Carew, Shaw & Bernasconi, Inc. v. General Cas. Co. of America, 26507.
| Decision Date | 03 March 1937 |
| Docket Number | 26507. |
| Citation | 65 P.2d 689,189 Wash. 329 |
| Court | Washington Supreme Court |
| Parties | CAREW, SHAW & BERNASCONI, Inc., v. GENERAL CASUALTY CO. OF AMERICA. |
Department 1.
Appeal from Superior Court, King County; Howard M. Findley, Judge.
Action by Carew, Shaw & Bernasconi, Inc., against the General Casualty Company of America. Order granting defendant's motion for judgment notwithstanding the verdict, and plaintiff appeals.
Affirmed.
McClure & McClure, of Seattle, for appellant.
Ralph S. Pierce, Edwin J. Cummins, and Gordon H. Sweany, all of Seattle, for respondent.
This action was instituted for recovery on a burglary insurance policy on a safe and its contents. Trial of the cause to a court and a jury resulted in a verdict in favor of the plaintiff for the full amount for which it prayed. Motion for judgment notwithstanding the verdict was granted, and judgment of dismissal entered. Plaintiff appealed.
On September 29, 1934, appellant, a domestic corporation commenced business as a cash department store in Seattle. Mark T. Shaw, its vice president, was charged with the duty of obtaining insurance protection for appellant. On September 28, 1934, when Graham John Smith, an agent of respondent insurance company, endeavored to interest Shaw in fire insurance, the latter informed Smith that the appellant desired nothing other than burglary safe insurance. Smith stated to appellant's vice president that it was necessary for the safe to be examined by George Fuller, an employee of respondent, who was familiar with burglary safe insurance. Later the same day Fuller and Smith called on Shaw. On that occasion, Fuller examined the safe and the chest inside of the safe, measuring the thickness and ascertaining the nature of the walls to determine the amount of the premium for the burglary insurance desired. This investigation disclosed that the chest inside the safe was burglarproof, under the accepted rating classification, and would carry the basic rate of $5 for $1,000 of insurance, from which a 10 per cent. credit for a watchman and a 15 per cent. credit for an alarm service were deducted, making a total of $3.82 1/2, while the safe proper being fireproof only, would take a basic rate of $16.50 subject to the same deductions.
Testimony on behalf of the respondent is to the effect that inquiry was made by Fuller and Smith as to whether the money was to be kept in the burglarproof chest or in the safe outside the chest. The place in which the money was kept would, of course, make the difference in the amount of the premium. Though Shaw and two employees of the appellant denied that such an inquiry was made, appellant, in its reply to respondent's answer, admitted that agents of respondent 'examined the safe to be insured and asked if the property to be insured was kept, or to be kept, in the inner chest.' Smith, respondent's agent, testified that, at the time of the meeting of Fuller and Shaw, Fuller informed Shaw of the difference in the rate, and, on Shaw's assurance that the money was kept in the chest, quoted to Shaw only the lower rate covering the chest.
After Fuller examined and measured the safe and quoted the rate for insurance to Shaw, the latter telephoned to Lambuth, of the firm of Lambuth, Sills & Co., insurance and real estate agents, who handled the appellant's insurance business, discussed the rate with Lambuth, and, after that telephonic conversation, Shaw advised Fuller and Smith he would give his answer to them later on the matter of insurance. Shaw then instructed Lambuth to obtain the insurance from respondent. Lambuth, in turn, so instructed H. C. Roach, of the office of Lamping & Co. Roach telephoned to Fuller, ordering the insurance and at the same time ordering a binder to give protection pending delivery of the policy. Fuller thereupon executed and delivered the insurance binder to Shaw, who carefully examined it, noted that it was in accordance with his oral order to Fuller, and filed it away. The binder, which is dated September 28, 1934, was issued, respondent admits, by Fuller on that date, and covered the entire safe, which binder was mailed to Lamping & Co.
