Citizens' Mutual Fire Insurance v. Conowingo Bridge Co.

⁴³⁶ Briscoe, J., delivered the opinion of the Court. It appears fr«m the docket entries in this case that the suit was instituted in the Circuit Court for Cecil County on the 11th day of April, 1908, and upon suggestion of the plaintiff was on the 21st of September, 1908, removed to the Circuit Court for Baltimore County for trial. Subsequently, on the 8th of January, 1909, it was removed upon the suggestion of the defendant to the Court of Common Pleas of Baltimore City. On the 16th of January, 1909, a judgment by default for want of a plea was entered in favor of the plaintiff, but on the 22nd of July, 190J, this judgment was stricken out, with leave to the defendant to plead.

The trial resulted in a verdict in favor of the plaintiff, and the defendant has appealed. The declaration consists of a single count based on a policy of fire insurance, and this in substance charges that the defendant, the Citizens’ Mutual Eire Insurance Company of Cecil County, a body corporate, on the 28th day of March, 1907, by its policy of insurance issued as of that date and in consideration of the stipulation therein named and of the payment of one dollar and fifty cents as a premium promised and agreed with the Conowingo Bridge Company, a corporation, to insure it subject to the conditions therein named and during the period commencing on the 28th day of March, 1907, to the 10th day of February, 1912, to the extent of three thousand dollars ($3,000), against all direct loss or damage by fire on that part of main Conowingo Bridge across Susquehanna Biver located in Cecil County. The loss when it did occur the Insurance Company agreed subject to the terms of the policy to pay to the plaintiff within ninety days after due notice, ascertainment, estimate and satisfactory proof of loss was received. The declaration then avers that on the 5th day of June, 1907, and during the time prescribed in the policy, the bridge therein described and owned by the plaintiff was consumed and totally destroyed by fire, that forthwith the plaintiff did give notice thereof ⁴³⁷ to the defendant company and furnish the proof of loss required, and offered and tendered itself ready and willing to furnish such other proof as the defendant’s officers and agents should reasonably demand, and the plaintiff did thereupon demand of the defendant the payment of the amount for which it was insured under the policy, which demand the defendant has neglected and refused to pay and perform; that such fire - and such consequent loss were not such as wore by the policy of insurance excluded from its operation and effect, but Avere such as were reasonably and legitimately included within the provisions of the policy of insurance of the defendant, and that all times have elapsed and all things and conditions have happened and have been performed, Avhich, under the terms of the policy of insurance, wore necessary to have elapsed and to have been performed to entitle the plaintiff to the payment and to have and maintain this action.

The defendant rested its defense to the suit upon seven pleas. In addition to the general issue pleas in assumpsit and in debt, there were five special pleas to the declaration. The third and fourth pleas are not insisted upon, but it is contended that the Court below committed an error in sustaining the plaintiff’s demurrers to the fifth, sixth and seArenth pleas. The fifth plea alleged the failure of the plaintiff to comply with the condition of the policy requiring the furnishing of proofs of loss.

The sixth, averred a breach of the condition and proAdsion of the policy, in that, at the time of the issuing of the policy sued , on the interest of the plaintiff in the property was other than unconditional and sole OAvnership and the property insured was a building or bridge not OAvned by the plaintiff in fee simple. The seventh plea asserted that the policy under its terms had been forfeited and was AToid because at the time of its issue there was an outstanding mortgage on the property insured, the existence of which was not disclosed by the plaintiff to the defendant. ⁴³⁸ We have examined, the pleadings with care and find no reversible error in the rulings of the Court thereon, and the demurrers were properly sustained. They in effect amounted to the general issue plea, which had been filed in the case. The rule is well settled that all defenses are open under the general issue plea which show the plaintiff is- not entitled to recover.

Herrick v. Swomley, 56 Md. 456 ; Thorne v. Fox, 61 Md. 67 . The sixth and seventh pleas also asserted an erroneous proposition of law, that the existence of the undisclosed mortgage on the property rendered the policy void, and' will be more fully discussed in connection with the defendant’s .second prayer. At the trial of the case the defendant (appellant here) re- ■ served eight exceptions, seven to the rulings of the Court upon the evidence and the eighth to the rulings of the Court in granting the plaintiff’s three prayers, in rejecting the defendant’s three prayers and in overruling the defendant’s special exception to the plaintiff’s third prayer. These prayers will be set out by the reporter-in full in the report of the case.

