Welsh v. London Assur. Corp.

• Decision Date: 31 October 1892
• Docket Number: 179
• Citation: 151 Pa. 607,25 A. 142
• Parties: Welsh v. London Assurance Corporation, Appellant
• Court: Pennsylvania Supreme Court

25 A. 142

151 Pa. 607

Welsh v. London Assurance Corporation, Appellant

No. 179

Supreme Court of Pennsylvania

October 31, 1892

Argued October 7, 1892

Appeal, No. 179, Oct. T., 1892, by defendant, from judgment of C.P. Venango Co., Aug. T., 1891, No. 71, on verdict for plaintiff, Ruhamah Welsh.

Assumpsit on a policy of fire insurance.

At the trial, before TAYLOR, P.J., it appeared that plaintiff owned a life interest in real estate under the will of her deceased husband. In 1888, A. J. Neeley, a solicitor of insurance for Barbour & Dunbar, defendant's agents at Titusville approached plaintiff on the subject of insuring her personal property and the house and barn in which she had a life interest. There was some conversation between them as to whether the insurance should be taken out in the name of the executors of the will, or in her own name, but it was finally decided that she should make the application herself. A written application was prepared in which the plaintiff's interest was described as a "life lease." This application was forwarded to Barbour & Dunbar, and a policy was issued, by mistake, for the full value of the fee. The barn was destroyed by lightning in 1890, and the loss was paid to plaintiff through Barbour. On March 8, 1891, the house and its contents were destroyed by fire. The facts as to the notice of the fire and proofs of loss are stated in the opinion of the Supreme Court.

The court charged in part as follows:

"As to the first grounds of defence, that the plaintiff made a false statement as to the ownership of the property, the application for insurance has been lost, and we have, as written evidence of the contract, only the policy upon its face. It shows an insurance of the property at nearly its full value, and for which plaintiff was the owner in fee that she was the sole and absolute owner of the real estate while the uncontradicted testimony shows that, under the will of her husband, the plaintiff had only an estate for life, which was worth at her age the amount which you have heard detailed in the evidence here; the whole estate, which by the terms of the policy was wholly insured as the property owned by the plaintiff. But the plaintiff seeks to modify this written agreement by oral testimony, attempting to show that it was understood, and was stated at the time of the making of the contract of insurance that in fact only her interest on the life estate was stated as the interest which was to be insured. A contemporaneous agreement to this policy of insurance, if made at the time, and lost, may be shown by parol here upon the trial. But the presumption of law is, gentlemen, that the policy in the hands of the plaintiff, and read over by her, was notice to her that she had an insurance upon the house as the sole owner in fee, and this policy being a consummation of the contract in writing, it is presumed in law to be the precise and definite contract between the parties, and the burden of proof is upon the party who seeks to change the written contract by parol, to satisfy the jury by clear and satisfactory evidence. Upon this question you have had the testimony of Mr. Neeley, Mr. Barbour, and the other evidence which you will remember. Mr. Neeley, who is the agent of the plaintiff, says he wrote up the application of the plaintiff's interest in the real estate as being a life estate, and the writing made at the time specified a sole ownership in the plaintiff, and the fact that the house was insured at nearly its full value as shown by the witness for the plaintiff. If this was an honest mistake in thus stating the ownership, or if the agent of the company, at Titusville, issued the policy as he did, knowing the actual state of the ownership, then, if the plaintiff was acting in good faith, the change in the policy from the alleged application would not militate against the plaintiff. Upon the other hand, if the plaintiff retained this policy knowing it was for about the full amount of the value of the property, the real estate insured, and that it was insured to her as the sole owner of the property, without notice to the company of the mistake in the contract contained in the policy, and with the intent of collecting the full value of the interest in the fee as the sole owner, it would be such a fraud as would render the policy void, and the plaintiff ought not to recover for any alleged loss upon the burning of the house. . . .

