decided: July 12, 1978.
PATRICK CAMPBELL, MORRIS YELEN AND MARY P. YELEN, A/T/I/M/A, APPELLANTS,
ROYAL INDEMNITY COMPANY OF NEW YORK
No. 136 October Term, 1977, Appeal From the Order Entered August 30, 1976, by the Court of Common Pleas, Civil Action-- Law, of Luzerne County at No. 1318 July Term, 1966.
Barry A. Yelen, Wilkes-Barre, for appellants.
Robert E. Marsh, Jr., Wilkes-Barre, for appellee.
Watkins, President Judge, and Jacobs, Hoffman, Cercone, Price, Van der Voort and Spaeth, JJ. Jacobs, President Judge, and Spaeth, J., concur in the result. Watkins, former President Judge, did not participate in the consideration or decision of this case.
[ 256 Pa. Super. Page 314]
This appeal arises from a jury verdict for the defendant in an assumpsit action in the Common Pleas Court of Luzerne County. Appellant's motions for new trial and judgment n.o.v. were denied. We affirm the decision of the lower court.
Appellant Patrick Campbell owned a wooden frame residential building in Wilkes-Barre, Pennsylvania. The building was unoccupied for the purpose of converting it from a three apartment to a six apartment dwelling. Pursuant to an oral contract, appellant Morris Yelen, a licensed general building contractor, was making, or preparing to make the necessary alterations in the building. Yelen testified that Campbell owed him a sum of money for work done on the premises, although at trial evidence was adduced that no
[ 256 Pa. Super. Page 315]
signs of physical changes on the building by Yelen were evident. When the money was not forthcoming, Yelen took out a fire insurance policy on the building with Royal Indemnity, in March, 1965.
In June, 1965, a fire occurred at the insured premises and suit was brought in 1974 to recover the insurance proceeds from the appellee company.*fn1 At trial, the insurance company argued that the policy was not enforceable at the time of the fire due to the fact that an effective cancellation*fn2 had been mailed to appellants prior to the fire, and that Yelen had no insurable interest under the policy. The jury found for the insurance company.
We will discuss two of the major issues presented on appeal:*fn3 first, whether the trial court erred in charging the jury that any defense the insurance company had against the owner of the building, Campbell, was also good against the contractor, Yelen,*fn4 and second, whether the insurance company's proof of notice of cancellation was properly admitted as an exception to the hearsay rule.
In deciding the first issue, we must look to the underlying question of whether or not the contractor, Yelen, had an insurable interest in the property involved. In an action on a fire insurance policy, the question whether a person had an insurable interest is one of fact for the jury to decide. Shindler v. Ins. Co. of North America, 121 Pa. Super. 483, 184 A. 262 (1936). Since the jury found against Yelen, it either found that Yelen had no insurable interest, in which
[ 256 Pa. Super. Page 316]
event his recovery under the policy was impossible and any error in that portion of the charge objected to, supra, would be harmless, or in the alternative, the jury found the contractor had an insurable interest which was invalidated by an effective notice of policy cancellation.
It is the law that a contractor has an insurable interest in the building for which he furnishes skill and material, and that he may protect his interest through an insurance policy on the premises. Clarke & Cohen v. Hartman & Co., 105 Pa. Super. 118, 159 A. 460 (1932); 44 C.J.S. Insurance § 185 (1945). However, there must actually be work done on the premises and therefore money owed the contractor. In this case, Yelen testified he had been working on the Campbell building during the year prior to the fire. He said he was replacing partitions and doing plumbing, heating, and carpentry work. Campbell testified that the contractor replaced partitions and windows, did some plastering work, and made a change in the stairway. To the contrary, there is testimony by a fireman called to the fire that there were no signs of remodeling being done on the premises, but that the steps were old and creaked, paint and wallpaper were peeling off the walls, and the building was in a general state of disrepair. Given this factual situation, the jury had the right to refuse to believe the testimony of Campbell and Yelen and could have reasonably found that Yelen had no insurable interest in the premises. Thus, the instruction of the court could have had no deleterious effect on the jury since the contractor could not recover under the policy which insured premises in which he held no insurable interest.*fn5
[ 256 Pa. Super. Page 317]
In the event the jury found Yelen had an insurable interest, they then had to decide whether the policy had been cancelled. The insurance policy in question, which was entered into evidence as plaintiff's exhibit number 1, was on the standard form required by statute for a fire insurance policy.*fn6 The policy provision for cancellation requires the company to give the insured a five days' written notice of the cancellation.*fn7 Case law construes this to require receipt of the notice of cancellation. Hendricks v. Continental Insurance Co., 121 Pa. Super. 390, 183 A. 363 (1936); Pomerantz v. Mutual Fire Ins. Co., 279 Pa. 497, 124 A. 139 (1924); Keystone Ins. Co. v. Morello, 61 Pa. Dist. & Co.2d 616, 96 Montg. 94; affd per curiam 225 Pa. Super. 756, 306 A.2d 344 (1972). Where the fact is established that the notice of cancellation is actually mailed, then a presumption of due receipt may be applied. This presumption of receipt may be rebutted by testimony to the contrary; however, when the rebutting testimony is only oral, the question of the credibility of the witnesses is one for the jury to decide. Neubert v. Armstrong Water Co., 211 Pa. 582, 61 A. 123 (1905).
