Pottsville Mutual Fire Insurance v. Fromm , 100 Pa. 347 ( 1882 )

Mr. Justice Green

delivered the opinion of the court, May 29th 1882.

One of the conditions of the j>olicy in suit is in the following- words:

“ Applications for insurance shall specify the construction and material of the buildings to be insured, by whom occupied, whether as a private dwelling or how otherwise; the applicant shall also state the true cash value of the property to be insured ; also any other facts relating and material to the risk, and the said valuation, description and survey shall be taken and deemed to be the act of the assured and a warranty on his, her or their part, and said warranty shall apply to all property insured, whether real or personal. A false description or omission to make known in said application any fact or feature relating to the risk, which if known would induce the company to reject said application, or „ would in their estimation increase the hazard of the same, or an over-valuation of the property or interest to be insured, shall render absolutely void any policy issued upon such description or valuation.”

Another condition is as follows :

“ Any building, insured by this policy, becoming vacant or tenantless for a period of fifteen days, notice" thereof must be immediately given to the secretary, and his consent obtained thereto in writing, otherwise the policy shall be void.”

The application contained the following questions and answers :

“Question — How many chimneys, stoves and fireplaces?

“ Answer — One chimney, one fireplace.

“ Question — How are stoves and pipes secured ?

“ Answer — Well.

“ Question — Are ashes secured in safe places ?

“ Answer — Well.

“ Question — Who owns the building?

’ “ Answer — Applicant.

“ Question — Who occupies the building and for what purposes are they occupied ? How many tenants ?

“ Answer — Applicant.”

Attached to and as a part of the application are the following stipulations, inter alia:

“ But if any untrue answer has been given to the foregoing interrogatories, whereby the said company has been deceived, as to the character of the risk, or if any change be made as to tenants and occupancy of these premises, without being notified to this company, and indorsed upon their policy, then said p olicy of insurance to be void, and of no effect.”

“ And the insured hereby covenants and engages that the representations given in the application for this insurance is a warranty on the part of the assured, and contains a just, full and true exposition of all the facts and circumstances in regard to condition, situation, and value of the property insured.”

The policy also provided, that the application was a part of the policy, and was a warranty on the part of the assured, and that the policy'was made and accepted in reference to the application and the conditions thereto annexed, which were to be used and resorted to in order to explain the rights and obligations of the parties. The property insured was described in the application as a “ 2 story log dwrelling-house chunked and smeared in cracks, plastered inside, 26 by 22, situate in South Manheim township, Schuykill county, Pennsylvania.”

The substance of the representations contained in the application and in the answers to questions, is that the building insured was a log dwelling-house, two stories high, provided with a chimney and a fire place, with stoves and pipes well secured, ashes secured in safe places, and actually occupied by the insured. In real fact the building was not a dwelling-house, never having been finished for use, it was not provided with stoves and pipes, it is not certain that there was any chimney or fire place, or any provision for securing ashes, it vras not occupied by the insured, and it wfas never occupied by any person from the time of the application to the time of the fire. On the contrary,1 the uncontradicted testimony, mainly that of the plaintiff and his son, shows that it was empty and altogether unoccupied, at the time of the application, that the upper story was not plastered, that the partitions were not in, except the studding, that no person lived in it, up to the time'of its destruction, that during the whole of that time, from September 6th 1872, to October 27th 1875, it was either absolutely vacant, or occasionally used to store hay, or broom corn, or implements of agriculture, temporarily. In no sense whatever was it used as a dwelling-house for a single moment during the whole time of insurance. It is quite unnecessary to cite authorities to show, that in such a state of facts, prima facie, the policy was void. This was so by the express terms of the instrument. On behalf of the plaintiff, it was sought to avoid the consequences of the several manifest breaches of warranty appearing in the case, by the theory that Klock, the agent of the company who took the application and procured and delivered the policy, was on the premises in person, saw the building just as it was, knew that it was unoccupied, and nevertheless filled up the answers to the questions just as they are found in the policy. It is argued that his knowledge was the knowledge of the company, and that the company, and not the insured, is bound by his acts, in writing out the answers, whether they were written fraudulently or by mistake. As matter of fact it is true the answers were written on the application, by Klock, either from verbal answers made by Fromm or from his personal observation. It is also true that Klock was on the premises, saw the building as it was, and did make personal observation of its condition, and sui’roundings. But it is equally true, that Fromm signed his name to the application after it was filled out with-the answers, and did thereby adopt them as his own. Klock testifies that at the time he and Fromm were on the premises, Fromm told him he intended to finish the house shortly, and that he, or one of his family would move in. Thus he said : “ I understood Mr. Fromm to say at the time, that he would repair the house within a very short time, and either himself, or some one of his children would move in, and live there, within a shoit time.” And again in reply to a question he said:

“ Q. He did not tell you when he would fix it up ?

“ A. In a short time. I suppose from what he said, he would begin to fix up within a week or ten days.”