The questions of law in the case are presented on these rulings and we shall now dispose of them in their regular order. The first- exception is based upon the refusal of the Court to exclude the policy of insurance as evidence. The policy had been set out in the declaration according to its legal effect, and there could have been no possible objection to the admissibility of the policy as evidence. In Prudential Ins.

Co. v. Devoe, 98 Md. 588 , it was said, the policy of insurance was the basis of the action and was properly admitted as evidence. It was in effect alleged in the pleadings and not having been denied by the next succeeding pleading it was admitted for the purpose of the action. Art. 75, see. 24, sub-sec. 108, Code Public General Laws; Caledonian Ins. Co. v. Traub, 80 Md. 215 . ⁴³⁹ The second exception was taken to the action of the Court in permitting the witness, Harlowe, who was treasurer and chairman of the Executive Committee of the plaintiff company to answer the following question: “Q. Did you ever receive any letter or other communication from the Citizens’ Mutual Eire Insurance Company, of Cecil County, the defendant, that the paper you sent then as proof of loss was not correct or was in any way not in proper form or that it had not been filed in time?” This we think, was a proper question, because the answer of the witness, “that he never received any communication at all from the defendant on the subject,” was competent evidence relating to the question of waiver, and' tended to support the plaintiff’s theory that the defendant had waived the condition of the policy, requiring the proofs of loss to be furnished within thirty days.

Hartford F. Ins. Co. v. Keating, 86 Md. 130 ; M. & M. Trans. Co. v. Eichberg, 109 Md. 228 . The third, fourth, fifth and sixth exceptions were taken to the admissibility in evidence of certain letters (which are fully set out in the exception), which had passed between Mr. Thomas H. Robinson, the attorney for the plaintiff and Mr. Wm.

T. Warburton, the president of the defendant company. This correspondence began on the 30th of July, 1907, and the last letter appears to have been written on the 11th of January, 1908. They all related to the subject-matter of the controversy and to the question of waiver. We entertain no doubt of the correctness of the rulings'upon these exceptions.

It is well settled that when an insurer does that which is inconsistent with its intention to insist upon a strict compliance with the conditions precedent of the contract, it is treated as having waived their performance. McElroy v. Insurance Co., 88 Md. 150 ; Continental Ins. Co. v. Reynolds, 107 Md. 96 ; Firemans Ins. Co. v. Floss & Co., 67 Md. 417 ; Caledonian Ins.

Co. v. Traub, 80 Md. 222 ; Hartford ⁴⁴⁰ Fire Insurance Co. v. Keating, 86 Md. 130 ; Rokes v. Amazon Ins. Co., 51 Md. 512 . • In the recent case of Bakhaus v. Caledonian Insurance Co., 112 Md. 676 , the cases in this State and elsewhere are carefully reviewed and fully considered by Judge Thomas upon the application of the doctrine of waiver. It was there said, the rule is well settled that the question of waiver in any case must depend upon the facts and circumstances of the ease, under review. Any acts or conduct of the insurer, or its representatives, that are, under the circumstances, calculated to mislead the insured and to induce him to believe that performance of the condition will not be required, or that proofs of loss would be ineffectual and nugatory, will, if he is thereby misled, amount to a waiver.

The seventh bill of exception relates to the lading' of the Court in admitting in evidence the proofs of loss, dated the 5th day of August, 1907. This evidence, we think, was clearly relevant to the issue, under the facts of the case, and for the reasons stated there was no error in its admission. The defendant, however, subsequently made the proof of loss evidence in the case, by calling the witness Harlowe, and asking him as to the truth of the statements set out therein and that there was a mortgage on the property, at the dato of the issuing of the policy. The questions upon the pleadings and the evidence having-been disposed of, we come now, in conclusion, to the rulings of the Court on the prayers, and upon the several propositions of law contained and brought up on the eighth and the last exception.