In explanation of the coverage of the safe and chest and the issuance of the binder, Fuller testified that the respondent had not received a definite order for the business on the basis of the quotation to Shaw, and that it is the practice of the insurance company, when so requested by the agent, to issue a binder giving to the assured protection until the definite order is received. This binder, which reads as follows, is dated September 28, 1934, and was received by Shaw the following day: 'General Casualty Company of America 'Seattle, Wash. 'hereby acknowledges itself bound by a Burglary or Glass Insurance undertaking, the subject matter of the insurance being described in the following Schedule; and during the term of this Binder the actual contract of insurance shall be evidenced by such of the printed policy form blanks in use by the Company during such term as are indicated by the letters given in the Schedule. The term of this Binder shall end at twelve and one minute o'clock A. M. of the tenth day following that upon which the Binder takes effect. Standard Time to apply at the place where this Binder has been countersigned.
'A pro rata premium charge will be made for this Binder unless a policy or policies are issued and accepted by the Assured covering its term, and the issuance of such a policy or policies shall void this Binder.
"Schedule
"Assured Carew-Shaw & Bernasconi, Inc. Address: Seattle, Washington.
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"Policy Form Amount
Premium of Insurance Term
Rate
"Mercantile Safe Burglary $10,000.00
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"Description of Risk
'Norris Safe & Lock Co. safe and chest No. 43 "72"6; situate premises of the
Assured, SW.Cor. 2nd & Pike Street, Seattle, Washington.
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"This Binder becomes effective Insurance ordered by Lamping &
"Date September 28, 1934, hour 12:01 Company
A. M.
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"Countersigned at Seattle, Washington
"by __________ Quadruplicate
Authorized Agent. Broker's Copy
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'Not valid unless countersigned by an authorized agent, or if any modification or change is made in the printed parts hereof.'
In less than ten days, a burglary insurance policy covering only the chest in the safe, bearing date October 4, 1934, was delivered to appellant. Shaw testified that he assumed that the terms of the policy followed the terms of the binder, and that he filed the policy away without reading it.
Further testimony on behalf of the respondent is to the effect that the morning following Fuller's examination of the safe and chest Shaw discussed the question of insurance with representatives of Lamping & Co., which company is general agent for a number of insurance companies, but not for the respondent. After the discussion, Shaw decided to take the respondent's policy, and, at Shaw's request, Lamping & Co., through Mr. Roach, ordered the three-year policy for $10,000, in accordance with the quotation made direct by Fuller to Shaw. The policy was issued upon the quoted rate of $3.82 1/2 per thousand per annum, with a further reduction in rate for writing the three-year policy.
It plainly appears that the policy covers only property inside the chest inside the safe. This policy, which bears date October 4, 1934, is for the period from September 28, 1934, to September 28, 1937. That portion of the policy in which appears a description of the insured property is typewritten, and appears on page 3 of the policy. Effective December 1, 1935, the coverage was increased from $10,000 to $20,000 as appears by indorsement No. 1 attached to the policy.
On December 22, 1935, the safe was burglarized, and in excess of $14,000 was taken from the safe. The chest, anchored in one corner of the safe, was of burglarproof construction, the doors and walls more than an inch thick, composed of two types of steel, and the door of the chest was fitted with a burglarproof hinge and two combination locks. There was no burglarious entry into the chest.
Citing Gattavara v. General Insurance Co., 166 Wash. 691, 8 P.2d 421, as sustaining authority, counsel for appellant contend that this is an action at law and the verdict of the jury is binding upon the court.
Clearly, this action is one for the reformation, and recovery thereon as so reformed, of a burglary insurance policy on a safe.
In appellant's complaint is the following prayer that the contract of insurance be reformed so that its terms will be the same as agreed upon prior to its issuance, which terms are specifically detailed in the complaint and materially differ from the terms in the policy:
'* * * Without waiving the contention that defendant is estopped to deny plaintiff's right to recover in accordance with the contract between plaintiff and defendant, plaintiff prays that said mercantile safe burglary insurance policy No. BS 3277 be reformed so as to insure plaintiff against loss * * *, inside or outside of any chest in the safe of plaintiff. * * *'
When the court inquired whether appellant was...
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