Glover v. National Fire Ins. Co.

• Decision Date: 01 February 1898
• Docket Number: 238.
• Citation: 85 F. 125
• Parties: GLOVER v. NATIONAL FIRE INS. CO. OF BALTIMORE.
• Court: U.S. Court of Appeals — Fourth Circuit

85 F. 125

GLOVER v. NATIONAL FIRE INS. CO. OF BALTIMORE.

No. 238.

United States Court of Appeals, Fourth Circuit.

February 1, 1898

About May 10, 1893, Dr. S. G. Glover, the plaintiff in error bought from G. H. Jackson & Co., of Cairo, Ill., a house and lot at Ashland, about 20 miles from Richmond, Va. The house was at that time occupied by Mrs. Baldwin, a sister of Jackson, who had 'some boarders or roomers there,' and was insured in the defendant company through the agency of S. H. Pulliam & Co. who were the general agents of the insurance company, having power to write or issue policies without submitting the risk to the home office, which was at Baltimore, Md. The Pulliams were relative of The jacksons and to some extent looked after their interests' Hill Carter, Esq., a member of the bar of Richmond, being their attorney who prepared the deed of conveyance from Jackson to Glover and forwarded the same for execution to Cairo. Without waiting for the return of the deed of conveyance, and after the sale was agreed upon, Glover was let into possession of the property, and immediately established in it a Keeley institute. The terms of sale were a part cash and a part in notes secured by a deed of trust. The property had been insured in the name of Jackson in the defendant company, the policy bearing date May 6, 1893, and running for three defendant company, the policy bearing date May 6, 1893, and running for three years, and was described as 'one frame dwelling at S.W. corner College Ave. and Taylor street, in Ashland, Va., L.C.A.' It does not appear that the Jacksons had ever signed any application for insurance, or furnished any description of it. Carter, as attorney for the Jacksons, desiring security by way of insurance for the deferred payments, went with Glover, who was a citizen of the state of Nebraska, to Pulliam's office, and introduced him. He is uncertain whether the introduction was to Samuel H. or to Thompson Pulliam, both being members of the firm. The object of their visit being to secure the payment of the amount due on the deferred notes to the Jacksons, in the event of a loss by fire, it was considered better to issue a new policy instead of transferring the old one. The exact date of this visit is not disclosed by the testimony. It was probably some day between May 10th and May 19th, and on the 22d May this letter was written 'Richmond, Va., May 22nd, 1893.

'Mr Hill Carter, City-- Dear Sir: We inclose herewith policy for Dr. S. G. Glover, the same having been properly indorsed, and you will please collect from him $52.50 for the same for account of Messrs. Jackson & Co., unless you have already done so.

'Yours truly,

Samuel H. Pulliam & Co.'

The policy No. 50,766, is for $3,500, in the name of Dr. S. G. Glover, and the property is described as follows: 'On the three story frame, metal or slate roof building, occupied as a dwelling, situate at the southwest corner of College avenue and Taylor street, in Ashland, Ba. Loss, if any, payable to Hill Carter, trustee, as his interest may appear. ' It is countersigned by Saml. H. Pulliam & Co., agents, May 23, 1893, and expires on May 6, 1896. The building was destroyed by fire on February 3, 1896, and this is an action in assumpsit on the policy, to which the defendant company pleaded the general issue, with an agreement of counsel that under this plea any defense might be set up which defendant might prove under a special plea.

