National Fire Insurance v. Crane

Tuck, J., delivered the opinion of this court. The policy, in this case, insured James L. Gray &■ Bro. against damage by fire to property in the city of Baltimore, “the loss, if any, payable to Wm. Crane & Co.” The present appellee — (he complainant below — claims relief as assignee of his partner’s interest in the policy, on the ground that it should have been issued in the name of Wm. Crane & Co., as the assured, and also that the renewal should have been made in their name, or that of Wm. Crane & Son; the allegation being, that the company committed a mistake in these respects, which errors the complainant insists it is competent for a court of equity to correct, and to grant relief accordingly. An examination of the record has satisfied this court that the complainant is not entitled to relief on the supposition that such mistakes were committed. We think that the policy was issued and accepted, and that it was renewed, as the [293] parties concerned designed it should be; Wm. Crane & Co., being regarded by the Grays, as well as the company, as the persons beneficially interested in the property, and entitled to compensation in case of loss. Without reviewing the evidence, we may say that the learned judge below has demonstrated this very clearly in his opinion. The question then arises, whether Wm. Crane & Co. were under any obligation to have obtained 'for. the Grays a transfer of the policy, assented to by the company, as in ordinary cases. ■ On this point we are of opinion with the court below, that they were entitled to the benefit of the insurance without such transfer. Courts of justice must regard all the parts of a transaction, and impute to parties a motive for doing or saying what the case discloses. Every fact and declaration must be considered as the result of design, or agreement, and the intent of the parties should have effect, if it can be done consistently with established rules. Eaton vs. Jaques, 2 Doug., 460; Calvert vs. Bradley, 16 Howard, 593. Tested by this principle, what are we to suppose the company meant by issuing this policy, with the endorsement, that the loss, if any, should be paid to Wm. Crane 6c Co.? It was an admission by it, that they had an interest in the contract, and were to receive the benefit of it. As observed by the judge below, the policy may be regarded as having been at its inception assigned to them with the assent of the company,” which doctrine was announced in the case of Brown vs. The Roger Williams Ins. Co., 5 Rhode Island, (2 Ames,) 394. An insurance was effected on property that was then mortgaged to the plaintiff in the suit — the policy having been issued to the mortgagors, “the loss, if any, payable to the plaintiff.” To an action by the mortgagee the company •pleaded that it, and the mortgagors, had referred to arbitrators the matter of the loss in question, that an award had been made, and this was relied on in bar of the suit. On demurrer to this plea, it was held that the clause making the loss payable to the plaintiff, was, “in legal effect, an assignment of the policy, concurred in by the company, to the plaintiff as mortgagee, by virtue of which he alone was en> [294] titled to receive the amount of the loss, as additional collateral security for his debt,” and that “his interest in the policy required his assent to the adjustment of the loss, in order to make it binding upon him.” Concurring with the court below, as to this part of the case also, we think the complainant may maintain his suit, unless it can be defeated by the defences relied on by the company. We have no doubt of the competency of James L. Gray, and of A. F. Crane, to testify for the complainant. All their interest in the subject-matter was parted with. It makes no difference that Gray was examined a second time, after his release. “A release to qualify a witness must be given before the testimony is closed, or it comes too late. But if the trial is not over the court will permit the witness to be re-examined, after he is released, and it will generally be sufficient to ask him if his testimony, already given, is true, the circumstances under which it has been given, going only to the credibility.” 1 Greenlf. Ev., 426. Wake vs. Lock, 5 C. & P., 454, (24 Eng. C. L. Rep., 402.) 7 Wend., 180, Tallman vs. Dutcher. Nor does the fact that A. F. Crane transferred his interest for the purpose of becoming a witness disqualify him, however it may affect his credit. It is no uncommon thing, at law as well as in equity, for persons to execute or receive releases with such motive. Even where the interest is disclosed during the trial, the examination will be suspended in order that the disqualification may be removed. The case of Crawford vs. Brooke, 4 Gill, 213, has no application. There the question arose under an Act of Assembly, and related, not to the witness’ competency, but to the bona jides of the plaintiff’s assignment, without which he had no right to sue in his own name. Pegg vs. Warford, 7 Md. Rep., 582. Reynolds vs. Manning, 15 Md. Rep., 510. We also think that Seidenstnclcer and Magruder were competent. The record does not disclose such an interest in either of them, as, under the authorities cited by the appellee, created a disqualification as witnesses for the defendant. The last points necessary to be noticed are, whether the [295] prior insurance was notified to the defendant, and if so, whether its not having been endorsed on the policy, affects the present suit? We conclude, from all the proof on this question of fact, that the president of the company was notified of the previous insurance. It is positively stated by the complainant’s witnesses, and Mr. Seidenstricker admits a conversation about an existing insurance. It is more reasonable to suppose that his memory is at fault, on account of the number of applications made to him, than that the other witnesses, having had a particular agency in this case, should fail to recollect so important a circumstance. The omission, probably, was caused by the failure of the president, at the time, to direct his clerk to make the endorsement, or by the neglect of the clerk, by whom it appears the policy was prepared and delivered to the assured. Whatever effect the want of such an endorsement may have at law, in an action on the policy, we think it cannot be urged in a court of equity, in a cause otherwise free from objection. The judge below has correctly stated the law on the subject. The endorsement could have been made only by the company. If it be omitted, who is to blame? Certainly not the assured. These policies contain many stipulations — some of them operating as conditions precedent — for the benefit of the company, and few for that of the assured. It is too common for application to be met, and adjustment refused, on frivolous and unjust pretences, in order to defeat fair claims, on contracts of which good faith is the very essence, and we think it would promote the interest of insurance companies, and tend to a higher state of morals in business transactions, if they would exhibit more readiness to settle demands upon them, than, as we discover from the numerous reported cases on the subject, appears to be usual with them. In this case the president of the company dictated the application himself; the prior insurance was made known to him; the parties relied upon him; they never went to the office of the company, he came to the counting-house of the complainant, seeking the risk, and after hearing all they had to say on the subject, he- de [296] parted, and soon after sent the policy, and received the premium, his clerk saying that it was all right; the only defect, however, being that the company had omitted part of its own duty in not endorsing the former insurance. In such a. case we are called upon to say that the party is without remedy; on the contrary, we think it would be a reproach to the jurisprudence of the State, if this company were discharged from their contract on any such ground. There is a distinction in cases where the preparation of an instrument belongs to the party to become liable under it; he ought to be dealt with more strictly. 19 Ves., 257. Insurance contracts are within this principle, and equity will interpose not only in cases of fraud, but also of mistake, where a policy is drawn up in a form different from the application, or any thing is omitted which it is the duty of the company to insert, or endorse on the instrument. Collett vs. Morrison, 12 Eng. Law & Eq. Rep., 171. (Decided June 28th, 1860.) Finding no objection to the decree below, it will be affirmed with costs. Judgment affirmed.