Corporation of London Assur. v. Paterson
| Decision Date | 04 March 1899 |
| Citation | 32 S.E. 650,106 Ga. 538 |
| Parties | CORPORATION OF LONDON ASSURANCE v. PATERSON et al. |
| Court | Georgia Supreme Court |
Syllabus by the Court.
1. Apparently, the auditor to whom this case was referred for the purpose of determining how a loss by fire should be adjusted, as between the insured and each of several insurers, correctly found that an application for insurance presented by the insured to one of the insurers was not specific as to the precise property sought to be insured. But, whether this be true or not, it affirmatively appears that no substantial right of the party complaining of this ruling was prejudiced thereby.
2. When a memorandum of a contract for additional insurance is indorsed upon a policy previously issued, the stipulations therein contained, in so far as the same may be applicable are to be treated as constituting the basis of the new contract. (a) In the present case the indorsement contemplated additional insurance which should cover the entire interest of the insured in the property specified,--not merely a three-fifths interest therein, which was the extent of the risk originally assumed. (b) Even if error was committed in admitting parol evidence offered to show the intention or the contracting parties, no injury thereby resulted to the insurer.
3. One of the insurance companies being, in any event, liable to pay in full the amount expressed in its contract, the mere fact that the auditor estimated the value of the property destroyed upon an erroneous basis affords to this company no just cause of complaint.
4. Under the express provisions of what is commonly known as the "American Clause," though it be contained in an "open" policy, not immediately attaching to any specific risk, the date to be looked to in determining whether concurrent insurance is prior or subsequent "in day of date to this policy" is, not that upon which the policy attached to a specific risk, but that upon which the policy was issued.
5. An insurer in no way interested in an adjustment made between the insured and a subsequent insurer is not in a position to question the correctness thereof.
Error from superior court, Glynn county; J. L. Sweat, Judge.
Action by Paterson, Downing & Co. against the Corporation of the London Assurance and others. Exceptions of said corporation to the report of an auditor were overruled, and it brings error. Affirmed.
Brantley & Bennet and W. W. MacFarland, for plaintiff in error.
Goodyear & Kay, King & Spalding, Mercer & Mercer, and Atkinson & Dunwoody, for defendants in error.
Before undertaking to deal with the several assignments of error presented by the bill of exceptions in this case, it is proper to set forth a statement of some of the leading facts disclosed by the record, which will serve both to explain the nature of the controversy, and to indicate the relevancy and materiality of the questions upon which rulings are invoked Paterson, Downing & Co., of New York City, were engaged in buying and exporting naval stores. They had agents or business connections at nearly all of the South Atlantic and Gulf ports, including Brunswick, Ga., through whom rosin and turpentine were purchased at inland points, transported by rail to these ports, and then loaded on vessels for export. Desiring protection against possible losses by fire Paterson, Downing & Co. during the fall of 1895 applied to the Thames & Mersey Marine Insurance Company and the Corporation of the London Assurance for insurance to the amount of $50,000, which should cover all naval stores subsequently purchased, not only while stored in warehouses at these several ports awaiting export, but also while in transit from inland points to the coast. The company first named undertook to carry two-fifths, and the latter company three-fifths, of the insurance applied for; and accordingly each issued what is commonly known as an "open policy," dated October 12, 1895, the purpose of which was to enable the insured, by simply reporting a shipment from a given point, and agreeing upon the rate of premium, to immediately bring within the protection of the policy any particular consignment they might wish to be covered thereby. Later, the insured applied to the Corporation of the London Assurance for additional insurance, to cover all naval stores while located at certain designated ports, the value of which should be in excess of the $50,000 for which they were, as above stated, already insured. Thereupon, under the date of December 18, 1895, this company entered upon the policy previously issued by it the following indorsement: "It is hereby understood and agreed that upon notice from the assured, and from the time such notice is given, provided it be before known loss, this policy shall cover not exceeding $50,000.00 on the excess of $50,000.00 on goods as herein described, at the ports enumerated herein, for a period of not exceeding fifteen days; such period, however, to be renewable one or more times for other periods of fifteen days, each upon notice from the assured prior to the beginning of such other period,--a premium to be arranged to be paid for each period." On January 11, 1896, the insured gave notice that they desired additional insurance on naval stores located at Brunswick, to the extent of $50,000, agreeably to this indorsement, for a period of 15 days from that date; and the company accepted the notice, and fixed the premium. Further notices were from time to time subsequently given and accepted, by which this insurance was extended for successive periods of 15 days; the last notice stipulating that the period to be covered was from March 26 to April 10, 1896. A loss by fire occurred on April 2d, the greater part of the goods on storage in Brunswick being consumed. Besides the insurance above referred to, the insured held a number of policies, covering the same property, which had been issued by various fire insurance companies at different periods during the latter part of the year 1895 and the early part of 1896. An attempt was made to adjust the loss, but the several companies failed to agree among themselves as to the respective proportion thereof each should bear. This gave rise to the present litigation, the purpose of which was to fix the liability of each, and to compel payment to the insured accordingly. The case involved many complicated questions, both of law and of fact, and was referred to an auditor, who duly made a report covering all the points at issue.
Being dissatisfied with the auditor's findings concerning the adjustment to be made of the loss, the Corporation of the London Assurance filed numerous exceptions to his report; and, the same being overruled and disallowed by the court below, that company now brings the case here for review. Such other facts as are necessary to an understanding of the questions presented for adjudication will be stated in immediate connection with the points to which the same relate, and will be developed as occasion requires in the discussion which follows.
1. It appeared on the hearing before the auditor that a portion of the goods destroyed by fire arrived in Brunswick prior to October 12, 1895; and it was insisted by the London Assurance Company that it was not liable, either under the policy issued by it on that date, or under the indorsement of December 18th entered thereon, to pay any part of the loss thus sustained. Exception is taken to the finding of the auditor "that the several notices given under and by virtue of the indorsement of December 18, 1895, on the defendant's policy, for the purpose of procuring excess insurance as thereby provided, were 'silent as to the receipt of the stuff designed to be covered by them."' The record, however, shows, manifestly, that this complaint is without merit. In the first place, it would seem, the auditor's finding was in accord with the only possible construction which could be placed upon the language in which these notices were couched. Besides, notwithstanding the same did not specifically limit the operation of the insurance thereby effected to goods received subsequently to October 12, the auditor expressly announced his conclusion to be that, in view of the parol evidence submitted, "it was the intention of the plaintiffs and the said London Assurance, as evidenced by their dealings, *** that this indorsement was not designed to cover goods received prior to October 12, 1895." Accordingly, in fixing the liability of this company, the auditor found that it was answerable only for its just proportion of the loss on goods which arrived in Brunswick after that date, which ruling gave to this company the full benefit of its contention, and relieved it of all liability as to other goods destroyed in the same fire.
2. Another question presented for determination is, what was the legal effect of the indorsement of December 18th, above quoted, which was entered on the policy previously issued by the London Assurance? Obviously, it was the intention of the parties to provide for additional insurance, to become operative whenever the insured gave the required notice, and the premium to be charged was fixed, upon the same terms and conditions, so far as applicable, as had been previously agreed on when the company wrote its policy covering the $30,000 risk originally accepted. In other words, the company agreed, if called upon by the insured, to increase the amount of insurance it had in the first instance undertaken to carry; and, instead of issuing another policy containing the stipulations upon which such additional insurance was proposed, the plan was adopted of indorsing its proposal upon a policy already held by the assured, in which the terms and conditions upon which it was willing to insure the...
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