Mueller v. South Side Fire Ins. Co.
| Decision Date | 11 November 1878 |
| Citation | 87 Pa. 399 |
| Parties | Mueller, for use, <I>versus</I> South Side Fire Ins. Co. |
| Court | Pennsylvania Supreme Court |
Before AGNEW, C. J., SHARSWOOD, MERCUR, GORDON, PAXSON and TRUNKEY, JJ. WOODWARD, J., absent
Error to the Court of Common Pleas, No. 2, of Allegheny county: Of October and November Term 1878, No. 158.
George N. Monro and J. S. Ferguson, for plaintiff in error.—If this company is to be held liable, the reason of its liability must be found either in the fact that no notice of the cancellation was given to Mueller, or because it could not cancel until after notice to the assured of its intention to cancel, or in the fact that it did not refund a rateable proportion of the premium. All of these reasons were urged in the court below by the plaintiff's counsel. As to the first reason, the association was primarily interested in the policy. Mueller himself had appointed it to take the fruits of the policy. It was his representative, and as such, a proper party under the conditions of the policy. He had no interest until it was paid. The second reason has already been decided against the plaintiff; in Carr v. The Lancashire Ins. Co., 27 U. C. Q. B. 217 and 453, cited in Bates' Fire Ins. Cases, 159, sect. 13.
As to the third reason, the loss was payable to the Rochester Association. It was the beneficiary. It had paid neither money nor note for the insurance. If money had been paid, the company would not have been bound to refund it, although, in that event, of course, it would have been bound to refund to Mueller. The notice then terminated the rights of the association in the policy. No money was refunded to Mueller because he had paid none. It is true that the note remained in the hands of the company. But the note was no debt. It was the mere evidence of a debt.
The silence of Lafferty cannot be construed into a waiver by the company: Bumstead v. Dividend Ins. Co., 2 Kernan 81; Beatty v. Lycoming Ins. Co., 16 P. F. Smith 9; Inland Ins. Co. v. Stauffer, 9 Casey 397. As trustee he could not waive any informality or dispense with any conditions of the policy: McEvers v. Lawrence, 1 Hoff. Ch. Rep. 172.
John H. Mueller and J. M. Stoner, for defendant in error.— The note was made by a solvent and responsible person, and the company confessedly accepted it as cash. Its dishonor gave them a right of action against the maker, but no equitable or legal right to avoid the contract of insurance. If they proposed that such default should operate as an avoidance of the contract, there should have been an appropriate provision in the policy: New England Mutual Life Insurance Co. v. Hasbrook, Administratrix, 32 Ind. 447. The return of the premium is a pre-requisite to the right to terminate the risk: Hathorn v. Germania Insurance Co., 55 Barb. 28; Franklin Fire Insurance Co. v. Massey, 9 Casey 221. The acceptance of the note as payment, would certainly operate as a satisfaction of the company's claim for the premium, and be followed by all the legal consequences of an actual payment in cash. It has been held, as matter of law, to be payment: Barker v. North Brit. Ins. Co., 8 S. & D. 869. The proofs were received by Mr. Lafferty without objection, retained by him afterwards and produced by the company's counsel on the trial. There was no intimation of the alleged defect until after suit was brought. That Mr. Lafferty had plenary powers in the management of the business of the company, cannot be successfully denied. The testimony of R. B. Brown, Esq., fully warranted the finding suggested in the plaintiff's point, that Mr. Lafferty was the sole executive officer of the company. These facts justified the court in submitting to the jury the question of waiver: McMasters v. Westchester Co., 25 Wend. 379; O'Neil v. Buffalo Fire Ins. Co., 3 N. Y. 122; Vandeusen v. Charter Oak Ins. Co., 1 Rob. (N. Y.) 55; Bilbrough v. Metropolis Ins. Co., 5 Duer 587; Bailey v. Hope Ins. Co., 56 Me. 474; Firemen's Ins. Co., v. Crandall, 33 Ala. 9.
Mueller's policy was for the term of three years from the 15th September 1874, for a premium of $180. It contained a stipulation that for any cause "it shall be optional with the company to terminate the insurance after notice given to the assured or his representative, of their intention to do so; in which case the company will refund a rateable proportion of the premium." This provision was also inserted, to wit: "Loss, if any, payable to the Rochester Building Association, No. 2, as their interest may appear." The said association took and retained possession of the policy until after the fire. Mueller gave his note,...
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