Prsdt. and Directors of Balto. Fire Ins. Co. v. Loney

Cocuran, J., delivered the opinion of this Court: This suit was brought on a policy of insurance, issued by the appellant on tho 27th of August 1855, and continued ³⁴ by successive renewals to the 1st of July 1857, by which the appellees, as co-partners, were insured to the amount of $5,000 against loss by fire on goods contained in the 3rd story of a brick warehouse on Hanover St., in the City of Baltimore. The policy contains a condition that it should not cover goods held in trust or on commission, unless they were so declared, and also clauses providing that other insurances on the same properly should be endorsed upon it; and in case of such other insurance and of subsequent loss, that the appellees should not be entitled to demand or recover any greater portion of the loss or damage sustained, than the amount thereby insured should bear to the whole amount of the several insurances effected* On the 25th of December 1855, the appellees obtained another insurance on the same goods to the amount" of $10,000, afterwards increased to $15,000, by a policy containing the same clauses and conditions, ijjmeckby the Fireman’s Insurance Company of Baltimore^Hthe property insured was subsequently removed, by permission of that company and the appellant, to No. 35, S. Charles St. Prior to the 14th of April 1857, the appellees had affected, and then held, in addition to these insurances, six other policies for an aggregate amount of $65,000, issued by foreign companies, containing clauses requiring goods held on commission to be so specified, and in which the goods insured were substantially described as their own, or held by them for sale on commission. On the date last mentioned, the stock of goods amounting in value to $88,113.38, on which these several insurances were obtained, was destroyed by fire. A portion of the goods amounting to $16,855.02, belonged to the appellees, and the remainder, valued at $71,258.36, on which they had a lien for commissions and advances to the amount of $36,909.39, were held by them for sale on commission.

The loss was $3,113.38 in excess of the whole amount of insurance, and the portion covered by the foreign policies was paid without reference to apportionment or contribution, leaving the balance of the loss $23,113.38 ³⁵ to be satisfied by the policies of the two Baltimore companies, to the extent of their respective liabilities. The conditions of the policy as to preliminary proof, were complied with, and a demand made for payment of the whole amount insured by it ou the Ith day of May 185T; but the appellant, contending that its liability was limited to loss on the appellees’ own goods, and proportional thereon to the aggregate amount of all the policies, offered, in satisfaction thereof, to pay the sum of $991.13, which the appellees refused to accept. Evidence was offered at the trial without exception, showing that the appellees were Commission Merchants chiefiy engaged in selling goods consigned to them for sale on commission, that they were generally known to be so engaged, and the custom of such merchants, of keeping large quantities of commission goods in store, and also tending to show, that the appellant received tlie application for this insurance, and issued this policy with a knowledge of these facts. Several prayers, involving the construction of the policy, wore offered on both sides, all of which depend on the determination of two questions: 1st, as to the extent of the risk covered by the policy; and 2nd, as to fbe'amount of the appellants’ liability upon it.

The appellees contended, on the hypothesis that the appellant knew their application was intended to be for insurance on all the goods destroyed, both their own and those bold on commission, that the policy should be so construed as to give effect to that intention; or in other words, that the extent of the risk underwritten should be ascertained from that fact, and not from the terms of the policy. The rule presented in this proposition, we think, cannot he applied here. The authorities referred to in support of the construction sought, present facts so far different from those in this case, as to involve other principles. In all of them the construction turned either upon the moaning of terms, which by usage or custom had acquired a particular sense, or on evidence that the insurer, after a ³⁶ full disclosure of facts material to the risk, and in violation of an obligation implied therefrom, neglected to ingerí in the policy such a reference to those facts as was essential to its validity as a contract of insurance.

Parol evidence wqs admitted in one class, not to change or vary the contract, but to explain the meaning of the terms used, and in the other to prevent the insurer from obtaining the advantage of a .contract, which, through its default, would otherwise have been without obligation and void. The policy in this case is entirely consistent with the terms of the application, free fyom ambiguity, and susceptible of a consistent construction in all its parts, and if there was mistake or error in the insurance effected, it does not appear to be ope attributable to the appellant, nor such as to authorize us to look beyond the terms of the policy in ascertaining its meaning and legal effect. We think it cannot be excepted from the operation of the general rule requiring written contracts to be interpreted by their own terms, without regard to extrinsic facts. Mumford vs. Hallet, 1 Johns., 439 .

Mellen & Nesmith vs. National Ins. Co., 1 Hall, 452. Phil. Ins., 47, 319.

The appellees appear to have obtained this insurance without making any specific statement of the nature of their interest in the goods destroyed, and had there been no express' condition to the contrary, their interest in the goods held on commission, might have been covered by the policy, for upon that state of fact, the material question would have been, whether the failure to inform the insurer that the goods were held on commission, would have affected the risk, and the admission, that the communication of that fact, would not have changed tlio rate of premium, might have been relied on as concluding it. But that is not the question here. This policy expressly provides that it was not to cover goods held on commission unless they were so declared, or as we understand it, so expressed as to appear, in some form, in the description of the goods intended to be covered by it. The. right of the insurer, to ³⁷ limit tho extent of the risk by that condition, cannot be doubted.

Phillips vs. Knox County Ins. Co., 20 Ohio, 174. Briehta, vs. Lafayette Ins. Co., 2 Hall, 312 . 2 Am.

L. Ca., 642. And as we must presume, from the acceptance of the policy by the appellees, that they had knowledge of that condition, wo think it should have the contemplated effect of limiting the risk to the goods which belonged to them. The next inquiry is as to the amount of liability on tho policy, for tl|o loss sustained on those goods. As we hare before stated, the appellees held seven other policies, six of which, issued by foreign companies, covered tbe goods owned by them as well as those held on commission, on blended risks to tbe amount of $65,000, the remaining one for $15,000, issued by the Fireman’s Insurance Company of Baltimore, covering their own goods only.

There is no question in regard to the latter policy, but as the others covered the goods of the appellees, although hi ended in the risk with those held on