Frederick County Mutual Fire Insurance v. Deford

Robinson, J., delivered the opinion of the Court. The plaintiffs, in their application, ffiated May 2nd, 1871. state: “We propose an insurance in your company on the following described property, * * * to wit: one thousand dollars on Bottle Run Tannery, in addition to the seven thousand dollars on same now in other offices,” * * * also “an insurance of $4000 on leather and hides tanned- and in process of tanning,-in addition to $-(dollars) on same in other companies.” On the 6th of May following, the defendant issued the policy on which this suit was brought, and in the printed body of the same was the following written clause: ‘c Other insurances permitted without notice, but all other provisions of by-laws retained.” It was proved at the trial, that on the 2nd May, 1871, a policy of $5000 on the stock of leather and hides tanned and in process of tanning, was issued by the Uüion Fire Insurance Company of Baltimore. The defendant’s fifth prayer assumes that the application by the terms of the policy became incorporated into and formed a part of the ⁴¹³ same, and is to be construed as a warranty of the truth of the facts therein stated as of the day when the policy attached, and if the jury should find' that prior to the acceptance of the defendant’s policy the plaintiffs had insured the stock in the Union Company, they are not entitled to recover. Apart from the question as to whether the application is to be construed as a warranty, the prayer is based upon the general rule that the insured, by his warranty, contracts that whatever may be the state of the facts when the application is made, they shall be as warranted on the day when the policy is accepted.

Mow, conceding for the purposes of this case, that the application is to be construed as a warranty, a question we are not to be understood as deciding; and further, that it attached to the policy as of the day when it was accepted by the plaintiffs, we are of opinion that it does not come within the principle of the rule thus relied on. The application, it will be admitted, was nota warranty when it was signed and delivered to the defendant, and if it became so afterwards it was by the terms of the policy which the plaintiffs accepted. When it was, however, accepted, there was a written clause in the body of the same, providing, that “ other insurances permitted without notice. ’ ’ Ordinarily the insurer requires notice of other insurances, both prior and subsequent — prior, in order that he may determine whether the insured has any such substantial interest in the property as will guarantee on his part vigilance and care in the preservation of the same, and subsequent,-in order to prevent an over-insurance after the policy is issued. This is a condition, however, which the insurer may waive, and whenever a clause is inserted in the body of the policy, in these words, “other insurances permitted without notice,” we take the rule to be, that the language thus used, is to be construed as applicable to prior as well as subsequent insurances.

The ⁴¹⁴ words are general and must be understood as having a general application, unless there is some other clause, showing the parties intended them to be understood in a restricted sense. If the intention be to include only prior or subsequent insurances, then these words ought to be used, in order that it may clearly appear to which of the two reference is made. When the policy of the defendant was accepted and the application of the plaintiffs became thereby a warranty, there was an express provision waiving all notice of either prior or subsequent insurances. What was the necessity, then, of notifying the defendant of an insurance subsequent to the application, but prior to the issuing of the policy?

Whatever may have been the duty of the plaintiffs, apart from the terms of such a clause, it cannot be held that such notice was necessary in the face of a waiver so direct and explicit. Then, again, we cannot overlook the fact, that this clause was inserted in writing in the printed body of the policy, thus showing that whatever might have been the requirements of the bylaws in regard to notice of other insurances, it was the purpose of the defendant to waive such requirements, in so far as they