Schaffer v. Mutual Ins. Co.
| Decision Date | 05 May 1879 |
| Citation | 89 Pa. 296 |
| Parties | Schaffer <I>versus</I> Mutual Fire Ins. Co. |
| Court | Pennsylvania Supreme Court |
Before SHARSWOOD, C. J., MERCUR, GORDON, WOODWARD, TRUNKEY and STERRETT, JJ. PAXSON, J., absent
Error to the Court of Common Pleas of Lehigh county: Of January Term 1879, No. 163.
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W. H. Sowden and A. B. Longaker, for plaintiff in error.— The facts show a contract to insure, and warrant the conclusion that the contract was consummated. Does an insured offer to pay when no contract is made? Does the insurer execute a policy and enrol a member without such contract? Or cancel a policy and erase an enrolled membership, if no insurance was effected? This case is alike in principle with that of Bodine et al. v. Exchange Fire Ins. Co., 51 N. Y. 117. In the case at bar and that of Bodine there was a waiver of pre-payment, and the agreement of insurance was made in both cases on the understanding that the fees should be paid on a subsequent day. But in the New York case there was a clause in the policy containing a condition that "no insurance should be binding until premium was paid." In the case at bar there was no such condition anywhere. In the former case there was a motion for a nonsuit, on the ground that the evidence was insufficient; the motion was denied, and on exception taken by defendant the decision was affirmed. The court below charged that if the company, through their agent, so conducted the transaction that Bodine believed himself to be insured, they were liable; that the agent had a right to waive pre-payment and trust the plaintiff for the premium. An agent can waive the pre-payment of the premiums and bind the company: Bodine et al. v. Exchange Fire Ins. Co., supra; Hotchkiss v. Germania Ins. Co., 5 Hun. 90; Farmers' Ins. Co. v. Taylor, 23 P. F. Smith 354; Sheldon et al. v. Atlantic Fire and Marine Ins. Co., 26 N. Y. 460.
C. J. Erdman and Evan Holben, for defendant in error.—Payment of the premium and the fees and the applicant's signature to the policy were conditions precedent, and a failure to comply with any of them avoided the policy. The agent of the plaintiff had neither authority nor money to perform these conditions. See Maryland v. Ins. Co., 21 P. F. Smith 393. There was no evidence from which a waiver by Koch could be inferred, nor was it within the scope of his authority.
The company defendant in error was incorporated under the Act of 1856, "for the purpose of insuring all kinds of buildings, merchandise and other property against loss by fire on the mutual principle exclusively." Mutuality of obligation is of course the very essence of the principle. While the company, on the one hand, undertakes to pay or make good the losses, the insured, on the other, agrees to contribute his proportionate share of current expenses and losses happening during the life of his policy. Their respective promises are mutually dependent upon each other. The undertaking of the one is the only consideration for that of the other. It would be unreasonable therefore to contend that there could be any liability on the part of the company to the insured for the loss of his property, unless he at the same time had paid or assumed to pay his proportionate share of expenses and the losses sustained by other members. The principle upon...
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