Washington Fire Ins. Co. v. Davison

• Decision Date: 21 January 1869
• Citation: 30 Md. 91
• Parties: THE WASHINGTON FIRE INSURANCE COMPANY v. WM. DAVISON AND WM. STUART SYMINGTON.
• Court: Maryland Court of Appeals

30 Md. 91

THE WASHINGTON FIRE INSURANCE COMPANY v. WM. DAVISON AND WM. STUART SYMINGTON.

Court of Appeals of Maryland

Jan. 21, 1869

APPEAL from the Superior Court of Baltimore City.

The Policy of Insurance on which this suit was brought, was issued on the 16th of June, 1866, by reason of a verbal application made by Davison, one of the appellees, to the appellant. The fire took place on the 27th of January, 1867. A similar insurance was effected in the Maryland Insurance Company by the appellant, for its own convenience, and without the request of the appellees. As first prepared the two policies contained a clause of insurance on $3,500 on stock, and $225 on machinery, including chemical apparatus contained in the factory building. When, on receiving the policies, it was discovered by the appellant, Symington, that they thus only covered stock, machinery, &c. contained in the factory, which was not in accordance with the application made and accepted, he, with his brother, one of the firm, and since deceased, agreed that the phraseology must be altered and they so procured it to be. The policies were accordingly changed, so as to read "contained in and out of the factory building and connected therewith,"--the words "and out of" and "and connected therewith" being added. This alteration was made on the policy issued by the appellant, in the handwriting of a clerk of the appellant. The appellant proved that this clerk had no authority to contract for insurance, or to modify, in any way, the Company's contracts. But it was in evidence that the policy in the record book of the appellant containing a transcript of the policy was altered by the same clerk, duly to conform to the alteration in the policy itself, and evidence was further given tending to show that Mr. McGinnis the appellant's secretary, was cognizant of the alteration, and caused the Maryland Company to alter its policy in the same manner to conform. It was further proven that the premium was not paid to either Company till the alterations were made as stated.

The premises in question comprised, when the insurance was made a large building or chamber for the manufacture of acid which is designated as No. 1, and was then complete, and a second chamber, No. 2, parallel with No. 1, at the distance of about twenty-two feet, and in process of erection. Between the two were a furnace, a still, and other apparatus, more or less near to completion, together with a quantity of sulphur and nitrate of soda, articles used in the manufacture of sulphuric acid. Two other chambers like Nos. 1 and 2, and to the north of them, were contemplated at the time of insurance. No. 3, to the north of No. 1, was commenced in November, 1866, and required only a few courses of shingles to be finished when the fire took place. The secretary of the appellant, with the secretary of the Maryland Company, inspected the premises before the risk was taken. There was the most direct conflict of testimony as to the condition of the premises when the inspection took place. Evidence, however, was given by the appellees, tending to prove not only that actual and ample notice was given and explanation made of the mode in which the factory was to be completed and conducted, but that things were in such a condition, when the inspection was made, as to give notice of themselves to any person competent to inspect such an establishment.

On the other hand the denial of all this, on the part of the secretaries of the insurance companies, McGinnis and Milnor, was explicit. The conflict of testimony was marked, as to a shed erected between Nos. 1 and 2 after the insurance was made. The appellees gave evidence tending to show, not only that the appellant had direct notice that this shed was contemplated, but that the shed itself was partly begun when the premises were inspected, and further, that such a shed was necessary, proper and usual to cover the machinery between the chambers, and ought to have been known to the inspectors to be so. The fact of notice, as to the shed, as well as that of its having been begun when the premises were inspected, was denied by the appellant's witnesses. The fire began on this shed.

Six exceptions were taken at the trial below, by the defendant; five were to rulings upon questions of evidence; the sixth was to the action of the Court in granting the prayers of the plaintiffs and refusing those of the defendant. They will be found presented with sufficient fulness in the opinion of the Court, where they have been considered in detail. The verdict and judgment being for the plaintiffs, the defendant appealed.

The cause was argued before BARTOL, C.J., NELSON, STEWART, MILLER and ROBINSON, J.

William F. Frick, for the appellant:

The term "carpenters" employed in the 17th clause of the policy sued on, was not ambiguous. Not being included in section 2, referring to trades, but in section 3, referring to risks, it obviously referred not to the carrying on of the trade of a carpenter, on the premises, but to the risk of carpenters' work and employment thereon.

