Frederick County Mutual Fire Insurance v. Deford

Robinson, J., delivered the opinion of the Court. The plaintiffs, in their application, ffiated May 2nd, 1871. state: “We propose an insurance in your company on the following described property, * * * to wit: one thousand dollars on Bottle Run Tannery, in addition to the seven thousand dollars on same now in other offices,” * * * also “an insurance of $4000 on leather and hides tanned- and in process of tanning,-in addition to $-(dollars) on same in other companies.” On the 6th of May following, the defendant issued the policy on which this suit was brought, and in the printed body of the same was the following written clause: ‘c Other insurances permitted without notice, but all other provisions of by-laws retained.” It was proved at the trial, that on the 2nd May, 1871, a policy of $5000 on the stock of leather and hides tanned and in process of tanning, was issued by the Uüion Fire Insurance Company of Baltimore. The defendant’s fifth prayer assumes that the application by the terms of the policy became incorporated into and formed a part of the [413] same, and is to be construed as a warranty of the truth of the facts therein stated as of the day when the policy attached, and if the jury should find' that prior to the acceptance of the defendant’s policy the plaintiffs had insured the stock in the Union Company, they are not entitled to recover. Apart from the question as to whether the application is to be construed as a warranty, the prayer is based upon the general rule that the insured, by his warranty, contracts that whatever may be the state of the facts when the application is made, they shall be as warranted on the day when the policy is accepted. Mow, conceding for the purposes of this case, that the application is to be construed as a warranty, a question we are not to be understood as deciding; and further, that it attached to the policy as of the day when it was accepted by the plaintiffs, we are of opinion that it does not come within the principle of the rule thus relied on. The application, it will be admitted, was nota warranty when it was signed and delivered to the defendant, and if it became so afterwards it was by the terms of the policy which the plaintiffs accepted. When it was, however, accepted, there was a written clause in the body of the same, providing, that “ other insurances permitted without notice. ’ ’ Ordinarily the insurer requires notice of other insurances, both prior and subsequent — prior, in order that he may determine whether the insured has any such substantial interest in the property as will guarantee on his part vigilance and care in the preservation of the same, and subsequent,-in order to prevent an over-insurance after the policy is issued. This is a condition, however, which the insurer may waive, and whenever a clause is inserted in the body of the policy, in these words, “other insurances permitted without notice,” we take the rule to be, that the language thus used, is to be construed as applicable to prior as well as subsequent insurances. The [414] words are general and must be understood as having a general application, unless there is some other clause, showing the parties intended them to be understood in a restricted sense. If the intention be to include only prior or subsequent insurances, then these words ought to be used, in order that it may clearly appear to which of the two reference is made. When the policy of the defendant was accepted and the application of the plaintiffs became thereby a warranty, there was an express provision waiving all notice of either prior or subsequent insurances. What was the necessity, then, of notifying the defendant of an insurance subsequent to the application, but prior to the issuing of the policy? Whatever may have been the duty of the plaintiffs, apart from the terms of such a clause, it cannot be held that such notice was necessary in the face of a waiver so direct and explicit. Then, again, we cannot overlook the fact, that this clause was inserted in writing in the printed body of the policy, thus showing that whatever might have been the requirements of the bylaws in regard to notice of other insurances, it was the purpose of the defendant to waive such requirements, in so far as they affected the plaintiffs ; and as a protection against over-insurance to rely upon the by-law, which provided that the policy should be null and void, if the plaintiffs insured the property above three-fourths of its value. The defendant may have looked upon this provision as affording ample security against over-insurance, and it was therefore unnecessary.to require notice of the same. The seventh prayer was also properly refused, not only for the reasons above stated, but also because although the policy of the Union Eire Insurance Company was issued on the 2nd May, it does not follow that it was issued prior in point of time to the application signed by the plaintiffs'on the same day\ It may have been issued at [415] a subsequent hour, and the representation of a blank insurance strictly true. In regard lo the proof of loss, conceding it to be defective, we think the plaintiffs have waived the right to object to it on any such grounds. It was signed by Henry Boblitz, the general agent of the plaintiffs, and if it was not verified by his oath, such defect was apparent on the face of the paper, and it was the duty of the defendant to have notified the plaintiffs of such defect within a reasonable time, in order that they might correct the same. No objection, however, was made to the proof of loss, on this ground, but the record shows that the denial of liability under the policy was placed upon other distinct and independent grounds. The plaintiffs in their application stated, that they proposed an insurance of one thousand dollars in addition to the seven thousand dollars already on the building in other Companies. It appears there was an insurance at that time of §4000 on the building in the name of Deford & Appold, trustees of Jones, who liad a lien upon the same for unpaid purchase money, and that the plaintiffs had signed an application to the Planters’ Mutual Insurance Company of Washington County, for an insurance of §3000 and had delivered the application to the agent of the Company who was also the agent of the defendant,— the insurance of the trustees and the proposed insurance thus making seven thousand dollars. The nature and character of the insurance of the trustees was known by the agent, or at least there was evidence offered to show that he was duly informed in regard thereto, and the application to the Washington County Insurance Company was of course known to him, having been made through him, and it also appears that the application was written by him and signed by the plaintiffs. The defendant’s fourth prayer, asked the Court to instruct the jury, if they should find that there was at the time said appli [416] cation was sent, less than seven thousand dollars of other insurances on the building or the interest of the plaintiffs, they were not entitled to recover, and that the insurance of Deford & Appold, trustees, offered in evidence is not such an insurance as could he considered. In other words, that the statement of seven thousand dollars insurances is to be considered as a warranty that there was insurances on the plaintiffs’ interest to that amount, and not as a statement of the amount of insurances generally on the property — and further that in ascertaining what the plaintiffs meant, evidence in regard to the insurance of the ■trustees of Jones, was not to be considered. We are of opinion that evidence in regard to the insurance by the trustees, was admissible, and that in determining the question as to whether the plaintiffs meant to represent the insurances of seven thousand dollars as on their interest, or as a statement of the insurances generally on the property, in order that the defendant might judge whether the value of the same was fully covered by policies already issued, this evidence was to be considered by the jury. The grounds on which this evidence was admissible are stated at length under the defendant’s sixth prayer in The Planters’ Mutual Insurance Company of Washington County vs. Deford & Co., ante, 387, and it is unnecessary to repeat them here. (Decided 2nd July, 1873.) For these reasons we think the defendant’s fourth, fifth, sixth, seventh and eighth prayers were properly refused, and the judgment below will be affirmed. Judgment affirmed.