In the instant case, the insurance company introduced into evidence as defendant's exhibit Number 1, the
[ 256 Pa. Super. Page 318]
company's copy of the original notice of cancellation.*fn8 The notice was addressed to Campbell and Yelen at Campbell's address, just as the face of the policy read. On the face of the notice is a metered postmark, affixed at the insurance company's office, and an additional postal date of mailing stamp reading "Wilkes-Barre, PA, S.A.A." and the date. The notice was signed by an authorized representative of the insurance company, although the reverse side containing a "Statement of Mailing" was not signed. Testimony of the insurance company witness revealed he knew the customary procedures for mailing such notices, but the act of mailing this particular notice was not established. In such a situation, the issue of whether this particular notice was mailed was one of fact for the jury. Paul v. Dwyer, 410 Pa. 229, 188 A.2d 753 (1963); Verecchia v. DeSiato, 353 Pa. 292, 45 A.2d 8 (1946); Mackiw v. Pa. T. & F. Mutual Cas. Ins. Co., 201 Pa. Super. 626, 193 A.2d 745 (1963). If the jury found that the notice was mailed, then the rebuttable presumption of due receipt is applicable to determine whether the provision for cancellation of the policy was met.
When reviewing the facts of this case, we conclude the jury could have found, from the tangible evidence on the face of the notice of cancellation, that such a notice was mailed. The jury then had the right to disbelieve the testimony of Campbell and Yelen concerning non-receipt. Thus we adopt the reasoning of the lower court*fn9 in finding
[ 256 Pa. Super. Page 319]
that the jury could have found the cancellation was effective which would cut off the contractor's right to recover.*fn10 Such a finding for the insurance company is supported by the evidence and the lower court instruction was not in error.
The notice of cancellation in the case was admitted into evidence as an exception to the hearsay rule under the Uniform Business Records as Evidence Act."*fn11 The Act states, in pertinent part,
"A record of an act, condition or event shall, insofar as relevant, be competent evidence if the custodian or other qualified witness testifies to its identity and the mode of its preparation, and if it was made in the regular course of business at or near the time of the act, condition or event, and if, in the opinion of the court, the sources of information, method and time of preparation were such as to justify its admission." 28 P.S. § 91b.
Appellants contend, that the witness of the insurance company was not the actual "custodian" or "other qualified witness" of the specific notice of cancellation in this case and hence the notice of cancellation should not have been admitted into evidence under this Act.
The record reveals that at the time the notice was allegedly sent, the insurance company's witness was in control of cancellation notices. He testified he checked the notices after they were typed, signed the notices, and forwarded
[ 256 Pa. Super. Page 320]
them to the mailing department of the company. In this particular instance, a signature other than that of the witness appeared on the notice. Appellants argue that this fact removed the witness from being "qualified" to testify concerning the notice in question.
The business records exception to the hearsay rule was meant to allow for the situation where larger departments for recording business transactions make it virtually impossible to identify each person at each phase of the recording and mailing process.
"Under these circumstances, to require the entrant to have personal knowledge of the event recorded, and to require proof of the identity of the recorder, would exclude almost all evidence concerning the activities of large business organizations -- a result diametrically opposed to the Uniform Business Records as Evidence Act." Fauceglia v. Harry, 409 Pa. 155, 159, 185 A.2d 598, 600 (1962).
Although the witness in the instant case had no personal recollection of the notice of cancellation addressed to appellants, he did know the customary procedures of the company. Thus we find the witness was properly "qualified" to testify concerning this notice of cancellation, and the notice was properly introduced into evidence as a business records exception to the hearsay rule.*fn12
Order of the lower court affirmed.