Eagle, Star & British Dominions Insurance v. Main

²²² Amaxs, J., delivered the opinion of the Court. This suit is an attachment on a judgment held by appellee, George F. Main, against Charles E. Wilson, in which appellant, the Eagle, Star & British Dominions Insurance Company, Ltd., was returned as garnishee. Wilson is the beneficiary named in an insurance policy, issued by appellant, insuring his automobile against fire and certain other injuries, and the alleged indebtedness of appellant W Wilson grew out of the loss of said automobile by fire. The plea filed by the garnishee in its own behalf was “that at the time of laying the said attachment in its hands, it had not, nor at any time since has it had, nor has it now, any of the property, goods, chattels or credits of the said defendant in its hands, except the sum of $7.6?) which is fully paid into court.” The indebtedness admitted is for a premium paid by Wilson.

Thi,s appeal is, from a. judgment in favor of the plaintiff against the garnishee. In the policy, under the head of “Warranties,” is, this clause: “The following are statements of facts known to and warranted by the assured to he true, and the policy is issued by the company relying upon the truth thereof.” Then follow five groups of facts, the third of which is as follows: “3. The facts with respect to the purchase of the automobile described are as follows: Purchased by the • assured, Mo. 10, year, 1919; new or secondhand, secondhand; actual cost to assured, including equipment. $1,000.00. The automobile described is fully paid for by the assured and is not mortgaged or otherwise encumbered, except as follows: Yes.” Among the conditions are the following: “2.

It is a condition of this policy that it shall be null and void: “e. If the interest of the assured in the property be other than unconditional and sole ownership, or if (lie subject of this insurance be or become encumbered by any lien or mortgage except as stated in warranty No. 3 or otherwise endorsed thereon.” ²²³ “Misrepresentation and Fraud — This entire policy shall be void if llie assured or his agent lias concealed or misrepresented, in writing or otherwise, any material fact or circumstance concerning this insurance or the subject thereof, or if the assured or his agent shall make any attempt to defraud this company either before or after the loss.” The amount of the policy is $900. There is no controversy about the fact that at the time ihe policy was applied for and issued there was a chattel mortgage on the automobile for $600, being for the balance of purchase money, of the existence of which the assured was aware. Nor is it contended that the company or its agent, Mi*.

Lefevre, knew of this mortgage. It appears from the undisputed evidence that the agent wrote the word “yes” in warranty No. 8. There is a conflict of testimony as to whether this was done on information received from the assured, the agent testifying that Wilson never disclosed to him the fact that there was a mortgage on the automobile, but told bim it was fully paid for; and Wilson testifying that he made no such statement, and that he did not disclose the fact of the encumbrance because the agent did not ask him about it. The policy was delivered to the assured a day or two after its date, September 2nd, 1920, and the automobile was destroyed by fire on January 17th, 1921.

There are five bills of exception, of which four are to rulings of the trial court on the evidence and one to the ruling on the prayers. It will be necessary to consider only the last. The sole question to he determined is, did the company waive the warranty and condition within the policy that the property issued was unencumbered, assuming the truth of the testimony offered by appellee that the agent of appellant failed to inquire about the condition of the automobile in reference to encumbrances, but conceding that neither appellant nor its agent had any knowledge of the mortgage, ²²⁴ and is it estopped to rely on the undisclosed mortgage as a defence to the action ? We think this question is answered in the negative by the case of Globe Ins.

Co. v. Duffy, 76 Md. 293, citing with approval N ew York Life Ins. Co. v. Fletcher, 117 U. S. 519, and followed by Forwood v. The Prudential Insurance Co., Ill. Md. 254. In the Dwffy case, supra> it was contended by the plaintiff that true answers were given by the assured to the questions in the application, but that the medical examiner, the agent of the company, had written the answers, not as given by the assured, but falsely.

Judge McSherry, who wrote the opinion, said: “If the medical examiner was the agent of the company, it surely requires no argument to show that it was not within the scope of his authority to mislead and deliberately impose upon his principal. His agency, from the