Stainer ex rel. Northampton County Building & Loan Ass'n v. Royal Insurance

Opinion

by Beaver, J.,

The defendant issued its policy to the legal plaintiff, insuring him against loss by fire of real estate to the extent of $800, and of personal property, $200. The plaintiff, in negotiating a loan from the use plaintiff, the Northampton County Building and Loan Association, pledged the insurance policy as collateral security, of which due notice was given to the defendant’s agent, and an indorsement in the usual form in such cases made upon the policy. On November 2, 1896, the property insured was totally destroyed by fire. October 9, previously thereto, the use plaintiff entered judgment upon the bond accompanying their mortgage against the legal plaintiff, claiming a balance due by him of $507.79 ; levy was made upon the judgment so entered October 10, property advertised November 11, and sale thereof made December 12, the entry of the judgment and the levy by the sheriff being previous to the destruction of the house by fire and the advertisement and sale subsequently thereto. The proofs of loss were made December 28, 1896, by the use plaintiff, which were acknowledged by the assistant manager of the defendant, December 31, 1896, who, on January 7, 1897, further writes: “We beg to advise that we have notified Mr. Stainer that, as the property hr question was under foreclosure proceedings at the time of the fire, we must refuse to recognize any liability under the above policy.” No notice of any defect in the proofs of loss is contained in either of these letters. In the latter, the writer seems to intimate a willingness to recognize the rights of the use plaintiff, so far as their equities are concerned. The original statement was filed by the use plaintiff, in which it claimed a balance due from the plaintiff of $486.46, with interest from October 9, 1896, stating, however, in the sixth paragraph of the statement, “ that the amount of insurance on said dwelling house is $800, and, to the best of deponent’s knowledge and belief, the loss occasioned by said fire amounts to about that amount.” Under this statement and the facts as detailed, the case went to trial. In the course of the trial, upon the application of the legal plaintiff, the court permitted an amendment to the statement, setting forth “ that no part of said insurance money has been paid by the defendant to either Alex. Stainer or to the said Northampton County Building & Loan Association, and this suit is brought to recover said sum of $800, with, interest from November 2, 1896, upon said policy, which is justly due and owing to the plaintiff, Alex. Stainer, by the defendant, subject to the equitable interest of the said association,” which amendment was verified by the affidavit of the attorney for the plaintiff. The case was tried and the value of the property destroyed submitted to the jury who found a verdict for the plaintiff for $848.37, being, as the calculation shows, $750 of principal and. interest from the date of the loss to the time of the trial.

-The court below reserved, as a question of law, “whether there be in this ease any evidence which entitles the plaintiff to recover.” After verdict, and upon a motion to enter judgment for the defendant non obstante veredicto, the court, in a full and exhaustive opinion, entered judgment upon the verdict in favor of the plaintiff. From this judgment the defendant appeals and asks to have it reversed, for the reasons which are set forth in six several assignments of error. The first is purely formal, and charges the court with error in entering judgment on the verdict in favor of the plaintiffs non obstante veredicto, the form of this assignment being, of course, an oversight, inasmuch as it is a contradiction in terms. The judgment was entered upon the verdict and not notwithstanding the verdict. The merit of tins assignment depends entirely upon the validity of the alleged particular errors assigned in the remaining specifications.

The second assignment is as to the sufficiency of the proofs of loss furnished by the use plaintiff. Upon the trial, the proofs were produced by the defendant. This was evidence of their receipt. No objection was made as to the'time of their receipt, and their informality, if there be any, depends entirely, therefore, upon the question as to whether or not the party furnishing them had the right to do so. The Act of June 27, 1883, P. L. 165, was intended to avoid a number of technical defenses which had theretofore been plentifully made as to the character and time of the furnishing of proofs of loss. This act specifically provides that where a policy of insurance is held by the assured or an assignee of the same as collateral security, the proofs of loss can be made either by the assured or the assignee. It is true that the use plaintiff in this case was not a regular assignee of the policy; that is, there was no formal legal assignment thereof made to it. It was, however, an equitable assignee, and held the policy as collateral security for the claim which it held against the insured. That claim having been recognized both by the indorsement upon the policy by the agent of the company and subsequently to the furnishing of the proofs of loss by the manager, it would seem as if the second assignment of error might be disposed of upon the ground that the party making or furnishing them was an assignee within the meaning of the act. Inasmuch, however, as no objection was made or exception taken to the proofs of loss as furnished by the use plaintiff, any informality therein, whether as to form or the party making them, would be taken as waived. As to this general proposition it is scarcely necessary to cite authorities, but among late cases are Welsh v. London Assurance Co., 151 Pa. 607, Freedman v. Ins. Co., 175 Pa. 350, and Davis v. Ins. Co., 5 Pa. Superior Ct. 506. It is alleged by the appellee that the second assignment of error is not properly before us, but we have preferred to treat it as regular, and are of the opinion that for the reasons stated it should be overruled.

