Westchester Fire Ins. Co. v. Weaver

• Decision Date: 16 April 1889
• Citation: 17 A. 401,70 Md. 536
• Parties: WESTCHESTER FIRE INS. CO. OF NEW YORK v. WEAVER.
• Court: Maryland Court of Appeals

17 A. 401

70 Md. 536

WESTCHESTER FIRE INS. CO. OF NEW YORK v. WEAVER.

Court of Appeals of Maryland

April 16, 1889

Appeal from superior court of Baltimore city.

Action by Jacob B. Weaver, use of George D. Insley, against the Westchester Fire Insurance Company of New York. Defendant appeals.

Argued before MILLER, BRYAN, IRVING, MCSHERRY, ROBINSON, and STONE JJ.

Benjamin Kurtz, for appellant.

John H. Handy, for appellee.

STONE J.

This is an action brought on a policy of insurance against loss by fire. The loss was duly proved, but the company, among others, set up the defense that the property, which was exclusively personal, was covered by a mortgage. The policy contained a covenant that the policy should become void unless consent in writing should be indorsed on the policy by the company in the following instance: "If the assured is not the sole and unconditional owner of the property, * * * or if the interest of the assured in the property, whether as owner, trustee, consignee, factor, agent, mortgagee lessee, or otherwise is not truly stated in this policy." The company contends that, as no disclosure was made to the company that the property was incumbered by a mortgage, and no written consent indorsed on the policy that it was insured although mortgaged, by the terms of the policy the company is not liable. There is no doubt that, if the only condition in the policy was that the assured was the "sole and unconditional owner of the property," the policy would not be held void, if it turned out that it was incumbered by a mortgage. This point is clearly covered by the decisions in Kelly's Case, 32 Md. 421, and the case of Insurance Co. v. Beck, 43 Md. 358; and the question that we have to decide is whether the additional words used in this policy, to-wit, "if the interest of the assured in the property, whether as owner, trustee, consignee, factor, agent, mortgagee, lessee, or otherwise, is not truly stated in this policy," will apply to the case of a mortgagor. In the warranty of the assured he stated that he has not "omitted to state to this company any information material to the risk." Contracts of insurance, as this court said in Kelly's Case, are to be construed as other contracts. The law presumes that the parties understand the contract they make, and every intelligible condition was inserted by design, and was intended to accomplish some purpose. The court also repudiates the principle of interpretation adopted in some cases, that such contracts are to be construed most strongly against the underwriter, but adopts the sounder rule that the intention of the parties, as gathered from the whole instrument, must prevail. The terms of this policy are more comprehensive than the terms used in either Kelly's Case, or the case in 43 Md. After reciting that if the assured is not the sole and unconditional owner of the property, or if the interest of the assured, whether as owner, agent, etc., or otherwise, is not truly stated, it provides that the policy shall be void. All these qualified interests in property are insurable. But it is important to the company that a full and true disclosure of the condition of the property should be made, as upon it the amount of the risk and the premium may depend. In Bowman's Case, 40 Md. 631, the court uses this language: "If the property to be insured is incumbered by judgments, mortgages, or liens for unpaid purchase money, it is always of importance for the insurance company to be informed of the fact, as upon the existence or non-existence of real interest and motive on the part of the insured to protect and preserve the property the...