Farmers' Fire Ins. Co. v. Baker
| Decision Date | 30 January 1902 |
| Parties | FARMERS' FIRE INS. CO. OF YORK, PA., v. BAKER. |
| Court | Maryland Court of Appeals |
Appeal from circuit court of Baltimore city; Albert Ritchie, Judge.
Suit by Frederick W. Baker against the Farmers' Fire Insurance Company of York, Pa. Decree for plaintiff, and defendant appeals. Affirmed.
Argued before McSHERRY, C.J., and FOWLER, BRISCOE, BOYD, PAGE PEARCE, SCHMUCKER, and JONES, JJ.
Frank P. Clark, for appellant.
John L.G. Lee, for appellee.
The cause of action in this case, upon which it was instituted in the court below, is a contract of insurance against loss by fire, which contains the following stipulations, numbered respectively, 6, 9, 14, and 18: "(6) Persons sustaining loss or damage by fire shall forthwith give notice thereof in writing to the secretary of the company, and within thirty days deliver a true copy of the written part of the policy with the indorsements thereon, if any, and a particular account of the loss or damage; and they shall accompany the same with their oath or affirmation, declaring the said account to be true and just; showing, also, what other insurances, if any, have been made on the same property, and giving a copy of the written portion of the policy of each company, with the indorsement thereon, if any; whether incumbered, and, if so, how and to what amount; in what manner the building insured, or containing the property insured, was occupied at the time of the loss, and who were occupants thereof; and when and how the fire originated, so far as they know or believe or have any information." "(14) In case loss or damage under this policy is made payable, by assignment or otherwise, to a third party, then, in case of loss or damage, the assured party, and not the assignee or third party, must make the requisite proofs of loss in conformity with the conditions of this policy, in like manner as if no assignment or collateral condition has been made; otherwise this policy shall be void." "(18) The insurance under this policy shall cease at and from the time the property hereby insured shall be levied on or taken into possession or custody under any proceeding in law or equity, whether there be any change in possession or not; and should there, during the life of this policy, an incumbrance fall or be executed upon the property insured, and the assured shall neglect or fail to obtain the consent of the company thereto, then and in that case this policy shall be void."
The contract in question was between the appellant, an insurance company incorporated under the laws of the state of Pennsylvania, and one Joseph W. Gorrell, who on the 12th day of March, 1894, had executed to the appellee in this case, Frederick W. Baker, a mortgage upon his farm, situated in Harford county, this state, to secure the payment of the sum of $2,500 owing from the said Gorrell to the appellee, and had covenanted therein to insure, up to their insurable value, and keep insured, during the continuance of the said mortgage, the improvements on the mortgaged land, "and to cause the policy or policies issued therefor to be so framed or indorsed as in case of fire to inure to the benefit of the mortgagee, his heirs or assigns, to the extent of his or their lien or claim" thereunder. Among other buildings on the farm, the dwelling house was insured to the amount of $500. On the 8th of August, 1900, this dwelling house was totally destroyed by fire. The appellee made a claim upon the appellant to be paid the loss under the policy of insurance which had been issued by it to Gorrell as has been stated. Failing to induce the appellant to make payment of the loss as demanded, the appellee on the 19th day of November, 1900, filed in the court below his bill of complaint, in which he alleged the facts already stated, and that the mortgage indebtedness due him from the mortgagor, which was provided to be paid in five years from the date of his said mortgage, was overdue and unpaid; that the mortgagor, Gorrell, had on the 13th day of August, 1894, taken out a policy of insurance from the appellant company for the sum of $1,305, numbered 7,624; that, in the distribution of insurance among the buildings upon the mortgaged premises, the stone house thereon (being the dwelling house already mentioned) was insured at $500; that said policy was taken out for the term of three years, and expired on the 13th day of August, 1897, when a new policy was issued to cover loss from fire upon the same property, and similar to the first, for another period of three years, making the time for the same to expire the 13th day of August, 1900; that the consideration for issuing the policy was duly paid; that the policy so taken out "was made payable to the mortgagee, and so indorsed, but was never delivered to" the complainant (appellee), as was agreed to be done in the mortgage; that the appellee (complainant below) was the only mortgagee of the property mentioned in his mortgage; that this policy had "been lost, and neither the said Joseph W. Gorrell nor Frederick W. Baker" was "able to find it or produce it," and therefore were "not able to prove the loss according to its terms and provisions," and had so notified the appellant (defendant below); that appellee stood ready "to indemnify the defendant [[appellant], by bond or otherwise," from the loss in controversy, "if the said insurance policy should be recovered"; that the appellee had duly notified the appellant company of the loss in question by letters of date August 9 and 25, 1900, also by written statement on August 27th, and on September 27th by sworn statement of his claim; that he also notified the agent of appellant residing in Harford county, through whom the insurance was negotiated for and effected upon the property in question; that this agent visited the premises injured by the fire on the day of the fire; that he made out his claim as mortgagee, and duly submitted it to the appellant; that the mortgaged property is not sufficient to pay the mortgage debt; and that Joseph W. Gorrell refused to claim or prove loss for the said insurance, he having no interest in the same. The bill then prays that the appellant be required to answer under oath, "and discover and set forth in detail the terms, conditions, clauses, and covenants of the policy issued" on the 13th day of August, 1897, to Gorrell, as charged in the bill, the amount of the same, and to whom it was payable, and that the amount of the policy be decreed to be paid to Baker. The appellant answered the bill, admitting the issuing of the policy of insurance to Joseph A. Gorrell on the 13th of August, 1897, as charged in the bill, and that the same was not delivered to the appellee, but avers it was delivered to Gorrell or to his agent, and, in answer to the prayer of discovery, produced and filed with its answer a copy of the policy so issued, which showed upon its face an entry as follows: The answer avers that the appellant knew nothing of the loss of the policy, but that if the same was lost, if such fact had been made known to it by the assured, "it would, as is its invariable custom, have issued a duplicate policy to him or his agent." It then denies that there is any agreement or any privity of contract between the appellant and appellee under the contract of insurance in suit, and then claims that, if such agreement had existed, the contract has been rendered null and void by the violation or nonobservance of the conditions of the sixth, fourteenth, and eighteenth clauses thereof. There was little or no contradiction in the testimony offered in support of the allegations of the bill. The questions arising thereon are as to the effect to be given to it as relates to the matters of defense set up by the appellant.
The appellant urges three grounds of defense to recovery in the suit: (1) That Joseph W. Gorrell was a necessary party to the suit, and the appellee's bill should have been dismissed for the want of necessary parties; (2) there were no sufficient preliminary proofs of loss furnished; (3) the policy was void at the time of the loss insured against, because of the violation of the conditions of the eighteenth clause thereof. In proceeding to consider these propositions, we will take them in inverse order.
The appellant's claim of a violation of the eighteenth clause of the policy is based on the following facts: Before the occurrence of the loss which is the subject of this controversy, on the 16th day of August, 1899, the appellee began in the circuit court for Harford county proceedings to foreclose the mortgage upon the insured premises, which contained the covenant by virtue of which the loss had been made payable to the appellee. An interlocutory decree had been entered against the mortgagor, whereupon he filed in the cause a petition alleging that there had been between him and the appellee certain negotiations...
To continue reading
Request your trial