Meigs v. Insurance Company of North America

• Decision Date: 20 April 1903
• Docket Number: 318
• Citation: 205 Pa. 378,54 A. 1053
• Parties: Meigs v. Insurance Company of North America
• Court: Pennsylvania Supreme Court

54 A. 1053

205 Pa. 378

Meigs v. Insurance Company of North America

No. 318

Supreme Court of Pennsylvania

April 20, 1903

Argued February 3, 1903

Appeal, No. 318, Jan. T., 1902, by defendant, from order of C.P. Montgomery Co., June T., 1902, No. 83, dismissing exceptions to findings of fact and conclusions of law of court and entering final judgment in favor of plaintiff in case of John Meigs v. The President & Directors of the Insurance Company of North America. Affirmed.

Assumpsit to recover from the defendants their pro rata share of loss by fire upon a wing of the Hill school at Pottstown and its contents.

The case was tried under the provisions of the act of April 22 1874, on June 24, 1902, before SWARTZ, P.J., without a jury.

From the adjudication it appeared that, February 17, 1900 plaintiff had placed, in ten different companies, fire insurance aggregating $130,000 upon the building, and $50,000 upon its contents. These policies each contained the provision: "Privilege granted to make additions, alterations and repairs, and this policy to cover on and in same," and were referred to by the court as class A.

Subsequently plaintiff built an addition and, on October 27, 1901, placed in thirteen companies specific insurance aggregating $60,000 upon the wing or addition and $7,500 upon its contents. These policies were referred to by the court as class B and each contained the following clause:

"This company shall not be liable under this policy for a greater proportion of any loss on the described property, or for loss by any expense of removal from premises endangered by fire, than the amount hereby insured shall bear to the whole insurance, whether valid or not, or by solvent or insolvent insurers, covering such property . . . ."

On December 29, 1901, a fire occurred which caused loss adjusted as follows: loss on east wing building, $28,668.50; loss on contents in east wing, $13,250 (This item includes students' wearing apparel, $4,500); loss on buildings other than east wing, $1,815.65; loss on contents in buildings other than east wing, $2,382.30.

The defendants had issued one of class B policies and contended that their pro rata share was to be determined by considering not only the other class B policies but also the class A policies. They paid to plaintiff the amount due according to this view, $1,573.25, without prejudice.

On August 18, 1902, SWARTZ, P.J., filed separate findings of fact and conclusions of law adverse to the defendant's contention and entered judgment for plaintiff for $2,504.94, the amount due in addition to the amount already paid.

On September 3, 1902, defendant filed exceptions. On November 17, 1902, the exceptions were dismissed and final judgment entered for plaintiff.

Errors assigned were in dismissing exceptions to the adjudication.

The judgment is affirmed.

G. W. Pepper, with him Montgomery Evans, for appellant. -- The question is do the general (class A) policies share in the loss upon the addition and its contents or do the specific (class B) policies bear the entire loss thereon?

Class A policies cover the addition. If class B policies had not been written, class A policies would have borne the entire loss upon the addition and its contents.

There is no room for the contention that, after first exhausting the class A insurance, the insured is entitled to fall back upon the class B insurance. Either both classes rank together or class A policies escape entirely: Merrick v. Germania Ins. Co., 54 Pa. 277.

There are two standard clauses in regard to "other" or "double" insurance: First, that other insurance shall avoid the policy and, second, the one here involved, which is the pro rata contribution clause.

Where there is specific insurance providing against other or double insurance upon the property covered, and another policy is taken out covering that and other property, there is double insurance which defeats recovery on the specific policy: Bard v. Penn Mutual Fire Insurance Co., 153 Pa. 257; Associated Firemen's Ins. Co. v. Assum, 5 Md. 165; Phoenix Ins. Co. v. Michigan Southern, etc., R.R. Co., 28 Ohio 69.

The clause in question was introduced merely to avoid circuity of action in working out the equities of contribution between coinsurers. Before its introduction, the insured might recover the entire amount of the loss from any insurer, and the insurer paying might then recover contribution from the other insurers: Thurston v. Koch, 4 Dal. 348; Cromie v. Kentucky, etc., Mut. Ins. Co., 15 B. Mon. 432; Arnould on Marine Ins. p. 1113; Joyce on Insurance, secs. 1416, 2489, 3472. It obviously has no effect where two policies cover precisely the same property and the amount of the loss is greater than the total amount of insurance. And where two policies cover the same property, but one of them covers a second property also, and there is a loss upon the two properties, the loss upon the second property being greater than the amount of the insurance upon the second property, this clause was not intended to apply. To give effect to it upon such facts would be to defeat the object of the contract, -- full indemnity to the insured: Angelrodt & Barth v. Delaware Mut. Ins. Co., 31 Mo. 593; Sloat v. Royal Ins. Co., 49 Pa. 14; Phillips v. Perry County Ins. Co., 7 Phila. 673; Royal Ins Co. v. Roedel, 78 Pa. 19.

