Crawford County Mutual Insurance v. Cochran , 1879 Pa. LEXIS 36 ( 1879 )

Mr. Justice Murcur

delivered the opinion of the court, January 6th 1879.

The evidence of a waiver of specific proof of loss was sufficient to submit to the jury. Within two or three days after the fire, the defendant in error went to the office of the company, and informed the secretary of the loss, and offered to pay some previous assessment. The evidence is conflicting as to whether it was to pay both the previous assessments, or the earlier one only. The secretary refused to accept the sum offered. Hampson, a witness on the part of the defendant in error, testified that the secretary “ said the policy had been forfeited; there was no use in coming there; would not look at the money ; would not look at the assessment; said the policy was forfeited, and the company would not pay it, and there was no use bothering anything about it.” This interview was at the office of the company and with its principal officer. If this evidence is believed, there was a distinct declaration that the company would not pay the loss, by reason of the forfeiture of the policy. It was fairly within the province of the jury to say whether the declaration, “ there was no use bothering anything about it,” did not reasonably import that it was useless to make any proofs of loss. The company already had notice of the fire, the only remaining act was to make the formal proofs. A jury might well find that both parties underderstood the language used referred to proofs of loss. If the objection to pay was then put solely on the ground of forfeiture, and the defendant in error induced to make no formal proofs of loss, the company could not, afterwards, successfully plead the absence of such proof. The first and third assignments cover no error: Inland Ins. & Dep. Co. v. Stauffer, 9 Casey 397 ; Commonwealth Ins. Co. v. Sennett, 5 Wright 161; Coursin v. Pennsylvania Ins. Co., 10 Id. 323 ; Buckley v. Garrett, 11 Id. 204; Farmers’ Ins. Co. v. Taylor, 23 P. F. Smith 343; State Ins. Co. of Missouri v. Todd, 2 Norris 272.

The policy was made and accepted, subject to the terms and conditions of the by-laws. The thirteenth declared “ whenever an assessment shall have been made upon a premium-note, and the same is not paid within thirty days after notice * * * the policy of insurance given upon such note shall be null and void, and the directors shall retain such premium-notes, and collect thereon such sum or sums so assessed.” -It is well settled that although a condition be attached to a policy declaring it void, on a failure to pay an assessment on a premium-note within a specified time, yet the policy does not thereby become, ipso facto, void. The company may waive the right of avoidance, and then the contract relation is not wholly dissolved ; but the protection of the policy is suspended until the default of non-payment is removed. No recovery can, therefore, be had for a loss sustained during the continuance of such default: Hummel & Co.’s Appeal, 28 P. F. Smith 320; Columbia Ins. Co. v. Buckley, 2 Norris 293; Washington Mutual Fire Ins. Co. v. Rosenberger, 3 Id. 373.

By levying the assessment of 1st April 1874, the company did not wTaive its right to demand payment of the assessment made the year before; nor did it thereby remove the disabling consequences flowing from the neglect to pay that assessment. As long as the assessment remained unpaid beyond thirty days after duly demanded, so long the protection of the policy continued suspended. The assessment of April 1873 was demanded soon after it was made. An acceptance of its payment at any time before the fire would have restored the former efficacy of the policy. If the holder thereof was in default when the loss was sustained, the company was not' bound to afterwards accept payment of the assessment. There was, therefore, no evidence that the company, before the fire, waived any right which it had acquired by reason of default in the payment of the assessment made in April 1873.

The remaining question is, was the assessment paid before the fire occurred? It appears by the evidence that in June 1873, one Keiling was at work on a house for Bemis. Part of the time the defendant in error worked there for Keiling, and afterwards for Bemis. Bemis was authorized to act as agent for the company “in taking insurance in said company; receiving fees for the same; collecting six per cent, of the premium-note at the time it is given, and receipt therefor.”

The learned judge charged the jury substantially, that if it was agreed between Bemis and Cochran that the former should retain out of the wages of the latter the amount of the assessment, it was a good payment, if Bemis was agent for the company, he having procured the policy for Cochran. In this there was error. As already shown, Bemis was an agent with limited powers, having no authority to collect assessments even in money. It does not appear that he ever assumed or exercised any such power. The fact that the policy was procured by him created no legal presumption that he was authorized to receive assessments subsequently made. The notice given of the assessment directed that the money be remitted by draft or post-office order, or paid at the office of the company. This gave no color of excuse to pay to an unauthorized agent. Cochran did no work for the company. It is not pretended that Bemis had any specific authority from the company to receive the payment in that manner. He did not account for it to the company in any maimer. There was no ratification of his agreement. The company never received the money, and there was no offer of payment until after the fire. If Bemis had been authorized to receive payment of assessments in money, an attempted payment in labor to Bemis personally would have been no payment to the company. One partner cannot discharge a debt due to the firm of which he is a member, in consideration of work rendered for his individual benefit. Equally as great mischief, and more confusion, would result from holding that a debtor to an insurance company may pay an assessment levied to pay losses, by an individual trade, exchange or barter with an agent. It cannot be done. The second point of the plaintiff in error should have been affirmed, and the second and fourth assignments are sustained.

Judgment reversed.