Fay v. Swicker

Ohio Supreme Court

Decided December 16, 1950

Ohio Supreme Court · decided 1950-12-16

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Decided 1950-12-16

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Cited by 12 later decisions — most recently August 2009

7 state decisions

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Taft, J.,

¶1 concurring. I concur in the syllabus, judgment and opinion of the majority.

¶2 By the terms of the written application signed by the insured Swicker, he expressly warranted certain facts stated therein to be true and agreed that the insurance company might rely upon those facts as warranted in issuing any automobile policy. Such an agreement would necessarily amount to an agreement that any knowledge of the insurance company’s agent with respect to the facts so warranted should not be imputed to the insurance company. Under paragraph two of the syllabus and for the reasons given in the majority opinion in support of that paragraph of the syllabus, such an agreement is valid and enforceable.

¶3 The nonwaiver provision of the policy, sent by the insurance company to its agent but never delivered by the agent to Swicker, represented an agreement to the same effect.

¶4 In each of the Foster and Glass cases, cited in the majority opinion, there was no agreement between the insured and the insurer, as in the instant cases, that the Ohio common-law rule set forth in paragraph one of the syllabus in the instant cases should be supplanted with a different rule. See the Foster case, at page 191.

¶5 While the policies involved in those cases did pro *353 Mbit waivers by any agent of the company, no such waivers were involved. In each of those cases, the knowledge of the agent, under the common-law rule set forth in paragraph one of the syllabus in these cases, was the knowledge of the principal. It follows that the action taken by the principal with that knowledge represented, in effect, a waiver by the insurer, not merely a waiver by the agent.

¶6 The Lind case, cited in the dissenting opinion, dealt only with problems with respect to waiver after occurrence of a loss.

¶7 Of course, the General Assembly has the power to change the rule of law set forth in paragraph two of the syllabus of these cases. Cf. Section 9583, General Code. However, until the General Assembly does that, this court should not disregard the general right of parties to enter into contracts of the kind described in paragraph two of the syllabus.

¶8 As stated by Warden, J., in Baker v. Jordan, 3 Ohio St., 438:

¶9 ‘ ‘ Among the purely artificial rules of evidence, none much more commends itself to regard than that which forbids the parties to a solemn contract, reduced to the certainty of a writing, to alter, vary, limit, enlarge, or contradict what they have thus made certain, by the recollections of witnesses, attempting to show what the parties said before or at the time of signing the contract. ’ ’

¶10 In other words, where parties have expressed their agreements in writing, the law has established the parol evidence rule to avoid the uncertainties which result from controversies arising because one party testifies that he did say something and the other party testifies that he did not. The same reasons for establishing that rule should encourage enforcement of contracts of the kind described in paragraph two of the *354 syllabus which, will likewise avoid uncertainties resulting from similar controversies.