The defendant in his first point asked the court to hold, as a matter of law, “ that the policy lapsed before the fire by reason of forfeiture under the condition, ‘ If with the knowledge of the insured, foreclosure proceedings be commenced or notice given of the sale of any property covered by this policy by virtue of any mortgage or trust deed.’ ” The court below, in its opinion upon the rule for judgment non obstante veredicto has very clearly pointed out that the entry of judgment upon the bond accompanying the mortgage and the levy upon the plaintiff’s property, by virtue of a fi. fa. issued thereupon was not such a foreclosure as gave the defendant the benefit of this condition of the policy. The substantial ground upon which this condition rests is the increased moral hazard which is incurred by the company, by virtue of the facts stated in the condition; but it was held in Collins v. Assurance Co., 165 Pa. 298, in which the policy therein considered was to be void if “ first, the hazard be increased by any means "within the control or knowledge of the insured; or third, if with the knowledge of the assured foreclosure proceedings be commenced or notice of sale of any property covered by this policy by virtue of any agreement or trust deed,” that the entry of judgment and an execution issued thereon did not avoid the policy. The third assignment, therefore, is also overruled.

The fourth and fifth assignments relate to the amendment allowed by the court at the time of the trial and may be stated under two propositions : First, that the amendment introduced a new cause of action barred by the limitation of time contracted for in the policy within which an action could be maintained, and secondly, that it was contrary to the rule of court relating thereto. The suit is brought in the name of the legal plaintiff. The original statement shows in its sixth paragraph that the amount of insurance on the dwelling destroyed was 1800 and that the loss occasioned by the fire amounted to about that sum. The plaintiff, therefore, had notice in the statement of the essentials upon which a recovery may be had. It is true that in the statement the use plaintiff stated his- claim as being less than the amount of the policy. It is to be noted, however, that the legal plaintiff was in court, both as a party to the action and by a specific appearance for him by attorney. The action being, therefore, properly brought, and the loss under the policy properly stated, we cannot see the force o'f the defendant’s contention that the amendment introduced any new cqnse of action. As to the objection that the amendment was not sworn to or subscribed by the petitioner therefor, it is sufficient to say that the 128th Rule governing amendments does not require that the affidavit should be made by the party applying for the amendment. The appellant seeks to apply the provisions of Rule 121 which relates to the original verification of the pleadings to the amendment, whereas it is governed by Rule 128. We can see no substantial merit in either of these assignments, and they are, therefore, overruled.

The sixth assignment seeks to convict the court of error for entering judgment on the verdict and thus allowing Stainer to recover for furniture of which no loss was established by the testimony. It might be sufficient to say that this question was not raised in any way in the court below but the facts therein stated are scarcely correct. The court, in its charge to the jury, left the question of loss entirely to them, but said specifically in one place, “ There is no evidence that any personal property was destroyed in the building,” and again, “ You will not consider any loss to the personal properly.” The insurance upon the building was $800. There was evidence that the walls which remained after the fire might be of practical use to the amount of say, $50.00. There was other evidence in the case upon which the jury might find, as they evidently did, that the loss was $750 which, with interest upon it from the time of the fire to the date of the verdict, would make the amount for which it was returned. On the whole, even if this assignment of error were properly made, we would not feel disposed to disturb the verdict for the reason therein stated.

Upon a consideration of the whole case, we find no error. The assignments are all overruled and the judgment affirmed.