Lycoming Insurance v. Mitchell & Boyle , 48 Pa. 367 ( 1864 )

The opinion of the court was delivered by

Agnew, J.

— Looking at the language of the defendants’ first point, there is certainly much excuse for the error into which the court helow fell in their answer, and were it not that in weighing the whole case as it ought to have appeared to the mind of the judge when he answered the point, and the manifest injustice resulting from the instruction, we should be disposed to leave the plaintiffs in error to take the consequences of the inapt, indeed incorrect language of the point.

A “ valued policy” is not understood to be one which estimates the value of the property insured merely, but which values the loss, and is equivalent to an assessment of damages in the event of a loss. So a “ warranty” in a policy is understood to be a coi.tract relating to an existing fact, and not a covenant for future acts, and differs from a representation in the circumstance that it is a binding agreement that the fact is as warranted; while the representation is not an agreement that it is so, but such a statement of it as will constitute a misrepresentation if it be untrue.

These expressions “valued policy” and “warranty,” therefore, tended to mislead. But when we examine the entire language of the point and the attendant circumstances, the meaning of it ought not to have been misapprehended. The clause in the policy on which the question arose was, that the aggregate amount insured in that and other companies “ shall not exceed two-thirds of the estimated cash value.” The language is, shall not,— not does not. It clearly imported a covenant for future acts. The policy in suit was the first in order of time, the evidence before the mind of the judge disclosing to him that the over-insurance was constituted wholly of subsequent policies. The evidence also disclosed the fact that a subsequent ratification was the ground relied on by the plaintiff below to avoid the forfeiture caused by his subsequent insurance. The remaining points also disclosed most clearly the views of the plaintiff founded on this evidence, while the answers of the judge to them .evidence hi's own full understanding of the case that the question was, whether there had not been an over-insurance subsequently taken, contrary to the stipulation in the policy, and whether the forfeiture arising in this fact was afterwards waived, and the policies ratified.

Now, even encumbered with the inaccurate expressions, how could the substantial meaning of the point be mistaken ? The point reads thus: “ The policy in this case being a valued .policy, and the condition not to insure more than two-thirds of the valuation, and that condition being on the face of the policy, was a warranty, and if broken the plaintiffs cannot recover, unless the company were informed of such over-insurance, and waived the forfeiture.” The expression “ valued policy” is immediately connected with the condition not to insure more than two-thirds of the valuation, referring clearly to future insurance. The valuation thus referred to corrects at once the meaning of “valued policy,” by referring it not to an assessment of loss, but to the measure of the future insurance. So, when the point proceeds to say, “ and that condition being on the face of the policy was a warranty,” it is but a restatement of the condition not to insure more than two-thirds of the valuation, importing an act subsequent to the policy. Warranty, therefore, clearly means not warranty in its special sense, but an undertaking, or agreement, and is made clear by what follows: “ and if broken, the plaintiffs cannot recover unless the company were informed of such over-insurance,” &c. The over-insurance was all subsequent, corresponding with the undertaking not to insure, as referring to future acts. The substantial meaning of the point was certainly this: — The policy being one fixing the value and the condition not to insure more than two-thirds of the valuation, being on the face of the policy, was an undertaking, and if broken the plaintiff cannot recover, unless the company was informed of the over-insurance, and waived the forfeiture. To this proposition the defendants were entitled to an affirmative, answer. It was the leading point of the case.

We are unable to determine upon the correctness of the answer to the second point. Neither the letter of attorney nor the instructions to McCabe the agent, are furnished, while the notes of testimony spread upon the paper-book are too brief and meagre to gather the facts. This is the fault of the plaintiff in error.

In reference to Sampson’s knowledge we have only his own testimony, which asserted that it-was not acquired in the transaction of the affairs of this company, but while attending to other policies. The court therefore seems to have erred in submitting the fact of notice to the company to the jury, against the only evidence in the cause.

There are cases where the applicant is bound to set forth the nature of his interest in the property insured: Reynolds v. State Mutual Ins. Co., 2 Grant’s Cases 326 ; Sweeney v. Franklin Ins. Co., 8 Harris 337. Such also is the case of a mortgagee who insures his interest, one which from its nature depends upon prior encumbrances for its value : Smith v. Columbia Ins. Co., 5 Harris 253 ; Insurance Company v. Updegraph, 9 Id. 513. But the mistake of the plaintiff in error is in supposing an assignment to the equitable owners to be a new insurance. The policy was for five years, and unexpired, and there is no condition against assignment except to procure assent, which was done. Certainly, in the absence of express stipulations, every policy is assignable, subject only to the conditions contained in it. If this were a renewal, the argument might assume more weight. But the question of interest or estate belonged to the issuing of the policy, and not to its assignment. We see no error in the answer to the fourth point.

The judgment is reversed, and a venire faeias de novo awarded.