Shertzer v. Mutual Fire Insurance

Miller, J., delivered the opinion of the Court. A practice which cannot he too highly commended, of waving hy agreement, all errors in pleading, has heen gradually growing in favor with the profession in this State, and has prevailed especially in suits upon policies of insurance. In this case, however, it is purely a question of pleading that we have to decide. • The action is in covenant, the policy being under seal. The defendant, after craving oyer, pleaded four pleas, to the first of which the plaintiff replied and issue was joined upon each of the others. The defendant demurred to the replication, and the demurrer being sustained, the plaintiff, without trial of the issues, suffered judgment in favor of the defendant to he entered on the demurrer, and from that judgment has appealed. As the demurrer goes hack to the declaration, we need not, in the view we have taken of the case, consider whether the replication is had. By the policy, dated the 28th of February, 1870, which, with its conditions and endorsements, was produced on oyer, the company insured the plaintiff, among other sums, to the amount of $1000 “ on the contents of” a frame barn, granary, and stabling (which were also insured), situated on his land, called “ Widow’s Care,” in Harford County, and the suit is for loss hy the destruction of this property hy fire, which occurred in 1874. The declaration admits that the property, when destroyed, was not in the buildings in which it was at the time the insurance was effected, hut had heen removed to another part of the same tract of land which the plaintiff had subsequently purchased, and avers that on the 29th of July, 1870, the plaintiff applied to the defendant “for permission to remove the personal property described in said policy to [509] that part of Widow’s Care,” which he had so purchased and which was then in his occupancy, “ and the defendant then and there granted that privilege and right to the plaintiff and endorsed said permission upon said policy of insurance, and in pursuance of said permission ” the removal was made. The endorsement thus made on the policy is signed by the secretary of the company, but is not under seal, and is in these terms : “ Permission is hereby granted to assured to remove the personal property insured within to the property now occupied by him and insured to Jacob Shertzer by policy Ko. 832.” One of the conditions annexed to and made part of the policy, provides that “ insurance on contents of buildings shall be taken and construed to include every species of personal property therein,” and from this, in connection with the terms of insurance in the body of the policy itself, it is clear the risk which this policy covered as respects the property in question, continued only so long as it remained in the buildings in which it was at the time the policy was issued. Annapolis and Elk Ridge Railroad Co. vs. Baltimore Fire Ins. Co., 32 Md., 37 ; Maryland Fire Ins. Co. vs. Gusdorf, 43 Md., 506. It follows, therefore, that the plaintiff had no cause of action against the company for this loss except by virtue of the permission thus endorsed on the policy. The declaration, in fact, sets up this endorsement and relies upon it as the means by which the insurance, which would otherwise have been ineffectual, was extended to and continued in force as to this property, after its removal, and as this permission was not granted under the seal of the company, the inquiry arises, was covenant the proper form of action ? This question is in effect settled by the decision in Deale’s Case, 18 Md., 51. There the policy was under seal, and there was an endorsement upon it not under seal, but simply signed by the secretary of the company, stating that an application for additional insurance had been [510] granted, subject to the terms and conditions set forth it the within policy. The action was in assumpsit on the contract for additional insurance, and the ohjection there made was that it should have been in covenant, but the Court held that assumpsit and not covenant was the proper form, saying that “here there is nothing in the original covenant which continues it in force as a specialty binding tbe company by subsequent endorsements of additional insurance: they are new distinct contracts by parol.” The Court then draw the distinction between the case before them and that of McGowan, in 16 Md., 47, where the policy itself provided for its continuance after the year, so long as the premiums were paid by the assured and accepted by the company, and where it was, therefore, held that the renewal receipt did not evidence a new contract, but an extension of the original sealed contract by virtue of its own terms, and they then cite with approval and adopt Luciani’s Case, in 2 Whart., 167, where it was decided .by- C. J. Gibson, that covenant could not be maintained upon an unsealed endorsement on a policy, to the effect that the insurance had been enlarged as to the amount and also as to the premium, because such an endorsement, not being provided for in the instrument itself, did not continue the policy as a specialty. So, in the case now before us, there is no provision in the policy or in any of its conditions which authorizes an endorsement like that referred to in the declaration to be made so as to continue the policy as a specialty, notwithstanding its conditions were about to be broken by the removal of the property from the original buildings. This endorsement, in our opinion,, is clearly a new and distinct contract by parol, providing that the insurance shall be effective under circumstances which would’ otherwise have made the policy void. In other words, it is a parol agreement that the insurance shall continue after the removal upon the terms and conditions set forth in the policy, and forming, as it does, the [511] ground of this action, and relied on in the declaration for that purpose, covenant will not lie. Nothing to the contrary of this was decided in Gusdorf’s Case, 43 Md., 506. No question of pleading arose in that case. The action was in assumpsit, and all errors in pleading were waived by agreement, and the Court held that the company was estopped by the acts and declarations of its president from setting up as a defence to the action the fact of the removal of the goods to another building, and that permission to do so had not been endorsed in writing upon the policy according-to its terms and conditions. Here the company are not attempting to deny the validity of the endorsement on which the plaintiff relies, nor its binding force upon them, hut they simply say they cannot he sued on it in covenant, and in this, as we have shown, they are right. Taking this view of the case, it is unnecessary for us to consider other objections to the declaration presented by the argument of the appellee’s counsel. This objection being fatal to the declaration, it follows that the demurrer to the replication to the defendant’s first plea was well sustained, and the judgment must he affirmed. (Decided 13th June, 1877.) Judgment affirmed.