Dowling v. Merchants Insurance

31 A. 1087, 168 Pa. 234, 1895 Pa. LEXIS 781

• Court: Supreme Court of Pennsylvania
• Decided: May 20, 1895
• Docket: Appeal, No. 205
• Status: Published

Opinion

Opinion by

Mr. Justice Fell,

The fraud or mistake of an insurance agent within the scope of his authority will not enable his principal to avoid a contract of insurance to the injury of the insured who acted in good faith, and the fraud or mistake of the agent may be proved by parol evidence notwithstanding it is provided in the policy that the description of the property shall be a part of the contract and a warranty by the insured. This is clear upon principle, and it is abundantly sustained by authority: Smith v. Farmers’ and Mechanics’ Mutual Fire Ins. Co., 89 Pa. 287; Eilenberger v. Protective Mutual Fire Ins. Co., 89 Pa. 464; Susquehanna Mutual Fire Ins. Co. v. Cusick, 109 Pa. 157; Kister v. Lebanon Mutual Ins. Co., 128 Pa. 553; Meyers v. Ins. Co., 156 Pa. 420.

This case is much stronger for the plaintiff than those above cited. In all of these, written applications had been signed by the insured, and in each case the application was made a part of the contract. In this case no written application was made, and the policy was written by the agent and not read by the insured until after the fire. The building insured was built for and used as a boarding house, and was erroneously described in the policy as “occupied by the insured as a dwelling only.” The testimony was clear and uncontradicted that there was no mistake or deception on the part of the plaintiff, who fully and accurately described the property to the agent as a boarding house and spoke to him of its capacity and use. It was seen and examined by the agent, and its use, which was apparent, was fully known to him. The misdescription was his act alone, in the face of light and knowledge, and was unknown to the insured until after the loss occurred. The .defendant cannot be released from its contract because the plaintiff actiug in good faith accepted without examination the policy written by its agent.

In Swan v. Watertown Ins. Co., 96 Pa. 37, the insured signed an application which had not been finished. He directed another to fill it up, and expressed a doubt as to the manner in which it should be done. It was held that he knew facts to. incite him to read the policy, and was charged with knowledge of its contents, and should under the circumstances be presumed, to have accepted it as written. No such presumption arose in this case. Having made a full and frank disclosure of the facts to the company’s agent, who was empowered to write the policy and who from observation knew the character and use of the building, there was nothing to induce or warn the insured to read the policy unless it was the anticipation of fraud or mistake, and this could impose no duty in protection of the rights of the defendant.

The question as to the furnishing of proofs of loss was properly submitted. There was ample evidence to justify a finding by the jury that they had in point of fact been furnished within the limit of time fixed by the policy, and from which also a waiver by the company could properly be inferred. -

The judgment is affirmed.