Goldmann, Freund and Conford. The opinion of the court was delivered by Conford, J.A.D.
This is an action on the theft coverage provision of a policy of automobile insurance. Plaintiff recovered a judgment against defendant after trial before a judge and jury in the Law Division, Camden County, for the value of an automobile stolen, while parked, two months after his purchase of the insurance. Defendant's appeal is grounded in the contention that it was wrongfully refused the judgment in its favor for which it moved at the conclusion of plaintiff's case and again at the conclusion of the whole case.
During the year 1953 there was outstanding a master automobile policy issued by defendant to Radio Corporation of America (R.C.A. Victor Division) (hereinafter referred to as "R.C.A.") under which any employee of the latter could obtain insurance on his automobile effective until the 30th day after termination of his employment by the company. It is fair to infer from the record that Marsh & McLennan,
insurance agents, acted as the soliciting and issuing agency for the defendant in connection with the R.C.A. business of the defendant. Its name appears on the back of the master policy and it maintains an office in an R.C.A. building in Camden where it receives applications for insurance from individual employees of R.C.A. and forthwith issues to them certificates of insurance under and subject to the provisions of the master contract.
On January 22, 1953 plaintiff, then an R.C.A. employee, went to the office mentioned and applied for insurance on his car to a Mrs. Fortman, then employed by Marsh & McLennan as a clerk. She wrote out the answers to the questions on an application blank on the basis of his responses to her questions. One item on the blank calling for an answer was "Mortgage or other interest," with space for specification of the "address" and "termination date" relative thereto. These blanks were not filled in. Mrs. Fortman asked plaintiff no question as to any mortgage on the car and he volunteered no information on the subject at that point in the procedure but signed the application. In fact, plaintiff's interest in the car was then subject to a conditional sales contract in favor of Associate Discount Company. Mrs. Fortman then turned the application blank over to a fellow clerk who typed out a certificate of insurance. The latter asked plaintiff whether there was an encumbrance or mortgage on the car and called Mrs. Fortman's attention to the omission. Plaintiff's uncontradicted testimony is that he thereupon told the clerks the car was financed with "Associates" but that Mrs. Fortman said: "That is not important, I never fill them in anyway." The typed-up certificate of insurance was thereupon handed to plaintiff and he was directed to go to the general offices of the company to pay the premium, which he did. The certificate, like the application blank, contained blank spaces for insertion of the information as to "Mortgage or other interest" and those spaces were unfilled.
Mrs. Fortman testified that she filled out the application blank but that she had no recollection of the details of the particular transaction. She said, however, that where there
is no encumbrance, it is the practice of the office to write the word "none" in the blank space. She testified she received her paycheck from Marsh & McLennan, but answered in the affirmative the question "However, all you did was on behalf of Zurich [co-insurer] and Northern Insurance, is not that correct?"
Defendant cites the recitation, under the heading, "Conditions applicable to this insurance," at the bottom of both the application and certificate, of the following: "Your insurance coverage shall be subject to all of the terms, limitations and conditions of the master policies which are filed with the General Office, Insurance Division, Camden, N.J." The master policy, under "Declarations," Item 5, provides: "Except with respect to bailment lease, conditional sale, mortgage or other incumbrance the insured is the sole owner of the automobile, except as stated herein." Under the heading, "Exclusions," the policy provides that it does not apply "(b) under any of the coverages, while the automobile is subject to any bailment lease, conditional sales, mortgage or other incumbrance not specifically declared and described in this policy." It does not appear that plaintiff was shown or knew of the provisions of the master policy. Defendant's primary ground of appeal is that the failure of the application to disclose, and of the certificate to state the encumbrance voids the policy and relieves it of liability thereon. Plaintiff's response is that the company is estopped from raising the point because the omission was due to the failure of its agent to fill in the information given to the clerks in the Marsh & McLennan office.
It may be said at the outset that the proofs negative any fraud or intentional concealment by plaintiff. Since Mrs. Fortman testified, as noted, that the office practice was to write the word "none" where there was no encumbrance, and the application and certificate were blank in this instance, it is to be said for plaintiff, at the least, that he did not tell the clerks that there was no encumbrance. From the testimony the jury had no choice but to accept plaintiff's explanation as to the omission. [35 NJSuper Page 509] Plaintiff is on firm ground in urging estoppel against defendant's present invocation of the exclusionary provisions of the policy. If, as will presently be seen to be the case, the Marsh & McLennan staff must be taken to have been acting for defendant in writing the insurance on plaintiff's car, the insurer cannot now defeat a claim on the policy on the basis of an omission in the application blank and certificate due solely to the failure of its own agents to fill in pertinent information which plaintiff was willing to supply. It is precluded by easy application to the present facts of the familiar principle of equitable estoppel, or estoppel in pais. Redstrake v. Cumberland Mutual Fire Ins. Co. , 44 N.J.L. 294, 301 (Sup. Ct. 1882); Basch v. Humboldt Mutual Fire and Marine Insurance Co. , 35 N.J.L. 429 (Sup. Ct. 1872); see Goldstein v. Metropolitan Casualty Ins. Co. , 14 N.J. Super. 214, 218 (App. Div. 1951) and Carson v. Jersey City Insurance Co. , 43 N.J.L. 300 (Sup. Ct. 1881), affirmed 44 N.J.L. 210 (E. & A. 1882); 1 Mechem on Agency (2 d ed. 1914), § 1073, p. 774; 17 Appelman, Insurance (1945), § 9402, p. 13; 16 Id. , § 9088, p. 622; a fortiori , where the non-disclosure is due to fraud by the agent. Heake v. Atlantic Casualty Insurance Co. , 15 N.J. 475 (1954). The plethora of cases of this type (Annotations 148 A.L.R. 507; 117 A.L.R. 790; 81 A.L.R. 833) attests to the frequent practice by insurance agents of exercise of personal judgment as to whether requests for information on a policy application shall be strictly complied with, as well as to the natural reliance upon the company agent in that regard by applicants for insurance. Absent fraudulent or intentional suppression of required facts by the applicant, Goldstein v. Metropolitan Casualty Ins. Co., supra (14 N.J. Super. , at page 218), or collusion between agent and applicant, Annotation 81 A.L.R., supra , at page 835, it has long been recognized that the law must accord with the common practices in the business and the reasonable behavior of laymen dealing with agents selling or administering the placement of insurance for an insurer. See State Ins. Co. of Des Moines v. Taylor , 14 Colo. 499, 24 P. 333,
336 (Sup. Ct. 1890); McComb v. Council Bluffs Ins. Co. , 83 Iowa 247, 48 N.W. 1038, 1040 (Sup. Ct. 1891); Union Mutual Life Ins. Co. v. Wilkinson , 13 Wall. 222, ...