Linthicum Heights Co. v. Firemen's Insurance

⁶³ Thomas, J., delivered, the opinion of the Court. In 1912 Mrs. Elizabeth Ah Benson owned an undivided one-third interest in a lot or parcel of land, and improvements thereon, in Anne Arundel County, Maryland, and her brother, G. Milton Linthicum, owned the remaining two-thirds interest in said lot, and on the* 27th day of September, 1912, the Firemen’s Insurance Company of Newark, New Jersey, issued to them, “as their respective interests may appear,” a policy of fire insurance to the amount of $1,200.00 on the dwelling house on said lot for the term of five years. On the 1st of December, 1913, Mrs. Benson and her husband conveyed her one-third interest in said property to the Linthicum Heights Company of Baltimore City, in fee, and on the 23rd of January, 1915, G. Milton Linthicum and his wife conveyed his two-third interest in the property to the Linthicum Heights Company of Baltimore City, in fee. On the 7th of December, 1915, Seth H. Linthicum, vice president of the Linthicum Heights Company, sent the policy of insurance and the following letter to J. Arthur AVickham, who, at the time the policy was issued, was^ as stated by him, solicitor for Edward G. Parker & Sons, through whom the policy was obtained from the general agents of the insurance company in Baltimore City: “December 7th, 1915. “Mr. J. Arthur Wickham, “32 South St., Baltimore. “Kindly make the enclosed policy payable to tbe Linthicum Heights Company of Baltimore City, as Mrs. Benson and Dr. Linthicum have no further interest in the same.

We remain, “Very truly yours, “J. Charles Linthicum & Brother.” Mr. AYickham states that he took the letter and policy to the office of the agents of the Firemen’s Insurance Company; that they, or some one in their office, took a copy of the letter and then handed the letter back to him; that he left the ⁶⁴ policy with the agents of the company, and that they returned it to him the next day with the following rider attached to it,, as of December 8th, 1915 : “Loss or damage, if any, under this policy shall he payable to the Linthicum Heights Company of Baltimore City, mortgagee, or trustees, as interest may appear.” Mr. Wickham further testified that the policy remained in his office until after the dwelling house referred to therein was destroyed by fire on June 14th, 1916. On the 20th of January, 1915, the Linthicum Heights Company entered into the following agreement with AValter P. Schmick and Kathryn F. Schmick, his wife, for the sale of four lota or parcels of land, being parts of the land conveyed by the deeds referred to and including the part thereof on which the dwelling house mentioned in said policy was located: “This Agreement, Made in duplicate this 20th day of January, in the year nineteen hundred and fifteen, by and between the Linthicum Heights Company of Baltimore City, a corporation, of the first, part, and AValter P. Schmick and Kathryn F. Schmick, his wife, of Baltimore City, State of Maryland, of the second part: “Witnesseih, That the said party of the first part does hereby bargain and sell unto the parties of the second part, and the said parties of the second part do hereby purchase from the said party of the first part, all that lot of ground and improvements thereon, designated as Lots Hos. 95, 96, 82 and 83 on the north side of Greenwood Boad and extending to the south side of Maple Boad, as said roads are laid down on the plat of Linthicum Heights Annex, said plat being filed in Plat Book Ho. 1, folio , in the Clerk’s Office in the Circuit Court of Anne Arundel County. “At and for the price of thirty-six hundred dollars ($3,600.00), which said sum is to be paid as follows: “The said parties of the second part are to convey unto the said party of the first part all their right, title and interest in and to property known as Ho. ⁶⁵ 2615 West Fayette street, in the City of Baltimore aforesaid, which said property is for the purposes of this contract valued at Eleven Hundred Dollars ($1,100.00), and is subject to a certain mortgage in the original sum of $1,100.00, but on which said properly the parties of the second part have now an equity of Two Hundred and Fifty Dollars ($250.00), which said equity is to be applied on the purchase price of the property hereby sold, the party of the first part to assume the unpaid balance on said mortgage, and the balance of said purchase price, to wit, Thirty-three Hundred and Fifty Dollars ($3,350.00), to be paid in monthly installments of Twenty-five Dollars ($25.00), upon the first day of each month after signing of this agreement, with interest at the rate of 6 per cent, per annum; out of said monthly installments is to be deducted the interest on the balance of the purchase price, and taxes, insurance and other expenses, assessments or charges as are levied or are to be levied on said property by the State or County authorities; interest to be charged only on monthly balances. “It is understood and agreed that when the principal sum shall have been reduced to the sum of Two Thousand Dollars ($2,000.00), the party of the first part, at its option, may require the parties of the second part to procure a Building Association mortgage for the said balance, and have the said property deeded to the said parties of the second part, by a good and merchantable title. “It is further understood and agreed that if default be made by the parties of the second part, their heirs or assigns, in any of the monthly payments aforesaid, and such default shall continue for a. period of thirty days from the date on which said payment became due and payable, such default shall be considered a breach of this contract on the part of the parties of the second part, and the whole amount due on this contract shall immediately become due and payable, and if not paid, this contract shall, at the option of the party of the first part, be null and void, and all payments made vol. 134 3 ⁶⁶ under this contract by the parties of the second part shall be retained by the party of the first part as rent for the aforesaid property. “And when the full purchase price shall have been paid, the party of the first part undertakes and agrees to give to the parties of the second part a good and sufficient deed in fee simple to the property herein described, which deed shall contain the certain restrictions, conditions and covenants contained in deeds of Linthicum Heights Annex, which restrictions, conditions and covenants fully appear in a deed from the Linthicum Heights Company to James F. McDermott, Jr., et al. See Land Records Anne Arundel County. “The parties of the second part agree not to assign their interest under this contract without the written consent of the party of the first part. “The party of the first part reserves to itself, its successors and assigns, the right to the use of the well located on one of the lots hereby sold, and further reserves a right of way or easement four feet in width across the rear of lots Nos. 82 and 83 and a right of way or easement from the rear of lots 82 and 96 to the well immediately above mentioned. “The party of the first part undertakes and agrees to make the following improvements, to wit: “Install a furnace in the main building to heat the first and second floors; install a range in the kitchen to heat the room above; to wire the house and place fixtures in same; build a porch along the front of the house, at least seven feet wide; install bathroom fixtures in the room over the kitchen; clean up the property by removing rubbish on same; place sink in kitchen; repair the shutters that have blown off of the house; run a pipe from the pump to the bathroom with a small tank in the attic, or place ah air-pressure tank in the basement, at the option of the party of the first part, and install a concrete cesspool; these improvements to be made in thirty days from the date of this agreement.” ⁶⁷ Walter P. Schmids and his wife entered into possession of the property under the above contract and occupied the dwelling thereon until the 14th of June, 1916, having paid in the meantime $560.00 on account of the purchase price. The dwelling house was. destroyed by fire on the 14th of June, 1916, and the Firemen’s Insurance Company refused to pay the amount of insurance thereon on the following grounds: (1) Because the policy had not been, transferred or made payable to the Linthicum Heights Company as the owner of the property; (2) Because the Linthicum Heights Company did not furnish proofs of loss; (3) Because the policy was avoided by tbe contract of sale between the Linthicum Heights Company and Walter P. Sehmick and wife. On the 1.2th of June, 1917, the Linthicum Heights Company filed a bill of complaint in the Circuit Court of Baltimore City against the Insurance Company to reform the policy so as to make it payable to the Linthicum Heights Company of Baltimore City and to enforce it accordingly, and the present appeal is from the decree of the Court below dismissing the bill.

Assuming that the rider or endorsement placed on the policy on December 8th, 1915, was> the result of a mistake which could be corrected by a court, of equity, and that the