Freedman v. Providence Washington Insurance , 175 Pa. 350 ( 1896 )

Opinion by

Mr. Justice Fell,

In an action by the same plaintiff, Freedman, against the Fire-Association of Philadelphia, reported in 168 Pa. 249, it was held that a policy of fire insurance procured upon the representation that the property insured was owned by and in charge of a successful business man, when in fact the title was in a married woman who exercised no supervision over it, was invalid; and in that case it was held that there was no evidence of a. waiver by the defendant of the right of forfeiture. This action is founded upon another policy which covered the same property. The testimony however is different. On the trial of the former action there was no denial that the policy had been issued under the belief, based upon representations made by the agent of the plaintiff, that the goods insured were owned by a man who was personally conducting, the business. In this case there was testimony to the effect that the policy had been issued with knowledge upon the part of the company that the goods were owned by Mrs. Freedman. This raised an issue of fact which carried the case to the jury. The submission however included also the question of estoppel. The jury were instructed that if they believed that the policy was procured by false representations they should then determine whether the ■company had ratified it or was estopped from denying its validity. In substance the instruction was that if the company with knowledge of the fraud had required the plaintiff to procure proofs of loss and to incur expenses, it could not deny that it was bound by the policy. The part of the charge ■covered by the eighth assignment of error is : “Now if that policy was void on account of fraud, and the defendant had a right to claim it so, then they had no right whatever to compel the plaintiff to procure proofs of loss or anything else.” That ■covered by the ninth assignment is: “Now in order to estop the company they must have known the facts. They must have known that this was a married woman, and they must have been acquainted with all the facts, in order for them to estop themselves. If they did know the facts, and required the plaintiff to do what she would not otherwise have done— required her to go to an expense which she would not otherwise have incurred — if they did, knowing the facts, require this, then they are estopped from denying that they were bound by the insurance.”

This instruction raises the only question now to be considered. The testimony of the plaintiff’s witness on the subject is this: The fire occurred March 15,1892 at Laceyville, Wyoming Co.; on April 12, Mr. Little, the special agent of the insurance company, called at the plaintiff’s store in Athens, Bradford county, and asked Bernard Freedman, the plaintiff’s husband, if she was at home, and was informed that she was. He then asked to see the books and papers relating to the business which had been conducted at the Laceyville store, where the fire occurred. These were produced by Mr. Freedman, who went with Mr. Little to the office of Mr. Tidd, an insurance agent, in the town. There they examined the papers, and Mr. Little asked Mr. Freedman whether he had ever failed and been sold out, and how long Ms wife had been doing business in her own name, and how much money she had when she started doing busMess. To the last inquiry, Mr. Freedman replied : “ I don’t thmk it is any of your business.” And Mr. Little said: “If it is none of my busmess we will get even with you.” It appears that at this Mterview an offer of settlement was spoken of, but the above is all of the conversation that is given. Later in the day Mr. Little called at Mr. Freedman’s store and asked him if he had informed his wife of - the offer made. He replied that he had not, because he knew that she would not accept it, and Mr. Little then said: “ Well, if that is the case, go on and make out your proofs of loss.” With that the parties finally separated. Proofs of loss were furnished. On June 3d, Mr. Little wrote to the plaintiff calling her attention to the requirement of the policy that the certificate of a magistrate should be appended to the proofs and notifying her that this requirement must be complied with. The letter closed with tins sentence: “The Providence Washington Ins. Co. does not waive any of its rights or conditions under said policy 918.” The certificate was sent, and on June 14th Mr. Little again wrote acknowledging its receipt, and asked that the bills or duplicates thereof showMg dates and places of purchase and prices paid for goods be procured. These letters were addressed to “ R. Freedman, Madam.” This is all that took place between the parties after the fire and before suit was brought, and it is the only evidence upon wMch an estoppel can be based.

It is by no means clear from the. evidence that at this time Mr. Little knew what representations had been made at the time the msurance was procured, but assuming that the defendant had knowledge of them, was there any ground of estoppel?

