Cutler v. Royal Insurance

Hamersley, J. If, as appears from the finding, the insured, at the time of their application to the defendant, believed that their prior application to the JEtna Insurance Company for a policy of insurance for $1,000 upon property they were asking the defendant to insure, could not result in a contract of insurance, they were not bound by the terms of their policy to then inform the defendant of that application. But in subsequently accepting the JEtna policy issued in pursuance of their application, they violated the provision against further insurance contained in the policy issued by the defendant; and for this reason the plaintiffs cannot recover. “ Precisely that had occurred which both parties had stipulated should make void the contract of insurance.” Bishop v. Clay Ins. Co., 45 Conn. 430, 453. [572] The “ standard guaranty to maintain 80 per cent, insurance,” stamped on the face of the policy, did not supersede the provision against further insurance. The two provisions can stand together, and effect can he given to both. This “ guaranty ” clause in a fire insurance policy is of recent use and is a very peculiar one. We consider it only so far as necessary to the decision of this case. If, as the plaintiffs claim, the adoption of the clause imposes on the insured an obligation to procure such additional insurance as may be necessary to keep the total amount of insurance equal to 80 per cent of the changing actual value of the property covered by the policy, and therefore impliedly gives permission to procure, or waives the provision against, such insurance, it must follow that such permission or waiver is limited by the necessity from which it is implied. It may be that if, in fulfilling the obligation assumed, the 80 per cent limit is unintentionally exceeded, the policy would not for that reason become void; but a question of this kind does not arise in the present case. The insured obtained insurance for $1,500 on a stock of goods and fixtures valued at $1,700 ; the insurance being more than 80 per cent of the value of the property insured. Immediately afterward they procured additional insurance on the principal item of this property, for $1,000. Within twelve days the property is destroyed by'fire, and its actual value at that time is less than $1,000. There is here no room for any claim that the additional insurance was intended merely to fulfill the obligation of the guaranty clause. The insured in fact and intent violated the provision against over-insurance. They certainly stand in no better position than if, having obtained permission for an additional insurance of $100, they then procured insurance for ten times that amount. The Superior Court is advised to render judgment for the defendant. In this opinion the other judges concurred.