Stewart v. Glade Mill Mutual Fire Insurance

Opinion by

Orlady, J.,

The plaintiff had a barn insured in the defendant company from 1891 to 1906. A short time prior to the expiration of his last policy, his attention was called to the fact that his policy was about expiring, and W. J. Burton, the authorized agent of the company “for the purpose of receiving applications” solicited a renewal application. The plaintiff was an old man and confined to the house, and for some reason did not notice that his policy had expired until October 29 (a full month after the policy had expired), when he sent for Burton, who on November 2,1906, received from the plaintiff an application for new insurance against loss or damage by fire in the defendant company for the sum of $1,200, for the term of five years, following the second day of November, 1906. On the printed blank furnished by the company it is required that a policy and survey fee of $2.00 is to be paid by the applicant when he signs the application and this requirement was complied with by the plaintiff paying to Burton the stipulated sum of $2.00. On the same paper, under questions to be answered by the agent, are the following: “1. Have you examined the property on which insurance is wanted. Answer: Yes. 2. Are the answers by the applicant all correct so far as you can discern? Answer: Yes. Signed: W. J. Burton, Agent.”

The defendant is a mutual fire insurance company and by a section of its constitution, it is provided, “that the Board of Directors shall appoint suitable persons to act as agents for this company in receiving applications for insurance, and in making a survey of the property, who shall serve for a period of three years. It shall be the duty of the agent of the company to make a correct examination and survey of the property on which insurance is desired, and shall certify the same to the executive committee, which certificate shall answer all questions in the form of application furnished by the board, and shall have the applicant sign the same.”

The defendant’s agent was familiar with the premises, and while there had been some question as to the location of an oil well near to the barn, it was treated both by the plaintiff and by the company’s agent as having been disposed of after notice to and examination by the defendant as not objectionable. It was further provided by the rules of the company that when the application was signed, and the plaintiff paid the $2.00, one-half of that sum was to be retained by the agent for his services* and the other half belonged to the company, and would be accounted for by the agent in an annual statement. About two weeks after signing the application, the plaintiff became anxious in regard to his insurance and wrote to the agent making inquiry in regard to it, and wanted to know why he had not received his policy, and the agent assumed that the plaintiff would receive his policy direct from the company about the same time the inquiry had been made by the plaintiff and that it was not necessary for him to make a direct reply to the plaintiff’s letter. Following this, about November 20, the plaintiff received a postal card dated November 12, 1906, as follows:

“Dear Sir: — Your assessment to the Glade Mill Mutual Fire Insurance Company is $1.80. You will pay the same to the Treasurer, A. Kilpatrick, within thirty days. The treasurer will be at the following places to collect: Callery, December 3d; Mars, December 4th; Maharg, December 10th. Signed by the president and the secretary.”

Knowing that his former policy had expired on September 28, and that his application for new insurance had been signed on November 2, the plaintiff assumed that this assessment was on the new policy he desired to have issued to him. On December 8, the property was totally destroyed by fire, and it is conceded that it was of greater value than the amount mentioned in the policy. Burton,- the agent, was present at the plaintiff’s house, on the day of the fire and after examining the assessment notice, which had been received by the plaintiff accepted from him the assessment of $1.80 mentioned therein he also assumed that it related to the new policy, and the same day forwarded it to the company, with a statement that it was from the plaintiff. On the same day he wrote the following letter to the home office of the company:

“Sir:

“You will find enclosed check for $6.00 for my insurance and R. W. Stewart, $1.80 and $4.20 mine, total $6.00. Would like to know what this assessment is for, and R. W. Stewart’s policy which I sent a month or more ago, he states he has not got, and his barn was burned last night at two o’clock in the morning.”

It developed subsequently that Burton had never forwarded the application to the company, and that the assessment was erroneously made by the proper officer of the company, in assuming that the old policy was still in force, and that this assessment was based on it. On December 12, the defendant returned $1.80, giving as its reason, 1st. Because the policy had expired September 28, 1906 at noon, and no assessment could legally be made on it. 2d. Because the company sent a man to measure the distance from the barn to the well, and he reported that the well was less than the required distance, and he told you then that the well was much within the limit and would make the policy -void. No return was made of “the dollar policy and survey fee” which was retained by the agent of the company.

It is not disputed that the company through its authorized agent knew of the exact location of the oil well on July 4, and an investigation was then made of the situation, and no action was taken by the company to cancel the policy or to give any notice to the defendant of that fact being objectionable. The application was made on a blank -furnished by the company, and the certificate of the duly authorized agent was attached thereto. The policy and survey fee were paid by the plaintiff on November 2, 1906, and after that date the plaintiff knew nothing of the matter until the fire occurred on December 8, when he paid the assessment under the notice issued by the company, and within the time fixed by its terms. Under the undisputed facts, Burton was the proper person to represent the company, and he did act for it within the scope of his authority. His possession of the application was the possession of the company; the sending of the assessment notice was a positive act, and under the finding of the jury encouraged the plaintiff to believe, and actually misled him into believing, that he had a valid insurance in the defendant company, although his policy had not been received by him. This condition resulted, not from any act of omission on the part of the plaintiff which tended in the most remote way to mislead or deceive the company, but was due entirely to the oversight of the agent in not forwarding the application to the home office of the company in due time, when if it had been promptly acted upon, and even rejected, for the reasons subsequently given, he would have had ample time to secure other insurance on his property. The added mistake of the company in sending the notice of the assessment (which it is admitted could not have been legally made on the policy which expired September 28), reasonably misled him to believe that he had valid insurance. The local agent, who was familiar with the company’s methods, was of the same opinion. The case was fairly submitted to the jury as follows: “ If by their own act they led him to believe that he was insured in their company, even if that act be the result -of a mistake on their part, it was a mistake of the company and not of the plaintiff. If by their act they made him believe that he was insured in answer to a proposition submitted for insurance which was in their possession, then, we think, under these circumstances the company would be estopped from saying to the plaintiff that he did not have insurance in the defendant company.” The question was purely one of fact and was properly submitted to the jury. It was held in Ripka v. Mutual Fire Insurance Company, 36 Pa. Superior Ct. 517, “No estoppel can arise either from the company’s failure to act upon and formally reject the application or from the failure of its soliciting agent to forward it to the company, where, before either of the things can be done the property is totally destroyed by fire and the soliciting agent immediately tenders to the applicant the policy fee he had paid.” We feel that the facts of this case are very materially different, in that the neglect of the agent in forwarding the application was supplemented by the act of the company in sending the assessment notice, which reasonably induced the plaintiff to believe that his application had been accepted, and that his policy was in force.

There was no suggestion that the plaintiff did not act in good faith, and the defense of the company is entirely founded upon the mistake of its soliciting agent, coupled with the equally important mistake of its home office, neither of which should the plaintiff be held responsible for, nor should he suffer loss by reason thereof.

The assignments of error are overruled and the judgment is affirmed.