defendant in the sum of $2,000 on said tobacco, and "a policy" was in fact issued to him, and the premium thereof paid, and that thereafter "by reason of the assurance of the said agent and solicitor of the defendant, and relying on the same" he borrowed "by way of chattel mortgage" $500 on the tobacco covered by the policy. The replication then concludes as follows: "Wherefore, the plaintiff relying as aforesaid on the statements made by the agent and solicitor of the defendant both prior to the issuance of said policy and at the time of the procurement of said chattel mortgage as aforesaid, and that the terms and conditions of said policy were in accord with the representations made by said agent and solicitor of said defendant, felt secure in that he was protected under said policy to the extent of $2,000.00; and at the time of the execution of the chattel mortgage aforesaid, he was not aware of nor did he know by reason of the assurance of the agent and the solicitor of the defendant that because he had in fact borrowed money on said tobacco, insured as aforesaid, there was any obligation on his part to have endorsed thereon or added to said policy any agreement in writing on the part of the defendant consenting to said chattel mortgage, or any waiver in writing added to said policy in this regard."

A demurrer to that replication was sustained on December 9, 1930, and on March 4, 1931 a judgment "on demurrer" for the defendant was entered by "Order of court."

That reply to appellee's defense involves two propositions; one, that the assurance given by defendant's agent before the policy was issued, that he as defendant's agent would insure the plaintiff in the sum of $2,000 on said crop of tobacco, which policy would permit him to borrow money on said crop of tobacco either by way of bill of sale or chattel mortgage, estops the insurer from asserting a provision in the policy actually delivered to and accepted by him which relieved the insurer from loss, if at the time it occurred the property was incumbered by a chattel mortgage, unless it had in writing assented to such incumbrance; and two, that such statements repeated by the agent at the time plaintiff placed a chattel mortgage on the property amounted to a waiver by the insurer of that provision.

Estoppel is cognizable at common law either as a defense to a cause of action, or to avoid a defense, 21 C.J. 1244, and while ordinarily an estoppel in pais need not be specially pleaded, Id. 1240; National Shutter Bar Co. v. Zimmerman, 110 Md. 313, 73 A. 19; Albert v. Freas, 103 Md. 583, 64 A. 282; Babylon v. Duttera, 89 Md. 444, 43 A. 938; Brooke v. Gregg, 89 Md. 234, 43 A. 38; Higgins v. Carlton, 28 Md. 115, 92 Am. Dec. 666, yet where it is relied upon to avoid a defense set up in a special plea it too must be specially pleaded. Hayes and Wife v. Va. Mut. Protection Ass'n, 76 Va. 231. Such a pleading is sufficient if, without reference to mere form, it states facts which are in substance a sufficient reply to the defense, Code, art. 75, §§ 2, 3, 8, provided it gives color to defendant's plea by confessing its averments, 49 C.J. 292. So that, the question is, are the facts stated in the replication sufficient to estop the defendant from asserting the defense relied upon in its special plea identified as Defendant's Plea No. 4.

In dealing with that question it may be assumed that any knowledge of defendant's soliciting agent acquired before the issuance of the policy and, while acting within the scope of his authority in its negotiation, will as to that particular business be imputed to his principal, 26 C.J. 296 West End Hotel Co. v. American F. Ins. Co. (C. C.) 74 F. 114, 115; Travelers' Ins. Co. v. Melman, 147 Md. 459, 128 A. 125; Mut. F. Ins. Co. v. Owen, 148 Md. 257, 129 A. 214, and it has repeatedly been held by this court that provisions in a policy which deny to the agent the power to waive any of its conditions have no application to acts done or statements made at its inception, N.Y. L. Ins. Co. v. Rogers, 156 Md. 92, 143 A. 651; Dulany v. Fidelity & Cas. Co., 106 Md. 34, 66 A. 614; Forwood v. Prud. Ins. Co., 117 Md. 260, 83 A. 169; Hartford F. Ins. Co. v. Keating, ...