Opinion
January 8, 1947.
January 28, 1947.
Insurance — Contract — Binder.
1. A binder is not a complete contract, but only evidence of the existence of a contractual obligation to be expressed in complete written form in the future. [19]
Evidence — Parol — Written contracts — Question of law for court.
2. Whether a writing is the entire contract between the parties so that the parol evidence rule is applicable is a question of law for the court. [19]
Argued January 8, 1947.
Before MAXEY, C. J., DREW, LINN, STERN, PATTERSON, STEARNE and JONES, JJ.
Appeal, No. 51, Jan. T., 1947, from order of C. P. No. 5, Phila. Co., Sept. T., 1943, No. 432, in case of Lester v. The Century Indemnity Company. Order affirmed.
Assumpsit.
The facts are stated in the opinion, by ALESSANDRONI, J., of the court below, as follows:
This action was brought to recover for a loss of merchandise alleged to have been sustained by the plaintiff, a corporation engaged in the retail sale of clothing and accessories in the City of Camden, New Jersey, during the period beginning January 1, 1943, and ending April 24, 1943. The claim is predicated upon a binder alleged to have been issued by the defendant insurance company, supplementing a policy of mercantile open stock burglary insurance. At the first trial a verdict was returned in favor of the plaintiff, whereupon the court granted the defendant's motion for a new trial. At this trial a verdict was returned in favor of the defendant and the plaintiff has filed this motion for a new trial.
On October 28, 1940, the defendant issued a policy of mercantile open stock burglary insurance to the plaintiff. This contract of insurance was to remain in force and effect for a period of three years. On December 3, 1942, the plaintiff, by letter, requested additional insurance covering the plaintiff in the event someone secreted himself in the store during business hours, and after the store was closed looted the premises. On December 8, 1942, the general agent of the defendant company advised the plaintiff that the burglary policy did not cover such a contingency, but that they had arranged a binder, presently effective, which they had not endorsed on the policy because of the considerable cost of the additional protection, amounting to fifty per cent of the premium then paid.
Subsequently a number of conferences were held between officers of the plaintiff corporation and representatives of the general agent. The evidence submitted on behalf of the plaintiff establishes that the parties intended a standard form of endorsement covering theft of any kind and known as a mercantile open stock theft endorsement. The evidence also establishes that the National Bureau of Casualty and Surety Underwriters, of which the defendant was a member, issued only one type of endorsement, the cost of which amounted to fifty per cent of the premium charged for the burglary insurance. It is contended by the plaintiff that they were covered for this type of loss by reason of the charge made for the additional coverage.
On May 1, 1943, the plaintiff cancelled the burglary policy, the binder, and all policies which the general agent of the defendant company had handled. On or about June 3, 1943, the plaintiff was notified by the Philadelphia Detective Bureau that they were in possession of certain clothing which appeared to have been stolen. Representatives of the plaintiff corporation identified two suits out of the twenty garments as their property. Immediately thereafter the plaintiff caused an investigation to be made and as a result of an examination of all their books and records filed a proof of loss on July 26, 1943, amounting to $6,678.76.
The evidence established that during the period from January 1, 1943, to April 24, 1943, almost four hundred items of clothing were alleged to have been stolen. Representatives of the plaintiff identified an alleged thief held by the Philadelphia Detective Bureau as a regular customer who had made purchases at their store from January 23d to April 24, 1943. This individual was a professional thief, and, in addition to the losses sustained by the plaintiff, he was accused of stealing an even larger quantity of goods from a Philadelphia retail store during the same period of time.
The defendant denied liability on the ground that it had not covered the plaintiff by any mercantile open stock theft endorsement, and, secondly, that the plaintiff failed to establish any loss by theft.
In support of the motion for a new trial, the plaintiff argues that the verdict was against the weight of the evidence. It is contended that the preponderance of the evidence shows that the binder was the only type which the defendant issued, and that an insurance company cannot charge the full rate for a theft coverage rider without giving the specific assured complete coverage. In order to warrant the granting of a new trial on the ground that the verdict is against the weight of the evidence, the preponderance of evidence must be clear and decisive. 6 Standard Pennsylvania Practice, p. 320. Since the jury was required to consider not only the question of whether the plaintiff was covered, but also whether a loss had been established within the meaning of that coverage, we are not convinced that there is merit in this contention. A reading of the record in its entirety raises serious question in the mind of this court as to the source of the alleged loss.
The plaintiff also argues that the Learned Trial Judge erred in failing to grant the plaintiff's motion for the withdrawal of a juror on the ground of prejudicial remarks made during the trial. Three of the four remarks called to our attention are so far from being prejudicial that no exception was taken to them by the plaintiff's counsel at the trial of this case. The fourth remark which gave rise to the plaintiff's motion for the withdrawal of a juror constituted an expression of opinion by the court which the jury was instructed to disregard. The comments of a trial judge during the course of a trial is a matter which must be left to his sound discretion. Under all the circumstances we do not believe the alleged error is sufficient to warrant the granting of the plaintiff's motion. Crumley v. Pennsylvania Railroad Co., 272 Pa. 226. Lippincott v. Warren Apartment Company, 312 Pa. 480.
The third complaint of the plaintiff was the action of the trial judge in permitting cross-examination by the defendant of shortages occurring in the regular course of business for the six months immediately prior to the period of alleged coverage. Under the terms of the contract of insurance, which the plaintiff seeks to establish, normal loss must be shown in reduction of the amount of the claim. The plaintiff had filed a proof of loss covering an entire year, including therein the period of six months prior to the date on which this binder became effective. The examination of the plaintiff's witness was proper even if its purpose was merely to test the witness' credibility. Cross-examination is not confined to the precise facts elicited upon direct examination, but may be extended to all inferences, deductions and conclusions which may be drawn therefrom. The scope of cross-examination rests within the trial court's sound discretionary power. Conley v. Mervis, 324 Pa. 577. We do not believe that that discretion was abused.
Finally, the plaintiff argues that the trial court erred in affirming and reading to the jury two points for charge presented by the defendant. These points attempted to cover the principle of law enunciated in the decision of Gianni v. Russell and Company, Inc., 281 Pa. 320. The parol evidence rule applies when the writing is the entire contract between the parties. If it appears that the written contract is complete within itself, it is conclusively presumed to represent the entire engagement of the parties. The trial court specifically affirmed the defendant's request as a general statement of the law, but added that "the jury must decide if the facts in the case were controlled by it." A request to charge the jury that the two letters of December 3d and December 8, 1942, constituted a complete contract was refused.
A binder is not a complete contract, but only evidence of the existence of a contractual obligation to be expressed in complete written form in the future. Eames v. Home Insurance Company, 94 U.S. 621. Rossi v. Firemen's Insurance Company, 310 Pa. 242. The court permitted oral evidence and conducted the trial of this case on the theory that the parol evidence rule did not apply. The question of its application was one of law to be determined by the court and not a question to be considered by the jury. Colonial Manufacturing Company v. Carideo, 142 Pa. Super. 485. Sheesley v. Bisbee Linseed Company, 337 Pa. 197.
It appears there is merit in this reason assigned in support of the plaintiff's motion for a new trial. Except for this error, we do not believe that the verdict of the jury should be disturbed, and reluctantly therefore grant the plaintiff's motion and order that this matter be tried for a third time.
Now, to wit, this 17th day of October, 1946, the plaintiff's motion for a new trial is granted.
Defendant appealed.
Henry S. Ambler, with him Frank R. Ambler, for appellant.
David S. Malis, for appellee.
The order for a new trial is affirmed on the opinion of Judge ALESSANDRONI.