"The plaintiff claims, and asks you to find, that she, under some instructions or intimations from the authorized agent of the company for this purpose, proceeded to make out, to the best of her ability, a statement in writing of her alleged loss, which contained an itemized statement of the personal property destroyed, as well as the house, which had been entirely destroyed. That the same was given to the agent of the defendant company at Titusville, within two or three weeks after the loss occurred, and which has been produced by the defendant and given in evidence here upon the part of the plaintiff. They are not such proofs of loss as would comply with the terms of the contract, and if there were nothing more we would instruct you that the plaintiff could not maintain this action. [But it is contended by the plaintiff, and she asks you to find that the defendants, by their act, not only waived a literal compliance with the terms of the policy, requiring proofs in accordance therewith, but, further, that they are now estopped from setting up this defence in this action for the reason, first, that under the instructions, or, at least, intimations, of the agent of the company in its behalf, she furnished to the company as full and as complete a proof of loss as she believed to be necessary, and that the defendant company retained the same without any notice to her that there were any or further proofs required. Upon this we instruct you in the language of Justice MITCHELL of the Supreme Court:

"'If the insured in good faith, and within the stipulated time, does what he plainly intends as a compliance of the terms of his policy, good faith equally requires that the company shall promptly notify her of their objections, so as to give the insured the opportunity to obviate them. And mere silence may so mislead the plaintiff to her disadvantage to suppose the company satisfied, as to be of itself sufficient evidence of waiver by estoppel; but if without valid reason she failed to comply with the requirements of her contract at all, or do so within the stipulated time, then the liability of the company is discharged.'

"How was this matter in the present case? Did the plaintiff in good faith make out what she intended and believed to be a compliance with the clause of the policy requiring proof of loss within the time? And if so, did the defendant retain the same without at any time giving any notice that the proofs were defective and not satisfactory to them, and point out the alleged defects to the plaintiff? If so, the jury would be warranted in finding that such alleged defect in the proof of loss was waived by the defendant, and if so found by the jury, it would be no defence to this action. But upon the other hand, if the jury should find, as claimed by the defendant, that the plaintiff was told by the agent of the company that she must make out her proofs of loss as stated in the policy, and she did not do so, as there is no claim that she did, then she would not be entitled to recover unless the jury further find that the authorized agent of the company, after the retention of the admitted proofs of loss without notice of any alleged defect in such proofs, when payment was demanded, placed the reason for the nonpayment by the company upon entirely distinct and different grounds from the alleged defect in the proofs of loss, and the alleged false statement in the application as to her ownership of the property; if they did so, then the jury might infer a waiver of any other grounds of defence. And while the defendant company might have refused to pay without giving any reason at all, or might have relied upon any number of reasons, yet, having given notice to the assured in refusing to pay this claim, of a particular ground of defence, they cannot set up other defence upon the trial. Upon the testimony of Barbour they claim it was, that was the defence they claim they had, and the reason they based upon their refusal to pay.]

"Neeley was the agent of the plaintiff, and any mistake or fraud, or neglect, of Neeley, through anything of that kind, (if the jury should find there was anything of that kind), any defect in the policy, or that it was not issued as it should have been, through any fault of Neeley, then the defendant here is not to suffer for that, because Neeley was simply the agent of the plaintiff in this transaction.

["As to the power of Barbour to bind the company, in my opinion he was so far a general agent as that the service of notice of loss, as also proofs of loss, and, under the evidence, and what he said with reference to the refusal of the company and the reason given at the time, would be binding upon the company, so that the company would be bound by any neglect of him in the issuing of the policy.]

"The burden of proof is upon the plaintiff. They must satisfy you from the weight of the evidence which you deem credible, that their theory is the correct one, and if there is any difference in the testimony you will reconcile it so it may all stand as true, if you can. If you cannot, say where you will give the credit. If the evidence leaves this case evenly balanced, so that you cannot tell which way to find in it, you will find for the defendant."

Plaintiff's points were as follows:

"1. The interest of the plaintiff in the...