In Freedman v. Fire Ass’n, 168 Pa. 249, it was said that the call for the magistrate’s certificate would be evidence under our cases of a waiver of other defects in the proof of loss, and that it might raise the question of the right to defend for the breach of other conditions or for the failure of the plaintiff to take steps which were merely formal prerequisites to a suit, and attention was called to the distinctions pointed out in the opinion of the Court in Gould v. Dwelling House Ins. Co., 134 Pa. 570, and McCormick v. Royal Ins. Co., 163 Pa. 184. The subject was not as fully considered as it would have been had a new venire been awarded and the question thus left to be raised again in the case.

Waiver of the proofs of loss may be inferred from acts of the insurer which show a recognition of liability or a denial of liability exclusively on other grounds: Penn Ins. Co. v. Dougherty, 102 Pa. 568; Lebanon Ins. Co. v. Erb, 112 Pa. 149; Snowden v. Kittanning Ins. Co., 122 Pa. 502; and the failure of the insurer to give notice of objections to the proofs of loss furnished within the stipulated time and intended as a compliance with the requirements of the policy is evidence of a waiver of defects: Gould v. Dwelling House Ins. Co., supra. The reason for the rule, and the distinction between an attempted compliance with the requirements of the policy and a failure without valid excuse, are fully pointed out in the case last cited, and it is said in the opinion: “ In establishing this rule in regard to the conduct of insurance companies as to objections to proofs of loss it is not intended to encroach at all on the doctrine of waiver by estoppel as laid down in the well considered and authoritative cases of Trask v. Ins. Co., 29 Pa. 198, Beatty v. Ins. Co., 66 Pa. 9, and others of the same kind.”

In most of the cases in which it has been held that an insurance company by specifying one ground of defense was estopped from asserting other grounds at the trial, the failure of the insured has been in not complying with a condition precedent to the right of action, and they come within the rule stated in Gould v. Ins. Co., supra, or were decided upon the ground of express wavier. In McCormick v. Royal Ins. Co., supra, by mutual understanding of the parties, the only matter in controversy between them was the ownership of the property destroyed; all other grounds of defense had been relinquished. Suit having been brought with this understanding to determine the question of ownership and nothing else, it was held that the company should not be permitted to defend on the violation of a clause in the policy regulating the manner in which the lumber should be stored.

In this case the agent of the insurance company specified no particular ground of defense. He made inquiries as to tbe extent of the loss, the value of the goods destroyed, and proposed a settlement. When this was refused he notified the plaintiff to go on and make out her proofs of loss. He did nothing to mislead her, to place her in a worse position or to cause her to incur any expense which she would not have been obliged to incur had he remained silent. We see in this no evidence whatever from which an intention to waive any ground of defense can be inferred.' ' In the opinion in Welsh v. London Assurance Corp., 151 Pa. 607, Mitchell, J., in speaking of the denial of liability for specified reasons as a waiver of other defenses, says: “ The only ground upon which such a result can rest is estoppel. No party is required to name all his reasons at once, or any reason at all, and the assignment of one reason for refusal to pay cannot be a waiver of any other existing reason, unless the other is one which could have been remedied or obviated, and the adversary was so far misled or lulled into security by the silence as to such reason that to enforce it now would be unfair or unjust: Ins. Co. v. Brown, 128 Pa. 386. The whole doctrine depends on estoppel, and the essential feature of it is loss or injury to the other party by the act of the party to be estopped. In this respect there is nothing peculiar about actions upon insurance policies. They stand on the same footing as other litigation.”

Waiver is essentially a matter of intention, and to establish it theré must be some declaration or act from which the insured might reasonably infer that the insurer did not mean to insist upon a right which because of a change of position induced thereby it would be inequitable to enforce: Beatty v. Ins. Co., 66 Pa. 9; Ins. Co. v. Brown, 128 Pa. 386. In the latter case it was distinctly held that the making of an offer of settlement, or the failure to state in the affidavit of defense all the grounds of defense relied upon, did not justify the inference of a wai ver.

The judgment is reversed with a venire facias de novo.