The action was originally brought in the circuit court for the city of Richmond, and removed by the defendant company by petition to the United States circuit court for the Eastern district of Virginia, where it came on to be heard in due course, resulting in a verdict for the defendant, the jury stating that they found for the defendant 'under the instructions of the court. ' The testimony clearly showed that the house was used for the reception, entertainment, and treatment of patients in a Keeley cure establishment, and the proof was that the rate of premium charged for dwelling houses was considerably less than that for such establishments which were rated as hospitals; the rate for dwellings being 60 cents per $100; for boarding houses, $1.50 per $100; for hospitals, $1.60 per $100; there being no special rate for Keeley cure establishments eo nomine. These were the rates fixed by the Southeastern Tariff Association. There was no proof that the difference of rates was brought to the attention of Glover prior to the writing of the policy, and his testimony was that he never knew that there was any difference in premium. In the course of the trial evidence was offered tending to show that at the time the insurance was effected the agents for the insurance company knew that the building insured was occupied as a Keeley institute. This testimony was taken subject to exception, but subsequently the defendant moved to strike out all the testimony on the part of the plaintiff's witnesses relative to conversations alleged to have been held with the agent of the defendant prior to the issue of the policy, 'because all such conversations, if had, were merged into the written contract. ' This motion was granted, and the court charged the jury that the 'uncontradicted testimony in the case is that the rates for insuring a dwelling house used as a dwelling are much lower than for a building used for the entertainment, reception and treatment of patients in an establishment like this. The rate paid by the plaintiff the consideration for his contract, was that of a dwelling house used as a dwelling, and not for an establishment for the Keeley cure. Here, then, he has alleged one kind of contract and proved another. If we were now to say that the insurance was not on a dwelling house to be used as a dwelling, we would be making for the parties a new contract; certainly not the contract upon which this suit was brought. ' The court thereupon instructed the jury to find for the defendant, and it so found.

Charles V. Meredith (Preston Cocke, on brief), for plaintiff in error.

William Pinkney Whyte, for defendant in error.

Before GOFF, Circuit Judge, and BRAWLEY and PURNELL, District Judges.

BRAWLEY District Judge, after stating the case as above, .

The grounds upon which the court below was moved to reject the testimony was that all conversations between the parties were merged into the written contract, and that parol evidence was inadmissible to show that the intent and meaning of the parties was different from what the words of the contract expressed; and authorities of commanding weight are cited to support the proposition that when a policy contains plain and unambiguous language, which has a settled legal construction, neither party can, by parol evidence be permitted to prove that the instrument does not mean what it says. This motion proceeded upon a misconception of the object for which the testimony was offered. It was not for the purpose of changing the terms of the contract but to show that the circumstances were such that, at the time that the contract was entered into, the insurer actually knew all the facts relating to the risk, and is estopped by such actual knowledge from setting up in avoidance of the policy either the mistake or omission to state those facts upon its face. The court below held that, as the policy was upon a house used as a 'dwelling house,' the plaintiff was not entitled to recover, because the proof showed that the house was used as a Keeley institute, and, as the rate of premium charged for a Keeley institute was much greater than that charged upon a dwelling house, he could not allege one kind of contract and recover upon proof of another, not allege one kind of contract and recover upon proof of another, and the testimony was offered to show that the plaintiff was ignorant of the difference in the rates, that he did not furnish a description of the property insured, and that at the time when the policy was written the agent knew that the house was in actual use as a Keeley institute. This testimony was objected to, not because of its insufficiency, but for illegality, in that it tended to vary the terms of the written contract. The proof showed that at the time when the plaintiff purchased the property in question it was insured in the defendant company, and that it was then occupied as a boarding house by a relative of the agents of the company; that for the purpose of securing the deferred payments it was deemed advisable that a new policy be issued; that immediately after the purchase it was occupied by the plaintiff as a Keeley institute; and testimony was offered tending to show that the agents of the company knew that it was so occupied.

It is not claimed that the plaintiff was guilty of any fraud or concealment of the nature of the use for which the property was intended, or that he furnished the description which was written in the policy. Whatever may be the conclusion as to the lack of definiteness in the conversation with the agents at the time the insurance was effected, the admitted facts controvert any suspicion that the misdescription in the policy was due to any concealment or lack of openness on the part of the plaintiff, or that the building subsequent to the writing of the policy was converted to another and different use. The policy was written after the plaintiff had left Richmond, and was left with Hill Carter, Esq., who was the attorney for the vendors, and never seen by the plaintiff until after the fire occurred. Under these circumstances, we are of opinion that testimony tending to show that at the time the policy was written the agents of the insurance company knew that it was occupied as a Keeley institute was competent, and that the court below erred in...