83 Md. 63 | Md. | 1896
délivered the opinion of the Court.
The Mutual Fire Insurance Company, of Harford County ■issued a policy of insurance against loss by fire to Mr. I. Thomas C. Hopkins in March, eighteen hundred and ninety-three. The insured premises were subsequently purchased by the appellant, Sweeting, and Mr. Hopkins assigned the policy to him. In October, eighteen hundred and ninety-four, additional insurance .was granted by ..the same underwriter to the appellant upon the same premises. .‘Amongst 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 01-individual, or otherwise, such insurance or insurances must be made known to this company and endorsed on the policy ■or otherwise acknowledged in writing, or otherwise the .policy of this company shall be void.” In November, eighteen hundred and ninety-four, 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, Pennsylvania. 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 the company.” It is further stipulated that “ said company shall in no case be deemed to have
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 endorsed 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 was 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 can-celled, 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
If such insurance, valid or invalid, does exist, then, by the explicit terms of the contract, the second policy is void and not merely voidable. Such is the distinct agreement of the parties themselves, and such is the character or status which they themselves have given to the second policy. To ascribe to the second policy, which the parties, in direct terms, declare shall be void if prior undisclosed insurance exists, the effect of annulling an antecedent policy not only ignores the agreement that stamps it as invalid, but involves the incongruity of treating the second policy as, at one and the same time, a subsisting, binding contract for the purpose of avoiding the first policy, and a nugatory policy in respect
. The leading case relied on to support the opposite doctrine is Carpenter v. Providence Ins. Co., 16 Pet. 495. In commenting on this case, Judge Dillon, in Allison v. Phœnix Ins. Co., 3 Dillon, 484, remarks: “ The general, but not uniform, opinion of Courts is that, to avoid the first policy, the second policy must be valid, that it must constitute an effective insurance, and we are inclined so to hold, if this can be done consistently with Carpenter v. Providence Ins. Co., 16 Pet. 495. The case last cited has been subjected to much criticism (see Clark v. New Eng. & Ins. Co., 6 Cush. 342 ; Hubbard v. Hartford F. Ins. Co., 33 Iowa, 325 ; May on Insurance, sec. 365, and the . authorities there collected), and it may be conceded that, though not unsupported, it does not, at least in its reasoning, accord with the prevailing view. That case holds that the company which issued the second policy (the Providence Company) was entitled to notice of the prior insurance in the American Company, though the policy in that company had been ‘ procured by misrepresentation of material facts ’ and the reason given (which has been criticised and its soundness denied) is, that such a policy is ‘ not to' be treated in the sense of the law, as utterly void ab initio, but merely voidable and as one that may be avoided by the underwriters upon the proof of the facts, but "until so avoided to be treated for all practical purposes as a subsisting policy.’” Carpenter’s case was decided by the Supreme Court in 1842, and the opinion of the Court was delivered by Mr. Justice Story. Carpenter was denied a recover}' on the Providence policy—the second in order of time—because when it was issued the insured held a prior policy in the American company, which fact was not communicated to the second underwriter, and it was insisted that under the condition in
But it is insisted that by a second policy on the same property, effected without notice to, or the assent of, the first underwriter, the insurer may believe he has obtained an over-insurance whereby the temptation to carelessness, if not to incendiarism, on his part, will be greatly in
Nor is there any substance in the objection that an inquiry into the validity of the second policy in a suit on the first one opens up an investigation of a contract between other parties which is wholly collateral to the issue on trial. The first policy is valid unless the defendant establishes its invalidity by reason of some breach of a material condition and the burden is on the defendant to show that there is a second insurance which invalidates the first, that is, that there is a second valid insurance. Hence the validity of such second policy is in the very nature of the case essen
By the terms of the York Company’s policy no waiver of any of its conditions can be shown unless' such waiver was endorsed in writing on the policy. Confessedly there was no waiver of any kind written thereon. Upon its face then it contained an unwaived and effective condition avoiding it for prior undisclosed insurance in some other company. The prior insurance was shown—the policy securing it was the cause of action in the suit on trial—and the second policy was consequently void. Being void it created no other insurance at all and therefore did not impair the validity of the first policy.
It results from the views we have expressed that there was error in the ruling which granted the defendant’s prayers and rejected those of the plaintiff. Because of this error the judgment must be reversed and a new trial must be awarded.
Judgment reversed with costs above and below and new trial awarded.