Fire Insurance — Question as to Whether Certain Property was Intended to be Covered by a Policy — Evidence — What is Prior Insurance — Waiver of Preliminary Proof of Loss.
The question whether a policy of fire insurance was or was not designed, when it was obtained, to cover certain property subsequently destroyed by fire and covered by other policies as well, is a question of fact, and in determining it the admissions of the assured as to his purpose in obtaining the policy are competent evidence.
In May, 1898, thirty-six hogsheads of tobacco, situated in the warehouse of the Baltimore Steam Packet Company, and belonging to the plaintiff, were destroyed by fire. This tobacco had been shipped from North Carolina to the plaintiff in Baltimore, and was designed for immediate further shipment by rail to Tacoma, and thence by steamer to Kobe, Japan. At the time of the loss plaintiff held two policies of fire insurance, (1) a policy of $1,000 issued in March, 1898, by the defendant company "on tobacco and tobacco stems * * contained in the warehouse of the Baltimore Steam Packet Company;" (2) a policy in the N.A. Insurance Company on 100 hogsheads of tobacco (including the 36 destroyed) from N.C. to Tacoma and thence by steamer to Kobe. This latter insurance was effected by making an entry, according to the course of dealing between the parties, in the policy-book of the plaintiff with the company under an open policy of marine insurance, which when originally made in 1880, covered shipments from ports in Virginia to Baltimore and to New York. This policy contained the American clause providing that in the case of prior insurance the company should be answerable only for so much as such prior insurance may be deficient towards fully covering the property insured. After the fire, the entire amount of the loss was paid by the N.A. Company to the plaintiff, but when this company discovered the existence of the policy made by defendant it claimed that it was liable only for a proportionate part of the loss. Plaintiff thereupon returned the amount so claimed to have been overpaid to that company and brought this action against defendant. The defenses were that the tobacco destroyed was not insured under defendant's policy; that the loss had been fully paid and that the plaintiff had failed to furnish the required preliminary proof of loss. Defendant had not insisted upon the proof of loss required by its policy but had denied its liability upon the ground that its policy did not cover this loss. Held,
1st. That evidence of plaintiff's admissions made shortly after the fire that when he obtained the policy in the defendant company it was not his intention to insure the tobacco destroyed, is admissible; and if it be found as a fact from all the evidence in the case that the defendant's policy was not designed to cover this tobacco, then defendant is not liable in this action, but it was error to rule as matter of law that the tobacco in question was not covered by defendant's policy.
2nd. That the defendant's policy was prior insurance to that in the N.A. Company, the entry in the policy-book of the latter company constituting a new contract subject to the terms of the original policy of 1880.
3rd. That if the defendant based its refusal to pay plaintiff's claim for the loss upon other grounds than plaintiff's failure to furnish the proof of loss required by the policy, then such preliminary proofs are waived.
BRISCOE, J., delivered the opinion of the Court.
This is a suit brought in the Superior Court of Baltimore City by Alexander T. Leftwich, surviving partner of Ricards, Leftwich Company, of Baltimore City, against the Royal Insurance Company of Liverpool, a corporation doing business in the State of Maryland, upon a policy of fire insurance to recover for the loss of thirty-six hogsheads of tobacco, while stored in the warehouse of the Baltimore Steam Packet Company, at the foot of Union Dock, Baltimore. The tobacco was received at the warehouse on or about the 13th of May, 1898, and remained in storage until the 17th day of same month, when the warehouse and tobacco were entirely destroyed by fire. The tobacco had been shipped and consigned to the appellants from North Carolina, under three bills of lading, and was intended for shipment to Kobe, Japan.
The declaration states that on or about the 28th day of March, 1898, the Royal Insurance Company of Liverpool, for good and lawful consideration, executed a policy of insurance in favor of the plaintiffs covenanting and agreeing to insure and indemnify the plaintiffs up to an amount not exceeding $1,000, against all direct loss or damage by fire to goods and merchandise while contained in the said warehouse of the Baltimore Steam Packet Company, or on a wharf, street, or pavement during process of storage or delivery, subject to certain exceptions and conditions in said policy expressed, and subject to an abatement in case of other insurance upon the same property in the proportion which the amount of its policy bears to the whole amount of insurance on said property; that the said property was insured in an additional amount of four thousand five hundred dollars ($4,500) in the Insurance Company of North America.
