Meigs v. London Assur Co.

• Decision Date: 11 January 1904
• Docket Number: 72.
• Citation: 126 F. 781
• Parties: MEIGS v. LONDON ASSUR. CO.
• Court: U.S. District Court — Eastern District of Pennsylvania

126 F. 781

MEIGS v. LONDON ASSUR. CO.

No. 72.

United States Circuit Court, E.D. Pennsylvania.

January 11, 1904

Larzelere Gibson & Fox and R. C. Dale, for plaintiff.

Montgomery Evans and George Wharton Pepper, for defendant.

J. B McPHERSON, District Judge.

The facts are not in dispute, and I find them to be as follows:

(1) The plaintiff is the owner of a group of buildings at Pottstown Pa., which he uses for a boys' boarding school. It is well and widely known as the 'Hill School.' On February 17, 1900, he insured the main building, consisting of several wings or attached buildings, and also its contents, for three years, in 10 fire insurance companies the policies insuring $130,000 on the building, which was its full value, and $50,000 on its contents. These policies will be spoken of as 'Class A.' They contained the following provisions:

'Privilege granted to make additions, alterations and repairs, and this policy to cover on and in same; to use the electric current; for other insurance without notice, and for the building hereby insured to be unoccupied a portion of each year, as is customary with colleges, but to be in charge of a responsible person living on the premises.'

'If at the time of the fire the whole amount of insurance on the property covered by each separate item of this policy on property described in such item shall be less than the actual cash value thereof, this company shall, in case of loss or damage, be liable for only such portion of such loss or damage as the amount insured under said item shall bear to the said actual cash value of the property covered by such item.'

'This company shall not be liable under this policy for a greater proportion of any loss on the described property, or for loss by an 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.'

'No officer, agent, or other representative of this company shall have power to waive any provision or condition of this policy, except such as by the terms of this policy may be the subject of agreement indorsed hereon or added hereto, and as to such provisions and conditions no officer, agent, or representative shall have such power or be deemed or held to have waived such provisions or conditions unless such waiver, if any, shall be written upon or attached hereto, nor shall any privilege or permission affecting the insurance under this policy exist or be claimed by the insured unless so written or attached.'

(2) Afterwards the plaintiff built an addition, called the 'east wing,' which was not in contemplation when the insurance of February 17th was effected. It cost $60,000, and on October 27, 1900, he placed specific insurance on the addition and its contents in 13 companies, the defendant being one; the policies insuring $60,000 on the building and $7,500 on its contents. These policies will be spoken of as 'Class B.' They describe the building insured as 'an addition to the Hill School * * * adjoining and communicating with the main building and forming part of the Hill School. ' These policies contained the following provisions:

'Privilege to make additions, alterations and repairs, and this insurance shall cover the same; to use oil, gas and electricity for lighting purposes.'

'Other insurance permitted.' (This is inserted by means of a rubber stamp.)

'It is provided that if at the time of fire the whole amount of insurance on the property covered by this policy shall be less than eighty per cent. of the actual cash value thereof, this company shall, in case of loss or damage, be liable for only such portion of such loss or damage as the amount insured by this policy shall bear to the said eighty per cent. of actual cash value of such property.'

'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. * * * '

'This entire policy, unless otherwise provided by agreement endorsed hereon or added hereto, shall be void if the insured now has or shall hereafter make or procure any other contract of insurance, whether valid or not, on property covered in whole or in part by this policy. ' (This clause is printed in the body of the policy.)

'No officer, agent, or other representative of this company shall have power to waive any provision or condition of this policy except such as by the terms of this policy may be the subject of agreement endorsed hereon or added hereto, and as to such provisions and conditions, no officer, agent, or representative shall have such power or be deemed or held to have waived such conditions unless such waiver, if any, shall be written upon or attached hereto, nor shall any privilege or permission affecting the insurance under this policy exist or be claimed by the insured unless so written or attached.'

Both classes of policies are made part of this finding with the same effect as if they had been set out in full.

(3) On December 29, 1901, a disastrous fire occurred at the school, and the losses suffered by the plaintiff were adjusted at the following sums:

Loss on east wind building (the addition)......................... $26,668.50

Loss on contents in east wing (this includes a loss of $4,500 on

students' clothes)................................................ 13,250.00

Loss on building other than east wing ............................... 1,815.65

Loss on contents in building other than east wing ................... 2,332.30

(4) At the trial the defendant waived any defense under the printed clause in its policy providing against other insurance without its consent.

(5) Mr. Shaner, the agent by whom Class B policies were placed, knew that there was existing insurance on the main building. He was so informed by the plaintiff, but the amount of the existing policies was not stated, and the contents and terms of the Class A policies were not definitely made known to him. In the application for the $67,500 insurance, the inquiry, 'What other insurance, and in what companies?' was not answered. Both the plaintiff and Mr. Shaner treated the insurance of $67,500 as specific insurance on the east wing and its contents, and the agent, when he wrote the policies, supposed that the Class A. policies did not cover the east wing. The plaintiff also notified Mr. Coleman, the agent who placed the Class A policies, that he was about to take out specific insurance on the addition, and inquired whether such insurance would require any indorsement upon the Class A policies. Mr. Coleman informed the plaintiff that indorsement was unnecessary, as the Class A policies themselves granted the privilege to make additions and to take out other insurance.

The following answers to the defendant's requests for finding of law also answer the plaintiff's requests, and therefore these need not be specifically set out: (1) The east wing was an addition, within the meaning of that word as used in the Class A policies under the privilege granted to make additions, alterations, and repairs, and therefore, as soon as the east wing was built, these policies covered the wing and its contents.

(2) To build the addition was a privilege, but to have it covered by the Class A policies when built was a right, and this (in the absence of an agreement to the contrary) gave to the specific policies, when written, a clear right to hold the Class A policies for contribution to the loss on the east wing and to its contents other than pupils' clothing.

(3) The contract as contained in the Class A policies was never discharged, altered, or amended by any subsequent agreement, and these policies must therefore contribute their pro rata share to the loss on the east wing and on its contents other than pupils' clothing.

(4) The policy sued on contains the entire and the only contract between the defendant and the plaintiff, and each of the Class A policies contains the entire and the only contract between the plaintiff and the companies issuing these policies respectively. The conversations between Mr. Shaner and the plaintiff and between Mr. Coleman and the plaintiff are not relevant to any issue raised in this case.

(5) Mr. Shaner had no authority to waive by conduct, or by any oral statement, the pro rata contribution clause in the defendant's policy; and Mr. Coleman had no authority to alter or abandon by contract or by oral declarations any part of the contract contained in the Class A policies.

In the foregoing answers I have decided the principal question in the case, namely, whether the Class A policies are bound to bear part of the loss upon the east wing and its contents other than pupils' clothing. A few words may be added to state my reasons for so deciding. The Supreme Court of Pennsylvania has had the same question before it recently in a suit growing out of this very loss that was tried in a state court, and has come to the opposite conclusion. Meigs v. Ins. Co., 205 Pa. 378, 54 A. 1053, Chief Justice Mitchell dissenting. The decision follows the view concerning double insurance that prevails in this state, the rule being thus expressed in the opinion of the court.

'When two policies insure the...