London, &C., Ins. Co. v. Lycoming Ins. Co.

• Decision Date: 03 March 1884
• Citation: 105 Pa. 424
• Parties: London and Lancashire Fire Insurance Company <I>versus</I> Lycoming Fire Insurance Company.
• Court: Pennsylvania Supreme Court

105 Pa. 424

London and Lancashire Fire Insurance Company versus Lycoming Fire Insurance Company.

Supreme Court of Pennsylvania.

February 21, 1884.

March 3, 1884.

February 21, 1884.

Before MERCUR, C. J., GORDON, PAXSON, TRUNKEY, STERRETT, GREEN and CLARK, JJ.

ERROR to the Court of Common Pleas of Lycoming county: Of July Term, 1883, No. 216.

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R. P. Allen and Henry C. McCormick, for the plaintiff in error.

H. W. Watson (John J. Metzgar with him), for the defendant in error.

Mr. Justice TRUNKEY delivered the opinion of the court, March 3, 1884.

The learned judge of the Common Pleas rightly ruled, "That there is no sufficient and competent evidence to vary, add to, or contradict the terms of either the contract of March 2, 1880, or the policy of re-insurance sued upon." That was consistent with the plaintiff's (defendant in error) fifth legal proposition, for while parol evidence is admissible to change the terms of a written contract, that adduced may be insufficient. Then the contract between the parties must be construed by the court, uninfluenced by the conflicting statements of the only two witnesses examined, respecting their conversation at and before the time of its execution.

By the first paragraph of the agreement the defendant agreed to re-insure the plaintiff against all losses on all policies issued or renewed by the plaintiff on the cash plan, upon risks in the State of New York only, and not elsewhere, the consideration being the pro rata gross premium for the unexpired term upon all such policies, less a rebate of thirty-two and one-half per centum on policies on risks outside of New York City and Brooklyn agencies, and less a rebate of twenty-five per centum on policies on risks at New York City and Brooklyn agencies. It is obvious that the words "policies" and "risks" are not used synonymously, that policies mean the instruments in which the contracts of insurance are embodied, and risks mean the hazards at the places where the property insured is located. The re-insurer agreed to pay the losses on policies, contracts, upon risks in the State of New York, and in fixing the amount of premium a certain rebate was to be made on policies on risks outside of New York and Brooklyn agencies, and a different rebate on policies on risks within the agencies of those cities. It would be difficult to define the location of the risks in more specific and unambiguous terms. Re-insurance is a contract of indemnity, and binds the re-insurer to pay to the re-insured the loss sustained in respect to the subject insured to the extent for which he is re-insured: May on Ins., § 11. That subject was expressed by the word "risks," and the surveys, diagrams and maps which were to be delivered by the re-insured to the re-insurer had special reference to the situation of the risks. The provisions of the sixth and seventh paragraphs refer to the policies and risks which are the subjects of the contract, as set forth in the first, and cannot be construed otherwise. These paragraphs contain no definition of limits; they are parts of the instrument, and refer to "the policies and risks hereby...