The provisions of this policy (New York Standard form) relating to the property destroyed by fire are in these words: "Royal Insurance Company of Liverpool in consideration of the stipulations herein named and of fourteen and 3-100 dollars premium, does insure Messrs. Ricards, Leftwich Company for the term of time from the 28th day of March, 1898, at noon, to the 28th day of October, 1898, at noon, against all direct loss or damage by fire, except as hereinafter provided. To an amount not exceeding one thousand dollars, to the following described property while located and contained as described herein, and not elsewhere, to wit: On tobacco and tobacco stems and packages for and containing the same, their own or held by them in trust or on consignment or sold but not removed, contained in the frame warehouse of the Baltimore Steam Packet Company, situate foot of Union dock, Baltimore, Md. To cover also on wharf, street or pavement, during process of storage or delivery. Other insurance permitted without notice until required."
By the terms of the policy the proofs of loss were required to be furnished the company within sixty days after the fire. And there was a further stipulation that the company shall not be held to have waived any provision or condition of this policy or any forfeiture thereof by any requirement, act or proceeding on its part relating to the appraisal or to any examination herein provided for; and the loss shall not become payable until after the notice, ascertainment, estimate and satisfactory proof of the loss herein required have been received by this company, including an award by appraisers when appraisal has been required.
The appellants also held open marine insurance in the Insurance Company of North America, dated the 9th of May, 1898, to cover about 100 hogsheads of tobacco, including the 36 hogsheads destroyed by fire, to be shipped from North Carolina to Kobe, Japan.
There was no policy issued to cover this tobacco, but, according to a course of dealing between the appellant and the company, the tobacco was insured upon the same terms as those contained in a policy of marine insurance previously issued by the company to the appellants. The original policy was dated October 22d 1879, and was to cover shipments of tobacco on board of "vessels and steamers at and from Richmond and Norfolk, Virginia, and other ports and places to Baltimore." The policy was not to continue in force longer than one year, unless by agreement, but by a subsequent endorsement on this policy on the 1st of July, 1880, it was extended to cover shipments to New York, as well as Baltimore.
It also contained what is known as the "American Clause," providing that if the said assured shall have made any other assurance upon the premises aforesaid, prior in date to this policy, then this insurance company shall be answerable only for so much of the amount as such prior insurance may be sufficient towards fully covering the premises hereby insured, without any deduction for the insolvency of all or any of the underwriters, and shall return the premium upon so much of the sum by them insured as they shall be by such prior insurance exonerated from. And in case of any insurance upon the said premises, subsequent in date to this policy, this insurance company shall nevertheless be answerable for the full extent of the sum by them subscribed hereto, without right to claim contribution from such subsequent assurers, and shall accordingly be entitled to retain the premium by them received, and in the same manner as if no such subsequent assurance had been made.
On the 4th of June, 1898, the full amount of the loss, $4,500, was paid by the Insurance Company of North America to the appellants, but subsequently the sum of $818.18 was repaid, and this suit is brought to recover from the defendant below, the amount alleged to be due under its policy.
At the trial there were five exceptions reserved; four of these relate to the admissibility of evidence and the fifth presents the rulings of the Court upon the appellant's first, second and fourth prayers, and the appellee's fifth and seventh prayers.
As all the questions necessary to the determination of this case are presented by these exceptions, we will pass on them as they arise. The first exception was abandoned at the hearing and will not be considered. The second, third and fourth exceptions will be considered together, as they practically present the same question, and that is, briefly stated, whether certain admissions made by the appellant Leftwich after the fire, to Mr. Howie, a general adjuster of insurance, were admissible evidence tending to show that the tobacco destroyed by fire was not covered by the contract of insurance, with the Royal Insurance Company.
The evidence objected to and contained in these exceptions is as follows: "That in his (Mr. Howie's) interview with Mr. Leftwich, Mr. Leftwich had said it was not his intention when he took out the Royal policy to cover under that policy, but if there had been no other insurance on the tobacco he would have claimed from the Royal and they would probably have paid it."
