Court Opinion

ID: 6292180
Source: CourtListenerOpinion
Date Created: 2022-02-18 17:05:42.662602+00
Date Added: 2024-06-11T09:00:21.994841
License: Public Domain

Concueeing Opinion by
Hoffman, J.'.
While I agree with the Majority that the lower court erred in directing a verdict in favor of the insurer, Mutual Benefit Health and Accident Association, I cannot join in the technical gymnastics employed in declaring that the “interpretation” of policy terms may be admitted into evidence despite express provisions in the disputed policies to the contrary.
It is certainly true that where an insurance policy is ambiguous and not patently clear “. . . parol evidence is admissible to explain or clarify or resolve the ambiguity, irrespective of whether the ambiguity is created by the language of the instrument or by extrinsic or collateral circumstances.” In re Herr Estate, 400 Pa. 90, 94, 161 A. 2d 32 (1960). See also Leebov v. United States Fidelity and Guaranty Co., 401 Pa. 477, 165 A. 2d 82 (1960). In the instant case, the appellant sought to *487introduce the testimony of an insurance agent, who procured the contract on behalf of the appellee. His testimony was offered to corroborate the circumstances of the execution and agreement with respect to this elimination endorsement, i.e., that both the appellant and the agent understood the exclusion to pertain to the condition in the right eye, and any direct or indirect effect therefrom.
The appellee points out that the resident agent, Mr. Fairbanks, could not bind the company by any statements or knowledge not made expressly known to the company. Each application, in the instant case, provides over the signature of the insured, as follows: “I apply to Mutual Benefit Health & Accident Association for insurance to be issued in reliance upon the truth and completeness of the answers to the above questions, and agree that: (1) the Association is not bound by any statement made by or to any agent unless written herein . . . .” The policy contained a similar integration clause, expressly stating that the agent could not act to modify the policy terms.
While it may be said as a general proposition that knowledge of a fact by the agent is deemed knowledge by the principal, so that enforcement of a contract in a manner contrary to that understanding is tantamount to fraud, International Milling Co. v. Hachmeister, Inc., 380 Pa. 407, 110 A. 2d 186 (1955); Restatement of Agency 2d, §9(3); Corbin on Contracts, Section 579; the law is clear that absent authority from the principal the agent may not act beyond the scope of his authority. The appellant argues the principle of apparent authority and concomitantly the doctrine of estoppel. While a justifiable reliance on the acts of an authorized agent may estop the principal from denying apparent authority, Restatement of Agency 2d, §8; 2A C.J.S. §157, an express provision notifying the third person that only written agreements or representations *488ratified or acquiesced to by the principal shall bind it, is enforceable. As we said in Crawford v. Manhattan Life Insurance Co., 208 Pa. Superior Ct. 150, 163, 221 A. 2d 877 (1968) : “Under such circumstances [where the application provides that the company will be bound only if the promises or statements made by the agent are incorporated in writing] our courts have held that the knowledge of a soliciting agent who has no power to bind the company will not estop the company, unless such knowledge was brought to the attention of the company and acquiesced in by the company or its authorized officers. Matovich v. Mutual Benefit Health and Accident Association, 157 Pa. Superior Ct. 604, 43 A. 2d 648 (1945).”
We believe the court properly refused the appellant’s offer of proof of the testimony of Mr. Fairbanks. While the testimony may have added in the clarification of the ambiguity, the express provisions in the application and policies prohibited such remarks from prejudicing the company at trial.
The case should be submitted to the jury for its determination. Because of the ambiguity of the words in question, the jury should be instructed that it must resolve the question of coverage by construing the words “eye trouble” in favor of the insured, and that having done that, determine if the traumatic injury to appellant’s left eye resulting in blindness was a condition independent of appellant’s prior condition in his right eye. The question of extent of liability is a step beyond the threshold issue of coverage, and may only be reached on the evidence presented after an initial determination that appellant’s disability falls under the terms of his policies.