Bradley v. Potomac Fire Insurance

Alvey, J., delivered the opinion of the Court. Whether the liability of the appellee under the policy sued on ever attached, is the single question in this case, and that [113] depends upon the true construction of the policy and its conditions. The policy is dated the 11th of November, 1867, and by it, it is declared that the appellee, “ in consideration of one hundred and sixty dollars, to be actually paid to this company within fifteen days from this date, by the insured hereinafter named, do insure Wm. L. Bradley, against loss or damage by fire, to the amount of four thousand dollars on his property,” situate at Itoxbury, Mass.; and in the clause that follows the description of the property, it is set forth that the company thereby “promises and agrees to make good unto the said insured, his, Ac., all such immediate loss or damage, not exceeding, &c., as shall happen by fire to the property as above specified, during one year, to wit: from the eleventh day of November, one thousand eight hundred and sixty-seven, (at 12 o’clock at noon,) until the eleventh day of November, one thousand eight hundred and sixty-eight, (at 12 o’clock at noon,) the said loss or damage to be estimated,” &c. By the fourth condition of insurance it is provided that the company shall not be held liable under the policy, or under any renewal thereof, until the premium in full therefor is actually paid; and by the fifth condition it was mutually agreed that if the premium on the policy was not paid within fifteen days as therein provided, the policy should be null and void; and it was further agreed that the policy was made and accepted in reference to the terms and conditions therein set forth. At the trial below it was admitted that the policy sued on had been executed by the appellee and delivered to the appellant, on the day of its date, and that the proper preliminary proof had been furnished the company of the loss, and that $160, the premium mentioned in the policy had been tendered to the appellee by the appellant after the fire, and within fifteen days after the execution of the policy. The Court below ruled against the right of the appellant to recover on the policy, and to that ruling he excepted. [114] On the part of the appellant it is contended that the liability of the appellee attached from the date of the policy, and that the fifteen days given within which to pay the premium, was simply a. credit extended to him, not at all intended to aifect the risk, provided the premium was paid or tendered within that time; while on the part of the appellee it is contended that the actual payment of the premium, within the fifteen days, was a condition precedent to the attaching of the risk, and that, as the property was destroyed before the tender of payment within the time limited, there was nothing upon which the risk could • attach, and therefore there is no liability for the loss; and this latter construction was the one adopted by the Court below. The. question would seem to be a plain one; and the only thing that affords the slightest ground for the construction contended for by the appellant, is the stipulation on the part of the company to insure the property against loss by fire, for the period of one year, reckoning that period from the date of the policy. But though such be the stipulation, it was certainly competent to the parties to agree that it should be subject to the conditions that followed; and one of those conditions was that the company should not be held liable under the policy until the premium in full was actually paid. Until that was done, the policy, though issued and delivered to the appellant, was, in respect to the obligation under it, merely inchoate, depending for its binding effect upon a condition to be performed by the appellant. By the performance of that condition at any time within the fifteen days, and before loss occurred, the risk engaged to be assumed by the appellee would, eo instanti, have attached; but until such condition performed, the appellant held the policy at his own peril; and, upon loss occuring, no tender afterwards made, though within the time allowed for payment, can, upon any fair construction, be taken as a compliance with the condition. Eor it never could have been the intention of the appellee to assume the risk before the [115] payment of the premium, and to give the appellant the option to pay or not within the fifteen days as events might determine him to elect. If he had paid within the fifteen days, and before loss occurred, the appellee would have been bound to receive the premium and assume the risk; but, on failure to pay within the time, it was agreed by the fifth condition, that the policy should thenceforth be null and void, and, of course, being null and void, would be no longer binding on the appellee even as a proposal to insure. The policy being thus, by mutual agreement, declared null and void, in the event of non-payment within the time limited, it is clear, there could be no legal responsibility on the part of the appellant for the amount of the premium; and that being so, there is no reason or justice in bolding the appellee alone bound on the contract for the fifteen days, while the appellant was free to elect to be bound or not, as circumstances might dictate. In so construing the policy as to bind the appellee from its date, without reference to the payment of the premium before loss, there would be no mutuality in the contract; and it is'manifest that it was for the very purpose of preserving mutuality, and protecting the appellee from risk without consideration actually received, that the fourth and fifth conditions were inserted in the policy. Without such purpose in view they would be useless and unmeaning. The cases cited and mainly relied on by the appellant have no application to ibis case. They were instances in which the insurers were held to have waived the right to receive the premium as a condition upon which the risk was to attach, upon the ground that the assured would have been otherwise misled and deceived. But such is not this case. Here the question is simply one of construction, depending on the terms of the contract between the parties; there being no pretense on the part of the appellant that he was deceived or misled by the conduct of the appellee. The only circumstance alluded to in argument, as at all justifying the notion of waiver, was the delivery of the policy to the appellant; but it [116] must be recollected that, by express stipulation, the policy was made and accepted in reference to the terms and conditions contained in it. (Decided 15th February, 1870.) Agreeing as we do with the Court below in its construction of the policy, its judgment will be affirmed. Judgment affirmed.