Sweeting v. Mutual Fire Ins. Co. in Hartford County
| Decision Date | 25 March 1896 |
| Citation | 34 A. 826,83 Md. 63 |
| Parties | SWEETING ET AL. v. MUTUAL FIRE INS. CO. IN HARFORD COUNTY. |
| Court | Maryland Court of Appeals |
Appeal from circuit court, Harford county.
Action by Charles W. Sweeting and another against the Mutual Fire Insurance Company in Harford County on a fire policy. From a judgment for defendant, plaintiffs appeal. Reversed.
Argued before McSHERRY, C.J., and ROBERTS, FOWLER, BOYD, PAGE RUSSUM, and BRISCOE, JJ.
J Thos. C. Hopkins, H. J. Jewett, Jr., and S. A. Williams, for appellants.
Geo. L Van Bibber, for appellee.
The Mutual Fire Insurance Company in Harford County issued a policy of insurance against loss by fire to Mr. J. Thomas C Hopkins in March, 1893. The insured premises were subsequently purchased by the appellant Sweeting, and Mr. Hopkins assigned the policy to him. In October, 1894, additional insurance was granted by the same underwriter to the appellant, upon the same premises. Among the terms and conditions annexed to, and forming a part of, the policy, was the following: "If any property insured by this company shall be already insured, or shall be hereafter insured, by any other company or companies or individual, or otherwise, such insurance or insurances must be made known to this company, and indorsed on the policy, or otherwise acknowledged in writing, or otherwise the policy of this company shall be void." In November, 1894, the appellant, without giving notice to, or obtaining the consent of, the Harford Insurance Company, and without disclosing to the second insurer the existence of the first policy, procured a policy, for the same amount of insurance, on the same property, from the Farmers' Fire Insurance Company of York, Pa. In the policy issued by this last-named company, it is provided and declared "that this company shall not be liable * * * for loss if there is other prior or subsequent insurance, whether valid or otherwise, without the written consent of this company." It is further stipulated that "said company shall in no case be deemed to have waived a full, literal, and strict compliance with, and performance of, each and every of the terms, provisions, conditions, and stipulations in this policy contained, and hereto annexed, to be performed and preserved by and on the part of the insured, * * * unless such waiver be expressed and manifested in writing under the signatures of the president and secretary of said company." On March 11, 1895, the dwelling house described in and covered by both the policies was destroyed by fire, and both of the underwriters refused to pay the loss,--the Harford Company because its policy was avoided, according to its contention, by the subsequent insurance procured without its consent, and the York Company because the omission of the assured to disclose the fact that he held a policy on the same property in the Harford Company invalidated the policy of the York Company, issued in ignorance of the antecedent outstanding insurance in the Harford Company. Subsequently this suit was brought against the Harford Company to recover on the policy issued by it, that policy being the first in date and delivery. Upon the trial of the cause one exception was reserved which brings up for review the rulings of the trial court upon the prayers for instructions to the jury. The verdict and judgment were entered for the defendant, the Harford Company, and the plaintiffs have appealed.