These questions of law, as stated by the appellant in its brief, are involved in the following propositions: First, the effect of the failure to file the proofs of loss, within the time required by the policy, and whether there was any waiver of this requirement. Second, the effect of the existence undisclosed of the mortgage on the bridge; and third, as to the effect, of the pro rata clause in the policy, as ⁴⁴¹ applied to tlie facts of this case, concerning the other insurance on the property. It will he seen that the policy of insurance was issued on the 28th day of March, 1907, and covered that part of main Conowingo bridge across the Susquehanna river, located in Cecil County. The main bridge was 1,328 feet in length, extending across the Susquehanna river, from the Harford County bank of the river to the Cecil County bank, and according to a report of the Commissioners under the Act of 1829, 799 feet of the main bridge were in the limits of Harford County and 529 feet in Cecil County.

The whole of the main bridge was totally consumed or destroyed by fire on the 5th of June, 1907. There is a provision in the policy to the following effect: If fire occur the insured shall give immediate notice of any loss thereby in writing to this company, protect the property from further damage, forthwith separate the damaged and undamaged personal property, put in the best possible order, make a complete inventory of the same, stating the quantity and cost of each article and the amount claimed thereon; and within thirty days after the fire unless such time is extended in writing by this company, shall render a statement to this company, signed and sworn to by said insured, stating the knowledge and belief of the insured as to the time and origin of the fire, the interest of the insured and of all others in the property; the cash value of each item thereof and the amount of loss thereon; all incumbrances thereon; all other insurance, whether valid or not, covering any of said property; and a copy of all the descriptions and schedules in all policies; any changes in the title, use, occupation, location, possession or exposure of said property since the issuing of this policy; by whom and for what purpose any building herein described and' the several parts thereof were occupied at the time of fire; and shall furnish, if required, verified plans and specifications of any building, fixtures or machinery destroyed or damaged, and shall also, if required, ⁴⁴² furnish a certificate of the magistrate or notary public (not interested in the claim as a creditor or otherwise, nor related to the insured) living nearest the place of fire, stating that he has examined the circumstances and believes the insured has honestly sustained loss to the amount that such magistrate or notary public shall certify. It is admitted, that the following notice of loss, dated the 8th of June, 1907, was sent by the plaintiff company and received by the defendant corporation, and that the “proof of loss,” was mailed on August 5th and received by the Insurance Company on August 6th, 1907: Notice of Loss. Oohowiktgo, Mp., June 8, 1907. .

Charles E. Warburtoh, Esqr., Secretary Citizens’ Mutual Eire Ins. Co. of Cecil County. Dear Sir : I hereby notify you that the main structure of the Conowingo Bridge Co., located in Cecil and Harford Counties, was entirely consumed by fire about midnight of the 5th inst. The insurance will only partially cover the loss and is placed in the fol- lowing companies, to wit: Citizens’ Mutual Eire Insurance Co. of Cecil Co.....$3,000 Mutual Eire Insurance Company in Harford Co...... 3,000 Commercial Union Assurance Co., Limited, of London. 5,000 Home Insurance Co. of New York..................10,000 $21,000 Very truly, Chas.

B. McOohkey, Secretary. It also appears from the proof that on July 30th, 1907. Mr. Bobinson, the counsel for the appellee, in whose hands this policy of insurance together with the others held by the company had been placed for collection, wrote the following letter to Mr. W. T. Warburton, president of the defendant company: ⁴⁴³ “The Home Insurance Company of New York and the Commercial Union Assurance Company, in which the Conowinj*b Bridge was insured for $15,000 in all, desire to arbitrate the question of the value of the bridge. Why, I do not know, but as they have the right to do it the Bridge Company does not object, as the loss is far more than the amount of the insurance.

But before agreeing to arbitrate, I suggested to Mr. Albert G. Hancock, the representative of the stock companies, that I would find out if the Harford Eire Insurance Company and your Company desired to have the question of values arbitrated. Of course the expense of the arbitration would have to be paid by the companies participating. I notified the Harford Eire Insurance Company of the desire on the part of the stock companies to arbitrate values, and they told me they did not care to go to that expense, as their representative felt satisfied that the loss was far above the amount of the insurance, and that they intended to pay the-$3,000 for which they were responsible next Monday. I -therefore would thank you to