If ambiguous, the defendant was entitled to explain it by evidence of the particular usage and understanding of its office, in reference to the term, as binding on all persons who dealt with the company. 1 Greenl. on Ev., secs. 292, 295; Mills vs. Bank of the U. S., 11 Wheat., 438, 439; Fowler vs. Ohio Ins. Co., 7 Wendell, 273; Daniel vs. Hudson River Ins. Co., 12 Cushing, 429.

If on the true construction of the policy, it was avoided, by the employment of carpenters without notice to the company, in making alterations and additions to insured premises, of such a character as to increase materially the risk of fire, the defendant had a right to go into proof of the character of the additions made to No. 1, and the nature and extent of the carpenters' work thereon, without showing that the fire was actually caused thereby.

The defendant's first prayer presented the true question of fact and law fairly--that the defendant was bound, provided the erection of the shed was contemplated by the plaintiffs, and such intention was known to the defendant at the time the insurance was effected. Instead of granting this instruction the Court granted the prayers of the plaintiffs, all proceeding upon the theory that it was proper and necessary to cover the apparatus, &c. that the defendant was bound to know that fact; that it was responsible for the ignorance of its examiners, &c., and that if they found "that the shed would be necessary and proper to cover the apparatus," &c. that the erection of such shed was no defence, &c.

The error in refusing the defendant's prayer and granting those of the plaintiffs instead, was that the evidence did not justify the putting it to the jury, as the true issue of fact in the case, to find whether the covering of the apparatus by a shed was proper and necessary. The instructions proceeded upon a plain misconstruction of the evidence; and did not present the true point distinctly to the jury.

The defendant's sixth prayer grouped together fully all the facts in the case touching additional sheds and buildings, and after requiring the jury to find that by reason of such erections, the risk of fire was materially increased, and all the buildings were consumed, put it to them to say whether "the erection of such additional buildings, in the manner described by the witnesses, was necessary and proper to the uses of the buildings insured," &c., this instruction should have been granted, as presenting the true issue of fact in the case, on these points.

The second prayer of the defendant raised an entirely different question. It was conceded that there was a violation of two distinct conditions of the policy: 1st. That in the body of the policy requiring written consent to any previous or subsequent insurance of the same property. 2d. That in section IV, requiring endorsed notice of all changes that may be made in additional insurances. The instruction was intended to cover both--as working together a forfeiture of the rights of the insured under the policy.

To this it was answered, that as the defendant knew of the policy in the Maryland office, it was bound to endorse it, and is equitably estopped from setting up the condition broken.

The evidence ought to be clear and unquestionable, that when the defendant issued its policy, it knew that the Maryland Company had issued or would issue one also on the same property, and this defence, if made out, can only avail in a Court of Equity. Carpenter vs. Prov. Ins. Co., 16 Peters, 497, 510; Barrett vs. Union Trust Ins. Co., 7 Cush., 181; Forbes vs. Agawan Ins. Co., 9 Cush., 473; Pinder vs. Mutual Ins. Co., 12 Cush., 471; Conway Tool Co. vs. Hudson River Ins. Co., 11 Cush., 267, 268; Hutchinson vs. West Ins. Co., 21 Missouri, 102, 103; Hale vs. Mechanics' Mutual Ins. Co., 6 Gray, 723; Simpson vs. Penn Ins. Co., 38 Penn. State Rep., 250; National Fire Ins. Co. vs. Crane, 16 Md., 260.

Even if it could be used in a Court of Law, it could not apply to the alleged violation of section IV; because it was clear that the defendant had no knowledge of the alteration in the Maryland policy by which the subject matter of the insurance was increased: and assuming that the alteration in the Maryland was valid, (which it was,) and that in the Washington was unauthorized, (which it clearly was,) the relations of contribution between the companies, by means of the unnotified alteration, were substantially changed. 1 Smith's Lead. Cases, Part II, 790, 791.

The defendant's third prayer ought to have been granted, as there was evidence sufficient to justify the instruction. 1 Smith's Lead. Cases, Part II, 791; Tate vs Mutual Fire Ins. Co., 13 Gray, 8...