All of the plaintiffs' prayers were rejected, and all of the defendant's were granted. Together they present but a single question; and that question, though one of much interest and importance, has not heretofore been raised in this court for decision. It is this: Does the fact that a subsequent policy was procured without the consent of the first underwriter avoid the first policy, under the above-quoted conditions contained therein, against other insurance, when the second policy explicitly declares that the company which issued it shall not be liable for loss if there is other prior insurance, whether valid or not, held on the same property, without the written consent of the second insurer? There is a wide diversity of opinion on this question in the various courts of this country. The doctrine laid down by the highest tribunals of Massachusetts Pennsylvania, and other states is that the subsequent insurance being invalid at the time of loss, by reason of the breach of condition therein, the prior insurance is good, and the first underwriter is liable on the policy issued by it. Thomas v. Insurance Co., 119 Mass. 121; Allison v. Insurance Co., 3 Dill. 480, Fed. Cas. No. 252; Insurance Co. v. Holt, 35 Ohio St. 189; Knight v. Insurance Co., 26 Ohio St. 664; Stacey v. Insurance Co., 2 Watts & S. 506; Jackson v. Insurance Co., 23 Pick. 418; Clark v. Insurance Co., 6 Cush. 342; Hardy v. Insurance Co., 4 Allen, 217; Philbrook v. Insurance Co., 37 Me. 137; Lindley v. Insurance Co., 65 Me. 368; Gale v. Insurance Co., 41 N.H. 170; Gee v. Insurance Co., 55 N.H. 65; Insurance Co. v. Nichol, 35 N. J. Eq. 291; Schenck v. Insurance Co., 24 N. J. Law, 447; Insurance Co. v. Slaughter, 20 Ind. 520; May, Ins. § 364. On the other hand, it has been held elsewhere that a subsequent policy, whether legally enforceable or not, or whether voidable on its face, or voidable for extrinsic matter, works a forfeiture of the prior policy. Carpenter v. Insurance Co., 16 Pet. 495; Allen v. Insurance Co., 30 La. Ann. 1386; Somerfield v. Insurance Co., 8 Lea, 547; Funke v. Association, 29 Minn. 347, 13 N.W. 164; Lackey v. Insurance Co., 42 Ga. 456; Bigler v. Insurance Co., 22 N.Y. 402; May, Ins. § 364. There is still an intermediate view, taken by the supreme court of Iowa in the case of Hubbard v. Insurance Co., 33 Iowa, 325, to the effect that the question of the validity of the prior policy turns upon whether the subsequent policy has in fact been avoided. If the second policy is recognized by the insurer issuing it to be a valid policy, any breach of condition being waived, this makes it a valid insurance, and avoids the first policy; but, if the subsequent policy has been rescinded for condition broken, there is no other insurance, so as to invalidate the prior policy. The obvious and insuperable objection to this latter view lies in the fact that it makes the validity of the contract between the parties under the first policy depend, not upon their own agreement, nor the effect of that agreement, nor upon their own acts, nor the acts of either of them, but upon what another person (the second underwriter), a stranger to the first contract, may voluntarily do with respect to affirming or repudiating a totally different and distinct contract of insurance, without the slightest reference to any judicial inquiry as to the validity or invalidity of the second policy, or its resultant legal effect upon the first. Now, as the parties to the first policy of insurance have, by the unequivocal terms employed in their contract, declared that, if the property insured should be thereafter insured by any other company, the first policy should be void, unless the second insurance were made known to the first insurer, and were indorsed on the policy written by it, or were otherwise acknowledged and assented to by it in writing, and as the manifest object and design of such a provision were to guard against the dangers supposed to be incident to a double or an over insurance, the natural and reasonable interpretation of this forfeiting condition would, aside from adjudged cases, seem to prohibit a second valid insurance, and not a mere ineffectual attempt to procure additional insurance. The two things are not identical. "Other insurance" does not mean a void policy, which obviously affords no insurance at all. Nor does it mean a policy which may, at the option of the underwriter, be canceled; for that is, at best, but conditional insurance. But it means a binding, available insurance,--one upon which the insured can rely for protection in case of loss, and which he can enforce by law, and which cannot be repudiated with impunity at the arbitrary election of the insurer. If the underwriter contemplated something else than a valid insurance under a second policy, it should have been expressed in plain and unambiguous language, as was done by the York Company. Upon the face of the latter's policy, it was expressly declared that the policy would be void if other insurance existed or were procured, even though the other insurance were itself invalid. And such a provision has been recognized as effectual. Insurance Co. v. Verdier, 35 Mich. 395; Bigler v. Insurance Co., 22 N.Y. 402. A second policy, which, by its own terms, is void for any cause, is not an insurance at all; and this is equally true whether the invalidity is apparent on the face of the policy itself, or is made to appear by evidence aliunde the policy. It is not the method by which the invalidity of the second policy may be shown that determines whether it does or does not create a liability on the part of the underwriter who issues it, and therefore does or does not constitute a breach of the condition in the first policy against further insurance; but it is the fact that the second policy is valid and binding that alone fixes upon its underwriter a liability, and accordingly determines whether, in this respect, the condition against other insurance set forth in the first policy has been violated or not. Hence the inquiry is not as to how the invalidity of the second policy may be shown, but as to whether it is invalid. The parties to it themselves stipulate in it that it shall be void if there exists, at the time of its issue, undisclosed insurance in some other company, whether that prior insurance be valid or not. If such...
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