Girard F. & M. Ins. Co. v. Hebard

• Decision Date: 14 June 1880
• Citation: 95 Pa. 45
• Parties: Girard Fire and Marine Insurance Company <I>versus</I> Hebard & Forsman.
• Court: Pennsylvania Supreme Court

95 Pa. 45

Girard Fire and Marine Insurance Company versus Hebard & Forsman.

Supreme Court of Pennsylvania.

May 31, 1880.

June 14, 1880.

May 31st 1880.

Before SHARSWOOD, C. J., MERCUR, GORDON, TRUNKEY, STERRETT and GREEN, JJ. PAXSON, J., absent

Error to the Court of Common Pleas of Lycoming county: Of May Term 1880, No. 133.

COPYRIGHT MATERIAL OMITTED

W. H. Armstrong, for plaintiff in error.—The company has the right to choose the parties with whom they will contract. The "moral risk" is one of great consequence, and one always most carefully considered. The transfer by Forsman dissolved the partnership, and Hebard & Smith were a new party, as distinct from the old as if they were entire strangers. It was not competent for these parties to impose upon the company without their consent, either new parties or a new contract or a modification of the old. The party insured had ceased to exist, and before their assignees could take their place the company must agree to accept them, and this by an affirmative act, which, by the terms of the contract, is to be evidenced in only one way — that is, in writing endorsed upon the policy and signed by the president or secretary. No mere silence or want of action can be substituted for this express provision of the contract. It was as to these parties the law of the case: Finley v. Lycoming Mutual Ins. Co., 6 Casey 311; Buckley v. Garrett, 11 Wright 204; Ins. Co. v. Ross, 23 Md. 179; Ferree v. Ins. Co., 17 P. F. Smith 373; Carpenter v. Ins. Co., 16 Pet. 496; Dix v. Ins. Co., 22 Ill. 272. The policy became void at the instant of the unauthorized assignment, and could not be revived by notice of any kind: Trask v. Ins. Co., 5 Casey 198; Ins. Co. v. Sennett, 1 Wright 208. A waiver must be intentional, and that must be shown clearly and satisfactorily either by acts or declarations: Desilver v. Ins. Co., 2 Wright 134.

H. C. Parsons, H. W. Watson and H. C. McCormick, for defendants in error.—The first condition of the policy, we contend, is applicable only to real estate. A mere change of interest among partners where no stranger is introduced, and no addition made to the number of the insured, when there is no change in the condition or situation of property or risk, a mere assignment of his interest by one partner to the other, is obviously not within the principle or motives on which the condition is provided: Pierce v. Nashua Fire Ins. Co., 50 N. H. 297; West v. Citizens' Ins. Co., 27 Ohio 205. The decision in Finley v. Ins. Co., supra, was only intended to apply to members of mutual insurance companies, and should be so limited. In Buckley v. Garrett, supra, the risk insured was real property, and the case does not apply to personal property. But under the facts in this case the company is estopped from setting up this condition as a defence. The alleged breaches were waived by the acts and declarations of its agents. Waiver may be inferred from the acts of the insurer, or even from their denial of obligation exclusively for other reasons: Inland Ins. Co. v. Stauffer, 9 Casey 397. The conduct of the company misled the insured, and so operated as a waiver; May on Ins., sect. 508; State Ins. Co. of Missouri v. Todd, 2 Norris 272. The company was bound either to endorse consent upon the policy or cancel it, and failing to do either, it will be treated as having assented thereto: Wood on Ins., p. 838; Ins. Co. v. Taylor, 23 P. F. Smith 352; Hadley v. N. H. Ins. Co., 55 N. H. 110; Westlake v. St. Lawrence, &c., Ins. Co., 14 Barb. (N. Y.) 406; Dayton Ins. Co. v. Kelly, 24 Ohio St. Rep. 345.

Mr. Justice GREEN delivered the opinion of the court, June 14th 1880.

This was an action by Hebard, Forsman & Smith, for the use of Hebard & Smith, on a policy of fire insurance for $2500, issued June 1st 1875, to expire June 1st 1876. The subject of insurance was a stock of lumber, lath, shingles and pickets at Williamsport Pennsylvania. On the 29th of April 1876, Forsman sold his interest in the firm to the other members, who thereafter composed the firm called Hebard & Smith. On the same day, the policy in suit was assigned by the old firm to the new, by writing of that date. The assignment was endorsed upon the policy which was then handed by Hebard to Thompson & Clinger, who had been agents of the company until March 1st 1876, to be sent to the company for the purpose of obtaining its consent to the assignment, and having the same endorsed upon the policy, and it was so sent on the same day, April 29th 1876. On May 1st 1876, the secretary of the company replied by the following letter:-

                                                   Philadelphia, May 1st 1876
                

Messrs. Thompson & Clinger, Williamsport, Pa.

Gents:- Yours of the 29th ult. is at hand, enclosing policy No. 84,271, H., F. & Smith, for approval of transfer. We prefer to cancel policy, and will return the premium pro rata. Please signify your assent to this and I will send you a check for the amount.

                                         Truly yours
                                                   JAMES B. ALVORD, Sec'y
                

There was a reply to this letter from Thompson & Clinger which was lost and not given in evidence, and on May 8th 1876, the secretary sent by mail to Thompson & Clinger a check for the return premium $4.17, which was subsequently returned. The fire occurred on the 6th of May 1876, and notice thereof was sent to the company on the 9th. They took no notice of it and refused to pay the loss.

On the trial, the company made defence on the ground that two conditions of the policy had been broken, and that it had thereby become void. They are as follows:-

Condition 1. "If the property be sold or transferred, or any change takes place in title or possession, whether by legal process or judicial decree, or voluntary transfer or conveyance, or if this policy shall be assigned before a loss without the consent of the company endorsed hereon, * * * then and in every such case this policy shall be void."

Condition 12. "No assignment of this policy shall be valid unless notice thereof be immediately given the company, and said assignment be approved by the endorsement and approval of the president or secretary prior to any loss. The company reserves the right to approve the transfer or not."

"And it is hereby mutually understood and agreed by and between this company and the assured that this...