Oriole Paper Box Co. v. RELIANCE INSURANCE CO. OF PHILA.
| Decision Date | 12 June 1958 |
| Docket Number | No. 7545.,7545. |
| Citation | 257 F.2d 707 |
| Parties | ORIOLE PAPER BOX COMPANY, Inc., a body corporate, and Ellsworth H. Steinberg, Appellants, v. RELIANCE INSURANCE COMPANY OF PHILADELPHIA, a body corporate of Pennsylvania, Pearl Assurance Company, Limited, a body corporate, Ohio Farmers Insurance Company, a body corporate, Appellees. |
| Court | U.S. Court of Appeals — Fourth Circuit |
Joseph B. Axelman and Ellsworth H. Steinberg, Baltimore, Md., for appellants.
Charles Markell, Jr., Baltimore, Md. (Markell, Veazy & Gans, Baltimore, Md., on brief), for appellees.
Before SOBELOFF, Chief Judge, and SOPER and HAYNSWORTH, Circuit Judges.
This appeal was taken from an order of the District Court dismissing the claim of Oriole Paper Box Company, Inc. against three insurance companies for loss by fire of a stock of goods covered by standard insurance policies at the location 519-525 West Pratt Street, Baltimore, Maryland. Ellsworth H. Steinberg, mortgagee of the insured goods, was permitted to intervene as party-plaintiff in the District Court. The case was tried before the District Judge without a jury, who found a verdict for the defendants and dismissed the case on the ground that the fire took place at No. 749-755 West Pratt Street, a more hazardous location to which the goods had been removed without the written consent of the insurance companies to cover the goods at the new location.
Oriole was represented in its insurance transactions by Green & Company, insurance brokers and agents in Philadelphia, who placed the insurance on November 2, 1954, through John C. Danaher & Company, Inc., Baltimore general agents of the insurance companies which issued the policies. In April 1956, Oriole notified Green & Company that it proposed to move its place of business to 749-755 West Pratt Street and Green sent a representative to Baltimore to examine the new location. On April 23, the move was completed and Oriole telephoned Green to have the policies bind the new location. On the same day Green sent to Danaher a memorandum which referred to the outstanding policies and contained the request "please bind new location at 749-55 West Pratt Street, Baltimore." This notice was received and filed at Danaher's office in Baltimore, but no acknowledgment of its receipt was made and no action was taken upon it. Despite the fact that Green received no answer to its request of April 23, it did not communicate with Danaher or receive any communication from Danaher in regard to the insurance prior to October 2, 1956, when the fire took place. When that event occurred, Oriole notified Green and the latter notified the president of the Danaher Company, who went to its files and found Green's communication of April 23. No one in the Danaher office had any recollection of having seen the binder request prior to the fire.
The old location had a sprinkler system and an annual rate of premium of 36 cents per $100.00. The new place had no sprinkler system and at the time the move took place no premium rate for it had officially been made. On August 1, 1956, after an application by Green in July, the Fire Underwriting Bureau in Baltimore promulgated a rate of $2.64 per $100.00, effective July 9. Subsequently and before the fire, Oriole took certain steps recommended by the Bureau to reduce the rate 50 per cent, but no inspection as to compliance with the recommendations had been made before the fire took place.
Each insurance policy contains the statement that Oriole is insured "at location of property involved" against all direct fire loss "to the property described hereinafter while located or contained as described in this policy".
Each policy also contains the following provisions, as to the description and location of the property covered:
Each also contains the following language with respect to "Added provisions":
"The extent of the application of insurance under this policy and of the contribution to be made by this Company in case of loss, and any other provision or agreement not inconsistent with the provisions of this policy, may be provided for in writing added hereto, but no provision may be waived except such as by the terms of this policy is subject to change."
Each likewise contains the following provisions:
Each also contains the following language after the caption "Waiver provisions":
"No permission affecting this insurance shall exist, or waiver of any provision be valid, unless granted herein or expressed in writing added hereto."
Oriole bases its appeal upon the proposition that the insurance companies by failing to cancel the policies and return the premiums, when they were notified of the removal of the goods to the new location, indicated their consent to the removal and waived the right to insist on a provision of the policy that no change in the contract could be made except in writing, and also estopped themselves from making the defense that under the contract they had no liability for the loss because they had not agreed in writing to the change to a different and more hazardous location.
In support of this contention, Oriole offered evidence in the District Court of a custom in the Philadelphia and Baltimore area to the effect that the failure of an insurer to notify an insured of the rejection of an application for new insurance or for endorsement on an old policy was the equivalent of a binder. There was, however, contradictory evidence on the part of the insurance companies that no...
To continue reading
Request your trial