Liverpool, London & Globe Ins. Co. v. T. M. Richardson Lumber Co.

• Decision Date: 18 February 1902
• Citation: 69 P. 936,11 Okla. 579,1902 OK 7
• Court: Oklahoma Supreme Court
• Parties: THE LIVERPOOL, LONDON & GLOBE INSURANCE COMPANY, a Corporation, v. THE T. M. RICHARDSON LUMBER COMPANY, a Corporation.

1902 OK 7

69 P. 936

11 Okla. 579

THE LIVERPOOL, LONDON & GLOBE INSURANCE COMPANY, a Corporation, v. THE T. M. RICHARDSON LUMBER COMPANY, a Corporation.

Supreme Court of Oklahoma

Decided: February 18, 1902

Error from the District Court of Oklahoma County; before B. P. Burwell, Trial Judge.

Syllabus

¶0 1. CONTRACT IN WRITING--Effect of. The execution of a contract in writing supersedes all the oral negotiations or stipulations concerning its matter which preceded or accompanied the execution of the instrument.

2. CONTRACT--Parol Evidence--Not Admissible, When. Where the terms of a written contract are clear, plain, explicit and free from all ambiguity parol testimony is not admissible to change or vary its terms.

3. INSURANCE POLICY--Duty of Assured. An applicant for insurance who accepts a policy, the provisions of which are plain, clear and free from all ambiguity is chargeable with knowledge of its terms and legal effect. It is the duty of the assured to read and know the contents of the policy before he accepts it, and where he fails or neglects to do so he is estopped from denying knowledge of its terms and conditions unless he alleges and proves that he was induced not to read the policy by some trick or fraud of the other party.

Stuart & Gordon and John W. Shartel, for plaintiff in error.

Howard & Ames, for defendant in error.

HAINER, J.:

¶1 This was an action brought by the T. M. Richardson Lumber company against the Liverpool, London & Globe Insurance company to recover upon a fire insurance policy issued on December 7, 1896, for a loss occasioned by fire on June 12, 1897. The property covered by the insurance policy is described as follows: "On its stock of lumber, lath, shingles, posts, pickets, sash and doors, while contained in the sheds and yards situated on the north side of the C. O. & G. railroad in the town of Red Oak, I. T. * * * Clear space and seventy-five per cent. company insurance clauses attached." The policy contained, among others, the following provision: "Warranted by the assured that a clear space of two hundred feet, tramways excepted, shall be always maintained between the lumber hereby insured and any mill or other manufacturing establishment, or else this policy shall be void." The policy was written by the local agent of the insurance company at Oklahoma City, Oklahoma, and delivered to the defendant in error with the said clear space clause attached in a conspicuous place on the face of said policy. The defendant in error accepted the policy as thus written and paid the premium therefor, which was $ 2.50 per hundred where the policy contained the clear space clause. No objection was made to the conditions in the policy by the defendant in error. The undisputed testimony shows that the clear space lumber clause was not maintained by the defendant in error, and that the lumber which was destroyed, for which the plaintiff in the court below seeks to recover, was located in the yard and sheds and that the sheds were adjoining the mill. There was no testimony to show that there was any written or verbal agreement or understanding between the plaintiff and defendant that the clear space lumber clause should not be inserted in the policy. There was no averment in the plaintiff's petition of mistake or fraud, and there is no proof or even suggestion of mistake or fraud in the record.

¶2 A jury having been waived the cause was tried by the court. There was no objection to any of the evidence introduced by either the plaintiff or defendant. The cause was tried on the theory that since the local agent and the state agent had examined the property and knew the situation thereof prior to the time the insurance policy was written by the local agent and delivered to the insured, that the plaintiff thereby waived the clear space clause in its policy and was estopped from defeating plaintiff's recovery upon the policy, and this is the contention of the defendant in error.

¶3 We think the contention of counsel for defendant in error is clearly unsound and untenable. The contract is clear and explicit. There is no doubt or ambiguity in its terms and provisions. There is no rule of law better settled upon reason and authority than where the terms of a written contract are clear, plain, explicit and free from all ambiguity that parol testimony is inadmissible to change or vary from its terms.

¶4 In Merchants Mutual Insurance Company v. Lyman, 15 Wall. 664, 21 L. Ed. 246, it is held by the supreme court of the United States that parol testimony is not admissible to show that a parol contract of insurance was made before a loss occurred, where the written contract was...