But where to give effect to this clause, as here is the only means of giving full indemnity to the insured, effect should be given to it. If class A policies do not share the loss upon the wing and its contents, inasmuch as the loss upon contents was greater than the amount of class B insurance, the insured will not be fully indemnified, although he has paid for enough insurance in the two classes (A and B) to entirely cover this loss: Merrick v. Germania Ins. Co., 54 Pa. 277; Page v. Sun Ins. Co., 36 U.S. App. 672; Home Insurance Co. v. Balto. Warehouse Co., 93 U.S. 527; Blake v. Exchange Mut. Ins. Co., 78 Mass. 265; Odgen v. East River Ins. Co., 50 N.Y. 388; Mayer v. Amer. Ins. Co., 2 N.Y.S. 227; Mayer v. Amer. Ins. Co., 18 Ins. L.J. 156; Hough et al. v. Peoples' Fire Ins Co., 36 Md. 398.

In Clarke v. Western Assurance Co., 146 Pa. 561, the policies, properly construed, did not describe the same property at all. The case is, therefore, not in point. If it be taken as a decision upon facts similar to the facts in this case, it is submitted that the rule there enunciated should be reconsidered and modified.

In Lumberman's Exchange v. Am. Cent. Ins. Co., 183 Pa. 366, the interests insured were different. It is well settled that there can be no contribution nor prorating in such cases: Fox v. Phenix Fire Ins. Co., 52 Me. 333; Liverpool, etc., Ins. Co. v. Verdier, 33 Mich. 138; Tuck v. Hartford Fire Ins. Co., 56 N.H. 326; Adams v. Greenwich Ins. Co., 9 Hun, 45; Hastings v. Westchester Fire Ins. Co., 73 N.Y. 141; Woodbury Savings Bank v. Charter Oak Ins. Co., 31 Conn. 517; Niagara Fire Ins. Co. v. Scammon, 35 Ill.App. 582; Nichols v. Fayette Mut. Fire Ins. Co., 83 Mass. 63; Wheeler v. Watertown Fire Ins. Co., 131 Mass. 1; Traders' Ins. Co. v. Robert, 9 Wend. 404; Guest v. New Hampshire Fire Ins. Co., 66 Mich. 98; Joyce on Ins. sec. 2470.

As to the intention of the parties as derived from sources other than the policy itself, see: Martin v. Berens, 67 Pa. 459; Smith v. National Life Ins. Co., 103 Pa. 177; Medary v. Cathers, 161 Pa. 87; Dixon-Woods Co. v. Phillips Glass Co., 169 Pa. 167; Weisenberger v. Harmony Fire, etc., Ins. Co., 56 Pa. 442.

N. H. Larzelere, with him Muscoe M. Gibson and Gilbert R. Fox, for appellee -- The simple question is whether Sloat v. Royal Ins. Co., 49 Pa. 14, Royal Ins. Co. v. Roedel, 78 Pa. 19, Clarke v. Western Assurance Co., 146 Pa. 561, and Lumberman's Exchange v. Am. Cent. Ins., Co., 183 Pa. 366, are still the law of this state, or to be overruled. The Sloat case was decided in 1865; Roedel in 1875; Clarke in 1892; and the Lumberman's Exchange in 1898, hence, the original decision was made thirty-seven years ago, and has been three times reconsidered. It does not, therefore, come before us as an original question long ago decided and which has slumbered many years until new conditions and new views render a reversal or modification necessary.

In Grandin v. Rochester German Insurance Co., 107 Pa. 26, it was decided that fire insurance was a contract of indemnity, and policies must have a reasonable construction in view of that main intent of the parties, having reference to the peculiar nature and situation of the subject-matter insured; and if obscurity in its meaning exists, it must be construed as between the parties most strongly against the insurance company which issued it.

As to the intention of the parties as derived from sources other than the contract, see: Stacey v. Franklin Fire Ins. Co., 2 W. & S. 506, 545; Fraim v. Nat. Fire Ins. Co., 170 Pa. 151; Wood on Fire Ins. sec. 379; Mentz v. Lancaster Fire Ins. Co., 79 Pa. 475; Lycoming Mut. Ins. Co. v. Sailer, 67 Pa. 108; Steele v. Franklin Fire Ins. Co., 17 Pa. 290; Foster v. U.S. Ins. Co., 28 Mass. 85; Clinton v. Hope Ins. Co., 45 N.Y. 454; Parks v. General Interest Assurance Co., 22 Mass. 34; Astor v. Union Ins. Co., 7 Cowen, 202; Meadowcraft v. Standard Fire Ins. Co., 64 Pa. 91; Davis Lumber Co. v. Hartford Fire Ins. Co., 37 L.R.A. 131; Newark Machine Co. v. Kenton Ins. Co., 22 L.R.A. 768; Hanover Fire Ins. Co. v. Dole, 50 N.E. Repr. 772; Elliott on Fire Ins. sec. 301; Grove v. Donaldson, 15 Pa. 128; Fire Assn. v. Rosenthal, 108 Pa. 474; Brownfield's Exrs. v. Brownfield, 151 Pa. 565; Wolf v. Guffey, 161 Pa. 276.

Before MITCHELL, DEAN, BROWN, MESTREZAT and POTTER, JJ.

OPINION

MR. JUSTICE MESTREZAT:

In Sloat v. Royal Insurance Co., 49 Pa. 14, decided...