Jersey City Insurance v. Nichol

The opinion of the court was delivered by Scudder, J. The defence made by the defendants in their answer and proofs is, that the policy obtained by the defendant, Catharine Nichol, in the Millville Insurance Company, after the execution [299] and delivery of the complainant's policy, was void, because of a condition appearing on its face, broken at the time it was made, and which has not been waived by any subsequent act of the Mill-ville company. Both policies contain the condition that “ if the assured shall have, or shall hereafter make any other insurance on the property hereby insured, or any part thereof, without the consent of the company written hereon, then this policy shall be void.” The Millville policy has no consent to any other policy written thereon, nor is there any proof that they had knowledge of the complainant's policy until after the fire. By the express terms of this second policy it was, therefore, at the time it was executed, void, because at that time there was a policy issued by the complainants to which no consent was given. The condition for consent was a condition precedent to the vitality of the policy, which was broken as soon as it was accepted by the insured, and the policy never could be enforced at any time if loss by fire had been sustained, nor could any action be maintained on it. It was different with the complainant’s policy, which was valid in its inception, and was only liable to be avoided by some breach of its conditions happening after it was issued and took effect. The principal breach which is claimed, is of the stipulation that if assured shall hereafter make any other insurance on the property thereby insured, without the consent of the company written thereon, this policy shall be void. The exact term used is important, “ make other insurance ; ” not if she shall obtain,-or attempt to obtain any other policy of insurance, whether valid or not valid. The difference between a policy and a valid, effectual insurance is here indicated ; it is the difference between the instrument and the object sought by it. The rule of interpretation applied to policies of insurance does not admit of any latitude in a construction which will work a forfeiture, and will never be extended beyond the .exact words of the policy to reach that result. This rule has been defined in the recent cases of Carson v. Jersey City Ins. Co., 14 Vr. 300, and State Ins. Co. v. Maackens, 9 Vr. 564. While, therefore, we are constrained to say that the word “ void,” in the second [300] policy does not mean voidable, or something else than void, although such interpretation works a forfeiture and avoids that instrument, we are also justified in holding that the word “ insurance,” used in the first policy, is not equivalent to the word “policy,” and that the subsequent policy obtained, being no insurance, creates no forfeiture. There can be no other reasonable conclusion; for a contract of insurance is a contract of indemnity, and if there be no indemnity by its terms, and the contract is void, then there is no insurance, though there may be a policy of insurance in form. The call for an insurance, in fact, is not met by the formal execution of a contract for insurance which is defeated as soon as it is made, by one or more of the provisions or conditions contained in it. This result does not stand on the construction now given, as a first suggestion, for there is express authority in our state which has been approved and followed in our courts for many years. Since the case of Schenck v. Mercer Co. Ins. Co., 4 Zab. 447, decided in 1854, it has been the settled law with us that where there is a condition like the present one in the first policy, it must be made to appear that the second policy is a valid, subsisting contract, and the showing of a policy void when it was issued is not sufficient to defeat the prior insurance. The case cited is directly in point, and will not be overruled when it so clearly appears to be in accordance with the exact rule of construction applicable to such contracts, and when it is also sustained by the weight of authority in other courts. This support will be found in the following cases, and others that might be cited: Jackson v. Massachusetts Mutual Fire Ins. Co., 23 Pick. 418; Clark v. New England Ins. Co., 6 Cush. 342; Hardy v. Union Ins. Co., 4 Allen 217; Thomas v. Builders Ins. Co., 119 Mass. 121; Stacey v. Franklin Ins. Co., 2 Watts & Serg. 506; Gale v. Belknap Ins. Co., 41 N. H. 170; Philbrook v. New England Ins. Co., 37 Me. 137 ; Rising Sun Ins. Co. v. Slaughter, 20 Ind. 520; Mitchell v. Lycoming Ins. Co., 51 Pa. St. 402; Hubbard v. Hartford Ins. Co., 33 Iowa 325; Knight v. Eureka Ins. Co., 26 Ohio St. 664. It seems, also, that the examination of this subject by approved text-writers has led them to the same conclusion. May [301] on Ins. 437; Flanders on Fire Ins. 49, 50; 2 Pars. on Maritime Law 100 ; Wood on Fire Ins. § 348. The cases most frequently cited in opposition to this doctrine are Carpenter v. Providence Washington Ins. Co., 16 Pet. 495; Bigler v. New York Central Ins. Co., 22 N. Y. 402. In the latter case the second policy was treated, by both parties to it as a valid, subsisting insurance, and a draft was given by the company, and accepted by the insured, to pay the amount of the loss; and in the former, the decision appears to have been put upon the ground that the policy could only be defeated by proof of the extrinsic facts of misrepresentation in obtaining the insurance, which did nót render it utterly void ab initio, but merely voidable. In that case the court also declined to discuss the cases cited in conflict with the conclusion, and said' they were distinguishable from it, and could not be permitted to govern it. These cases and others have been considered in those to which reference has been above made, and it will not be necessary to examine them further, for, notwithstanding the great respect to which they are entitled, their reasoning and authority are not sufficient to overcome the weight of opinion against them which has been approved in our own courts. The latest case to which my attention has been directed is Landders v. Watertown Ins. Co., in the court of appeals of New York, reported in 24 Alb. Law Jour. 535 (1881), which appears, from the brief citation there given, to follow the earlier case of Bigler v. New York Central Ins. Co.; but whether distinguishable or not from this ease under consideration, it can hardly be allowed to change the opinion already expressed. As there was no actual, valid insurance in the Millville Insurance Company at the time Mrs. Hichol made the proof of her loss to the complainants, there was no fraud which materially affected them in her statement that she had no other insurance on the property; nor in her allegation that the actual value of the house insured, at the time of the fire, was $2,00,0, as that was an expression of opinion only, and not a misstatement of a fact material to the insurer. Another witness testified that her loss was $1,20(3, and the complainants compromised the loss with [302] her by the payment of $900; but neither is sufficient evidence, without proof of actual fraud, that her valuation was too great, and. intended to defraud the company by false swearing. After the payment of the loss by complainants, on May 7th, 1879, the defendant, .Catharine Nichol, on June 7th, 1879; made her claim and proof of loss against the Millville. Insurance Company, on the second policy, above referred to; but this company has not adjusted or paid the loss, or admitted in any way that the policy issued by them is valid. This in no wise affects the complainants, for upon any construction of these policies, the second policy was invalid and inoperative until it should be ratified and revived by some assent to its continuance or waiver of the forfeiture, with knowledge of the fact of a former insurance. Section 6 of the complainant’s policy states that, in case of any other insurance upon the property thereby insured, whether made prior or subsequent to the date. of the policy, the assured shall be entitled to recover of the company no greater proportion of the loss sustained than the sum thereby insured bears to the whole amount insured thereon, without reference to the solvency or liability of the other insurers. It is claimed that, under this section, there should be an apportionment of the loss on these two policies which have been issued; but this apportionment can only be made where there are other insurers, and as we have above held that the second policy was, in legal effect, no insurance, this section is not applicable to the case here presented. The decree is affirmed, with costs allowed to the respondents in this court. Decree unanimously affirmed.-