
    No. 19653
    Michigan Automobile Insurance Co. v. John Van Buskirk.
    Error to the Court of Appeals of Cuyahoga County.
    647. INSURANCE (Automobile) — Where there is an undisclosed chattel mortgage upon a car when policy thereon is issued containing a provision voiding it if property is mortgaged, in the absence of knowledge thereof by the agent, there was no waiver of the provision.
    2. The failure of the agent of the company to make oral inquiry as to the mortgage did not absolve the insured from the duty of making a disclosure thereof.
   JONES, J.

1. Waiver consists in the relinquishment of a known right. A party cannot be deemed to have waived a right based upon material facts the existence of which he did not know.

2. An insurance policy was issued insuring an automobile against loss or damage arising from collision. It contained a provision that the policy should be void if the automobile be “encumbered by any lien or mortgage without the assured having given immediate written notice of such encumbrance”. At the time of issuance there was an existing chattel mortgage on the automobile, which fact neither the company nor its agent knew.

Held: The mortgage lien was material to the risk and so made by the policy contract, and, in the absence of knowledge thereof on the part of the company or its agent, there was no waiver of the provision relating to said encumbrance.

3. Said policy contained the following statement, which was made part of the policy and warranted by the assured to he true: “The automobiles herein described-are not mortgaged or encumbered except as follows:” No exceptions to that statement were made by the assured. Since the policy was expressly voided by the failure of the assured to give notice to the company of the existence of said chattel mortgage and since the assured had warranted said statement to be true, the failure of the agent to make oral inquiry as to encumbrances of which he had no knowledge, did not absolve the assured from the duty of making disclosure thereof.

Judgment of the Court of Appeals reversed and that of common pleas affirmed.

Marshall, CJ., Day, Kinkade and Matthias, JJ., concur.  