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Case posture

Posture: APPEALS from the Court of Appeals for Erie county. As the present cases involve substantially the same facts and the same principles of law apply equally to each of them, they are decided together. Robert A. Fay, administrator, appellee in case No. 32047, and Abelyn Lara, appellee in No. 32048, were plaintiffs, respectively, in actions instituted by means of supplemental petitions against The Republic Mutual Insurance Company, appellant in each case. Hereinafter we shall designate Fay and Lara as plaintiffs and the insurance company as defendant. Howard B. Swicker, a defendant in each case, will hereinafter be designated Swicker. Each of the plaintiffs instituted an action against Swicker to recover damages resulting from an automobile accident and each recovered a verdict and judgment against Swicker. Neither of such judgments having been satisfied for more than 30 days after their rendition, plaintiffs filed supplemental petitions against defendant as the casualty insurer of Swicker, under Section 9510-4, General Code. Defendant in its answers admitted the recovery of the judgments against Swicker, but alleged facts and claimed that, as the result of those facts, Swicker had no effective insurance coverage with defendant. The facts from the undisputed evidence and found by the trier thereof to be true, and which we, therefore, assume are true, are as follows: One Zuercher was a soliciting agent for defendant, with authority to take applications for various types of insurance and forward them to the home office. On March 5, 1946, Swicker came into Zuercher's office and signed an application for casualty insurance on his Dodge automobile, which was the one involved in the accident which was the basis of plaintiffs' actions. In the written application which was signed by Swicker there was contained the following provision: It is further agreed that the writing of this or any other application by the company's agent does not bind the company on any insurance risk and that the company's liability begins only after such application has been received and approved by the home office of the company at Columbus, Ohio. I hereby warrant the statements and declarations contained in the foregoing application to be true and I agree that the same may be relied upon by the company in issuing any automobile policy to me without an additional application, whether such policy is a renewal of the policy hereby applied for or not and I agree to notify the company of any changes or circumstances which would affect the issuance of any future policy. Item six of the application reads in part as follows: No automobile insurance covering the insured or other drivers of the automobile has been declined or cancelled * * * except as follows: * * * Following such statement are the words, no exceptions, in Zuercher's handwriting. Item 10 of the application reads: The insured or other drivers of the automobile has not had an automobile accident or loss during the past two years except * * *. Following that statement there is written in Zuercher's handwriting, One small claim last year. Both of the foregoing written statements are false for, as a matter of fact, Swicker had had as to his automobile a fire loss in February 1945, during the same month a collision loss, in August 1945 a property damage loss, in November 1945 collision and medical payment losses, and later in 1945 another collision loss. At the time of the foregoing losses Swicker was insured with respect to his automobile by the Farm Bureau Mutual Insurance Company of Columbus and that company had cancelled its policy as of March 9, 1946, and had notified Swicker of such cancellation by letter dated February 28, 1946. Zuercher sent the application, which had been signed by Swicker and which contained among other things the foregoing statements, to defendant's home office in Columbus, and it is undisputed that no letter of any kind or character accompanied the application. The trial court found, and there was ample evidence to support such finding, that Swicker had informed Zuercher of the fact that Swicker had had several accidents and had had his automobile insurance cancelled. Nevertheless, Zuercher wrote the answers aforementioned in items six and ten of the application and Swicker signed such application and warranted the truth of such answers. He claimed he did not know what answers had been written in. However, he was 28 years old, a high school graduate, and, from aught that appears in the record, of average intelligence. Defendant issued a policy of insurance on Swicker's automobile solely on the information contained in the application. The policy contained in addition to the same statements and declarations set forth in the application the following clauses: By acceptance of this policy the named insured agrees that the statements in the foregoing declarations are his statements and representations, which he warrants to be true, that this policy is issued in reliance upon the truth of such representations, and that this policy embodies all agreements existing between himself and the company or any of its agents relating to this insurance. Misrepresentation and fraud. This entire policy shall be void if insured has concealed or misrepresented any material fact or circumstance concerning this insurance or the subject thereof; or in case of any fraud, attempted fraud, or false swearing by the insured regarding any matter relating to this insurance or the subject thereof, whether before or after a loss. Waiver or change. No notice to an agent, or knowledge possessed by an agent or by any other person shall be held to effect a waiver or change in any part of this policy, nor estop the company from asserting any right under the terms of this policy, nor shall the terms of this policy be waived or changed, except by endorsement issued to form a part hereof, signed by the president or secretary of the company. Swicker testified that Zuercher had told him that he would leave it up to the company whether it would issue the policy. Swicker also testified that he had offered several times to pay Zuercher the premium on the policy, but that Zuercher had told him to pay the premium when he received the policy. The policy was issued and sent to Zuercher but was never delivered to Swicker. On March 11, 1946, the home office of defendant learned of the cancellation of the Farm Bureau policy from a service organization. On the same day defendant received a notice of the accident of March 9, 1946, which was the basis of plaintiffs' law suits. On March 26 defendant wrote a letter to Swicker in which it informed him that defendant had learned that the Farm Bureau Mutual Insurance Company had issued an automobile liability policy to Swicker in December 1944; had cancelled it effective March 9, 1946; had notified Swicker of such cancellation by letter dated February 28, 1946; and had cancelled the policy because of six accidents and losses in which Swicker's automobile was involved and which had occurred from February to November 1945. The letter also told Swicker that had he made disclosure of such cancellation and accidents as requested in the application for insurance with defendant, defendant would not have issued its policy to Swicker, and for such reasons defendant elected to treat such policy as void from the beginning and disclaimed any liability thereunder. Upon the foregoing facts, the Court of Common Pleas, hearing the cases on the supplemental petitions, the answers and the evidence, and treating the cases as though replies had been filed, found for the plaintiffs against defendant and rendered judgments upon such findings, which judgments were affirmed by the Court of Appeals. These cases are before this court as the result of the allowance of motions to certify.

Source: CourtListener

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Ohio Supreme Court

Parallel citations

96 N.E.2d 196
43 OhioOp. 243