Lumber Underwriters of New York v. Rife

• Decision Date: 01 June 1915
• Docket Number: No. 279,279
• Parties: LUMBER UNDERWRITERS OF NEW YORK et al., Petitioners, v. O. C. RIFE et al
• Court: U.S. Supreme Court

237 U.S. 605

35 S.Ct. 717

59 L.Ed. 1140

LUMBER UNDERWRITERS OF NEW YORK et al., Petitioners,

v O. C. RIFE et al.

No. 279.

Argued May 13, 1915.

Decided June 1, 1915.

Mr. R. Lee Bartels for petitioners.

Mr. Caruthers Ewing for respondents.

[Argument of Counsel from pages 605-607 intentionally omitted] Mr. Justice Holmes delivered the opinion of the court:

This is a suit upon a policy insuring lumber for one year from May 22, 1909. The policy contained a warranty by the assured that a continuous clear space of 100 feet should be maintained between the lumber and the mill of the assured, and also a provision requiring any waivers to be written upon or attached to the instrument. The lumber was burned during the year, but it appeared by the undisputed evidence that the warranty had been broken, and the judge directed a verdict for the defendants. It appeared, however, that the policy was indorsed, 'No. 27,868, renewing #27,566,' and the plaintiffs offered to prove that pending the earlier policy the defendants had the report of an inspection that informed them of the actual conditions, showing permanent structures between where some of the lumber was piled and the mill, that made the clear space in this direction less than 100 feet, and that with that knowledge they issued the present policy and accepted the premium. This evidence was excluded, subject to exception. But it was held by the circuit court of appeals that the jury should have been allowed to find whether the defendants had knowledge of the conditions and reasonable expectation that they would continue, and so had waived the warranty. For this reason the judgment was reversed. 122 C. C. A. 346, 204 Fed. 32.

When a policy of insurance is issued, the import of the transaction, as everyone understands, is that the document embodies the contract. It is the dominant, as it purports to be the only and entire, expression of the parties' intent. In the present case this fact was put in words by the proviso for the indorsement of any change of terms. Therefore when, by its written stipulation, the document gave notice that a certain term was insisted upon, it would be contrary to the fundamental theory of the legal relations established to allow parol proof that at the very moment when the policy was delivered that term was waived. It is the established doctrine of this court that such proof cannot be received. Northern Assur. Co. v. Grand View Bldg. Asso. 183 U. S. 308, 46 L. ed. 213, 22 Sup. Ct. Rep. 133; Northern Assur. Co. v. Grand View Bldg. Asso. 203 U. S. 106, 107, 51 L. ed. 109, 111, 27 Sup. Ct. Rep. 27; Connecticut F. Ins. Co. v. Buchanan, 4 L.R.A.(N.S.) 758, 73 C. C. A. 111, 141 Fed. 877, 883. See Penman v. St. Paul F. & M. Ins. Co. 216 U. S. 311, 54 L. ed. 493, 30 Sup. Ct. Rep. 312; AEtna L. Ins. Co. v. Moore, 231 U. S. 543, 559, 58 L. ed. 356, 366, 34 Sup. Ct. Rep. 186. There is no hardship in this rule. No rational theory of contract can be made that does not hold the assured to know the contents of the instrument to which he seeks to hold the other party....