This evidence, we think, was admissible upon the question of identity of the risk covered by the policy. Citizens' Fire Insurance Co. v. Doll, 35 Md. 107; Railroad Company v. Trimble, 10 Wall. 367; Fogg v. Mutual Insurance Co., 10 Cush. 337. The language of the policy issued by the appellee, is that it is upon tobacco and tobacco stems and packages, and one of the questions for the Court, sitting as a jury, was to determine whether the tobacco destroyed by the fire was covered by this policy. The declaration of the plaintiff himself, made after the fire, that he did not intend to insure this tobacco in defendant's company was admissible evidence, in connection with the other facts of the case, to be submitted, under instructions from the Court. In Augusta Insurance Co. v. Abbott, 12 Md. 373, it is distinctly said, whether the policy in question was or was not designed, when obtained to cover the particular cargo of the appellee was a proper question for the jury to determine from the evidence. And in Farmers' Mutual Insurance Co. v. Engle, 52 Md. 479, it is said: "So, looking to the face of the policy and the nature of the business in which the plaintiffs were engaged, it is doubtful, to say the least, whether they intended to insure goods held by them on commission, and for the loss of which they were not responsible. But the doubt, if any there be, is entirely removed by the letter written by the plaintiffs to the insurance company after the loss, in which, after stating that the owners of the fertilizers insist that their fertilizers are covered by the policy, the plaintiffs say `we do not think so.' Here, then, is written admission by the plaintiffs after the loss, that they did not intend to insure the fertilizers held by them for sale on commission, and now, in the face of this admission, they ask a Court to say, that they did mean to insure such fertilizers."
The remaining questions arise upon rulings of the Court on the prayers. The plaintiff's first prayer raised the question as to whether the contract of insurance between the appellants and the Insurance Company of North America, dated as of the entry in the pass-book on the 9th of May, 1898, or the acceptance of the risk must be considered, as of the date of the original policy issued in October, 1879. This question, we think, is determined by the fact that by the original policy the voyage insured was stated to be between North Carolina and New York, whereas, the entry in the book on May, 1898, was made to cover points from North Carolina to Baltimore, thence to Tacoma, and thence to Kobe, Japan, another and different voyage. The acceptance of the risk by the entry of May, 1898, made a new and distinct contract, but subject to the terms and stipulations contained in the original policy. We find no error in the ruling of the Court upon this prayer. Commonwealth Ins. Co. v. Cropper, 21 Md. 318; Schaefer v. Marine Insurance Co., 33 Md. 109.
The plaintiff's second prayer was properly rejected; the law on this branch of the case was fully covered by the plaintiff's first prayer. There was no error in the rejection of the plaintiff's fourth prayer; it was defective in omitting facts proper to be included in it. It was bad both in substance and form.
The defendant's fifth prayer is in these words: "The defendant prays the Court to rule as matter of law that the tobacco shipped from North Carolina under the bills of lading offered in evidence and located on the Bay Line wharf in Baltimore, Maryland, at the time of the fire of May 17th, 1898, is not covered by the policy in suit and no loss thereto by said fire can be recovered in this action." This prayer was clearly erroneous, because the question whether or not the policy in suit covered the property destroyed by fire on the 17th of May, 1898, was a question of fact under all the evidence to be found by the Court sitting as a jury, and not a matter of law, as stated by the prayer. While the rule is, as stated by this Court in Roberts Co. v. Bonaparte, 73 Md. 199, that the construction of all written documents is a question of law for the Court, and when a contract is sought to be made out from such documents alone, it is for the Court to ascertain and determine its construction. But when, as in this case, the evidence does not depend entirely upon a written contract, but upon other facts, it is a question for the jury and not for the Court.
The seventh prayer of the defendant related to the question of waiver, and was granted in connection with the plaintiff's third prayer. It correctly stated the law upon this subject, as announced by this Court in the case of McElroy v. Hancock Life Ins. Co., 88 Md. 148. It ruled as a matter of law that if the Court found there had been no waiver by the defendant of the filing of preliminary proofs of loss within sixty days after the fire as required by the policy in suit, and that the proofs offered in evidence were not filed until more than sixty days after the fire, the verdict must be for the defendant.
For the error in granting the defendant's fifth prayer the judgment will be reversed and a new trial awarded.
Judgment reversed and a new trial awarded with costs.
(Decided June 16th, 1900.)