Again he says — “ It was in good order, only it wanted finishing, and as I said before my impression was that Mr. Fromm would finish the house and occupy it himself, or some one of his children; and under that impression I effected that insurance.” Also — “ It runs in my mind now that either a son or a daughter were to move into the house,'and the reason they said they did not move, was that they had not the furniture, they were expecting to get furniture and then they would move into this house.” Pie also testified that if it had not been for these promises and assurances he would not have taken the risk and that these were what induced him to take the application and send it to the companj’-.

Klock was Fromm’s witness and was not contradicted as to this testimony. Fromm himself testified as follows :

“ Q. What else did you say to Klock about occupying the house ?

“ A. Then I said the intention is to finish it some time, and probably I or one of my sons will move into it.

“ Q. It wras first intended that your son should move into it, and then that your son declined-going in ; and then that yon said that you were going to go into it ?

“ A. No, only the calculation was that I or one of my boys would move in when we could.

“ Q. You were living at the other house ; where was your son living at that time ?

“ A. Lived with me in the house.

“ Q. How soon was he to move in, or how soon did you expect to fix it up ?

“A. I had no time fixed for that. I just thought as quick as I could do it after I had not so many debts to pay any more I would fix it up.

“ Q. you would fix it up as quick as you could and then move in ?

“ A. And I or one of the boys would move in.

“ Q. At that time the house was not used for anything, was it?

“ A. No.”

Fromm was a Pennsylvania German and could not speak or write English, and Ellock testified that he read over the questions to him and explained whatever was necessary, speaking in Pennsylvania Dutch, and that Fromm understood it. This was not denied by Fromm, nor does he say that he did not understand what was in the application when he signed it. He does not say that he was induced to sign it just as it was, by any representations or promises made by Klock or that any kind of fraud or imposition was practiced upon him to obtain his signature. Had he' been ignorant of the contents of the application, which he does not allege, we see no reason why, in these circumstance, he should not be subject to the ordinary rule that “if one who is about to execute an instrument'can read it and neglects to do so ; or being blind or illiterate, chooses to act without requiring the contents to be made known to him, he will be bound to it, though it turn out to be contrary his mind.” Greenfield’s estate, 2 Harr. on p. 504. The case of Eilenberger v. Protective Mutual Fire Ins. Co., 8 Norr. 464, is cited and much relied upon on behalf of the plaintiff, and the rule there laid down is invoked as controlling the present case. But there the circumstances were entirely different. The insured made true answers to the question's, but the agent wrote them out differently and falsely. In addition to this the agent in answering the questions addressed to himself made false answers. Mr. Justice Trunkey, in delivering the opinion of the court, on p. 469 said, “ Upon the verity of the plaintiff’s testimony he had no knowledge of the fraud or mistake of the defendant’s agent previous to the fire. The agent falsely induced him to sign a statement which he had not made and did not intend to make.” Then after stating the false answers of the agent himself, he adds, “ By what rule shall that contract be void as respects an innocent party, who first discovers the fraud after his loss? The assurer believed both statements; the assured knew nothing of the contents of either. Which party shall suffer? By elementary principles, the one who employed and gave character to the agent and issued the policy upon his act, and not he who innocently paid his money.” On p. 468 he further says, “ The authorities go far, very likely not too far, in holding the assured responsible for his warranty and in excluding oral evidence to contradict or vary it; but they do not establish that where an agent of the assurer has cheated the assured into signing the warranty and paying the premium, and the policy was issued upon the false statements of the agent himself, the assured shall not prove the fact and hold the principal to the contract, as if he had committed the wrong.”

These citations disclose the facts, and considerations upon which the decision of that case was based, and it is only necessary to add that they have no application to the present case. The case of Cumberland Valley Ins. Co. v. Douglas, 8 P. F. S. 419 is also cited, as authority, that a description of a house as a dwelling house, or as an occupied dwelling house, does not imply a stipulation that it shall not became vacant. But in that case there was no warranty that the dwelling-house was occupied, as there is here, and in this case there is, in addition, an express agreement in the third condition of the policy, that if the building insured became vacant, or tenantless for a period of fifteen days, notice must be immediately given to the secretary, and his consent obtained in writing, otherwise the policy shall be void. It is an undisputed fact, that this building was vacant for nearly three years, and no notice was given to the company. We can not escape holding the policy void, for this reason, unless we arbitrarily disregard the positive provision of the contract. It is no reply to say that the building was vacant at the time of the application, and the agent of the company knew it, because the condition of the policy was a continuing engagement, enduring through the life of the policy. It was at all times obligatory upon the assured, and as he had the policy in his own possession, he is not at liberty to plead ignorance of its contents. In the case of Pottsville Mutual Fire Ins. Co. v. Horan, 11 W. N. C. on p. 201 we said: “ The insured was a member of the company, had the policy in his possession, and it must be presumed, lie knew it was necessary not only to notify the company, that he had erected the new building, but also to obtain the written consent to a continuance of the policy. Having failed to do this, the policy by the very terms of the condition became void.” Upon the testimony of the plaintiff and his witnesses it is clear to our minds, that the policy in suit was fatally vitiated by the breaches of wrarranty and condition to which we have referred. The defendant’s tenth point, that under all the evidence, the verdict must be for the defendant, should have been affirmed.

Judgment reversed.