Franklin Fire Ins. v. Coates

Bartol, J., delivered the opinion of this court. The several questions presented by this appeal may be slated in the three following propositions: 1. Was the preliminary proof, required by the 8th condition of the policy, waived by the appellants ? 2. Had the appellees any iusurable interest in the property named in the policy ? 3.

Was there, in obtaining the insurance, any misrepresentation or concealment of facts material to the risk, which renders the policy void ? These propositions will be considered in the order in which they have been stated. 1. The testimony of Mr. P. II. Smith, the agent of the company, is, that a day or two after the fire, George G. Davis, who had obtained the policy, called at the office of wit ²⁹⁴ ness, anti informed him that the houses had been destroyed by fire, and demanded the amount of the loss, stating, at the time, that the said buildings belonged to him, Davis, and not to Coates & Glenn.

The witness then informed Davis that the defendant had insured Coates & Glenn’s property, and not the property of Davis, and that the defendant was not upon the risk, if the property insured and burned was the property of Davis, and that the defendant would not pay the loss to said Davis. That some day or two afterwards, one of the plaintiffs called upon the witness and asked for payment of their loss upon the buildings mentioned in the endorsements upon the policy, and that witness informed the plaintiff that the defendants had, by their policy, insured the property of Coates & Glenn, and not the property of George C. Davis, and that the property which had been insured as the property of Coates & Glenn, in said policy, was the property, not of Coates & Glenn, but of George C. Davis, as he, the witness, had learned from Davis since the fire, and that the defendant was not upon the risk, and would not pay the amount of the loss. That the plaintiff admitted that the houses insured were the property of Davis, and witness never afterwards heard from either of the plaintiffs, or from Davis, in regard to the loss. Upon cross-examination the witness stated, that both upon the application of Davis and of one of the plaintiffs, for the amount of the loss, the witness stated to both of the applicants that the defendant was not upon the risk, and would not pay the amount of the loss; that the defendants had, in their policy, insured plaintiff’s houses, and not Davis’, and that witness would probably-have refused to receive any preliminary proof of said loss, if any had been offered to him; that no preliminary proof was offered to him; that the time for preliminary proof had not arrived, as it was only a day or two after the fire, and nothing was said by any one about it, but that if it had been offered, he thought he would have refused to receive it, the case being too clear in favor of the defendant not being on the risk, to receive preliminary proof of the loss.

The witness further-stated, upon reflection, that if preliminary proof of the loss had been offered to him, as agent of the defendant, either by Da ²⁹⁵ vis or the plaintiff, who called ou him, he would probably have received such proof and transmitted it to the company in Philadelphia, as his duty probably required. The witness, on cross-examination by the plaintiffs’ counsel, then testified that he told the plaintiff, who called on the occasion after the fire, mentioned in his examination-in-chief: “The company won’t pay. They are not on the risk. The witness added: “The position 1 took precluded the offer of preliminary proof on their part.

I took the ground we had nothing to do with it.” This proof, in our opinion, dearly shows a waiver by the agent of the company, of preliminary proof. In the case of Allegre vs. Insurance Co, 6 H. & J., 408 , a letter from the defendant, in which it was stated, “the company decline the payment, under a persuasion that the company are not answerable for the same,” was a waiver of further preliminary proof. On page 433, the court say, “If they intended to refuse payment of the loss because the invoice, a customary part of the preliminary proofs, had not been laid before them, it was their duty so to have informed the insured, and their failure to do so, and the writing of such a letter, was a waiver of all further preliminary proofs.” Applying the principle there decided, to the present case, we think the seventh prayer of the defendant was properly refused. 2. The second question for our consideration is, whether the appellees had an insurable interest in the property named in the policy ?

The evidence shows that the property belonged to George G. Davis, and not to the appellees. Davis held, both at the time of the insurance and of the fire, the whole estate, legal and equitable. The interest of the appellees in the premises, and for the loss of which they claim compensation under the policy, arose as follows: They were lumber merchants. Davis, a carpenter, purchased from them lumber for the purpose of building the houses mentioned in the policy.

Being unwilling to furnish him the lumber upon his mere credit, it was agreed between them and Davis that he would insure, for their benefit, the lumber as they might furnish it, and the houses as the ²⁹⁶ lumber might, by degrees, be worked into them, or employed in their construction, so as to protect them, by said insurance, to the value of the lumber which (hey might so furnish. This arrangement was not communicated to the insurers. The policy was obtained by Davis, in the name of Coates & Glenn, and the insurance was first upon the lumber, and afterwards upon the two dwelling-houses. The lumber was furnished to Davis, and used by him in the construction of the houses, during a period extending from the 2d of August to the 29th of November 1847.

On the 9th or 10th of January, before the buildings were finished, they were entirely destroyed by fire. In our opinion, both at the time of the making of the policy and of the fire, the appellees had, as material-men under the statute, a lien upon the buildings to the amount of the lumber furnished b}7 them to Davis, and used in their construction. It has been argued by the appellants that no lien exists until a claim is filed of record under the 10th and 11th sections of the Act of 1838, and for this construction, they rely upon the language of the Court of Appeals, in Carson vs. White, 6 Gill, 27 , where it is said: “No mechanic has, in virtue of the Act of Assembly, a lien on the house which he has built or repaired, unless he has