Bradley v. Potomac Fire Ins. Co. of Baltimore

• Decision Date: 15 February 1870
• Citation: 32 Md. 108
• Parties: WILLIAM L. BRADLEY v. THE POTOMAC FIRE INSURANCE COMPANY OF BALTIMORE.
• Court: Maryland Court of Appeals

32 Md. 108

WILLIAM L. BRADLEY v. THE POTOMAC FIRE INSURANCE COMPANY OF BALTIMORE.

Court of Appeals of Maryland

February 15, 1870

APPEAL from the Circuit Court for Howard County.

This case, instituted in the Superior Court of Baltimore city, by the appellant against the appellee, upon a policy of insurance issued by the latter to the former, was, upon the application of the appellee, removed to Howard county. The facts of the case are sufficiently set forth in the opinion of the Court.

The cause was argued before BARTOL, C.J., STEWART, BRENT, GRASON and ALVEY, J.

John H. Thomas and William M. Merrick, for the appellant.

By the express language of the policy a credit of fifteen days was given to the insured for the payment of the premium. His obligation to pay the money was as clear, his insurance as complete, as if he had given and the company had accepted his promissory note for the premium, payable within that time. The consideration was not for money recited to have been paid, and proven not to have been, but for money " to be actually paid to the company." He could not escape from the obligation to pay it, nor the company from its contract of insurance, made in consideration of this liability on his part. The propriety of this construction is strengthened by the period of time during which the policy was to cover the property insured--one year from its date--from the 11th of November, 1867, to the 11th of November, 1868. The policy was not incomplete; not held for future delivery; not left with any one else as an escrow, to be delivered on a future contingency, but consummated by actual delivery of the company itself. It named, in precise language, when it should begin, and when it should cease to cover the property, in consideration of a sum to be thereafter paid, within a period equally precise. The construction contended for by the appellee would make the company insure, not for a year, as it agreed to do, but for a shorter time; not from the 11th of November, 1867, as its policy promised, but from some later period, if at all.

All of the provisions, however, requiring actual payment of the premium "to the company," are to be construed in connection with the fifteenth clause of the policy, and with reference to the well known course of insurance business. Insurance, in companies whose office is in a city different from that of the applicant, is generally procured through the agency of a broker. To prevent the applicant from contending that payment to him is payment to the company, the fifteenth clause provides that such broker shall be deemed the agent of the assured, and the other clauses referred to, require "actual payment to the company" before the policy shall take effect. Companies are often obliged, from the necessities of their business, to entrust their own agents in remote cities with blank policies already executed, requiring only the insertion of the name of the assured, the description of the property, and the delivery of the policy to make the insurance complete. This company desired to take from its agents, not from itself, the right to give credit and sought to require in such cases payment of the premium "to the company," before the policy should take effect. It did not intend to preclude itself from granting a credit, only long enough for the remittance of the money, to one with whose credit the company might itself be satisfied. Mayor of New York vs. Hamilton Fire Ins. Co., 10 Bosworth, N. Y., 537; Ames vs. New York Union Ins., 14 N. Y., 253; Hoffman vs. Ætna Ins Co., 32 N. Y., 405; Merrick vs. Germania Ins. Co., 54 Penn., 277; Merchants' Ins. Co. vs. Edwards, 17 Grattan, 138; Boehen vs. Williamsburg Co., 35 N. Y., 131; Yeaton vs. Fry, 5 Cranch, 335, 341.

The contract of a duly authorized agent, in writing or by parol to give the assured credit or time for the payment of the premium, is a waiver of the most express provision in a policy that it shall not take effect until the premium is actually paid. If an authorized agent of the appellee had, by parol, agreed with the appellant that he might have fifteen days for the payment of the premium, and had delivered the policy under that agreement, it would have been a waiver of the proviso in the fourth clause of the policy, and the policy would have attached, notwithstanding. The agreement of the company to give the credit, to be found in the policy itself, is as explicit as that of any agent whose conduct has been held to amount to such a waiver. Baptist Church vs Brooklyn Fire Ins. Co., 28 N. Y., 153; Tayloe vs. Merchants' Fire Ins. Co., 9 Howard, U. S., 390; New York Central Ins. Co. vs. National Protection Ins. Co., 20 Barb., 189, 468; Baptist Church vs. Brooklyn Fire Ins., 18 Barb., 69, and 19 N. Y., 305; Goit vs. National Protection Ins. Co., 25 Barb., 189; Hallack vs. Commercial Ins. Co., 2 Dutch., 268; Bouton vs. American Mutual Life Ins. Co., 25 Conn., 542; Sheldon vs. Connecticut Mutual Life Ins Co., 25 Conn., 207; Bragdon vs. Appleton Mutual Ins. Co., 42 Maine, 259; Boehen vs. Williamsburg City Ins. Co., 35 N. Y., 131; Post vs. Ætna Ins. Co., 43 Barb., 351; Heaton vs. Manhattan Fire Ins. Co., 7 R. I., 502; Commercial Mutual Ins. Co. vs. Union Mutual Ins. Co., 19 Howard, 318; Trustees of the Baptist Church vs. Brooklyn Fire Ins. Co., 19 New York, 306-311; Sheldon vs. Atlantic Fire and Marine Insurance Company, 26 New York, 461-465, 466.

Delivery of the policy by the company, even without express language waiving the payment of the premium, would, of itself, be presumptive evidence of the intent to waive it. When that presumption is aided, as in this case, by language in the policy giving effect to it from its date, naming as a consideration therefor a short and precise period within which the premium shall be paid, the conclusion that every apparently inconsistent proviso was intended to be waived or nullified seems irresistible. Boehen vs. Williamsburg City Ins. Co., 35 New York, 131; Wood vs. Poughkeepsie Ins. Co., 32 New York, 619, 620.

William Shepard Bryan, for the appellee.

A contract was made between the parties by the delivery of the policy. But one of the express stipulations of the contract was, that until the premium was paid, the defendant was not liable.

Before the premium was tendered, the property had been destroyed, and was not, therefore, the subject of insurance.

It cannot be supposed that the fourth condition was waived. To hold that it was waived by delivering the policy, would be equivalent to maintaining that it was not competent to insert the condition in a policy in such manner as to make it a part of the contract. There was no acknowledgment of payment of premium, and nothing was done from which the plaintiff could suppose that it was not intended to insist upon payment according to the terms of the contract.

The true meaning of the contract is, that the defendant's liability was entirely conditional, and the payment of the premium was a necessary condition precedent to the accruing of that liability. Mulrey vs. Shawmut Ins. Co., 4 Allen, 116; Strong vs. Taylor, 2 Hill, 326; Henning vs. Hoppock, 15 N. Y., 409; Tarleton vs. Staniforth, 5 Term Rep., 695, affirmed in 2 Bos. & Puller; De Wolff vs. Babbitt, 4 Mason, 294; Deshon vs. Bigelow, 8 Gray, 159; Haggerty vs. Palmer, 6 Johns. Ch. Rep. 437.

It was in the power of the plaintiff to fix this...