Sun Insurance Office, Ltd. v. Mallick

Digges, J., delivered the opinion of the Court. In September, 1927, a “fine arts” policy of insurance was executed by the appellant and appellee in the amount of $75,000, “covering on an original manuscript on sheepskin ‘The Seven Books of Moses’ consisting of eleven rolls, valued at $75,000.” The policy also provides: “This policy covers the property insured hereunder as described herein against loss or damage by accident, collision, derailment, fire, theft or water or loss or damage of any kind whatsoever, except as hereinafter excluded. * * * This entire policy shall be void if the assured has concealed or misrepresented any material fact or circumstance concerning this insurance or the subject thereof; or in case of any fraud or false swearing by the assured touching any matter relating to this insurance or the subject thereof, whether before or after a loss. * * * In case of loss or damage, this company shall pay or make good to the assured such loss or damage up to but not exceeding the amount set opposite the several articles covered hereunder as shown above or as per schedule attached to this policy, which amounts are agreed to be the values of said articles for the purpose of this insurance. * * * In the event of loss, immediate notice with full particulars must be given or mailed by the assured to this company or its agent.” The property was described as being located in the dwelling house of the assured at 2730 St. Paul Street, Baltimore, Md..; and the period covered by the contract was from noon on the 23rd ⁷⁴ day of September, 1927, to noon, September 23, 1928. It will be seen that the contract was a “fine arts insurance policy,” and was a “valued policy,” which means that the parties had liquidated or agreed upon the amount to be paid by the company in case loss occurred through the happening of any risk insured ag’ainst. In other words, the parries agreed in advance (at the time the contract was executed) that the damage suffered by the assured in case of loss should be $75,000, without regard to- the intrinsic or market value of the article.

By the contract the parties agreed, not upon the value of the article insured, but on the amount to be paid by the company in event of loss. It is alleged that on the night of the 9th-10th of February, 1928, the insured property was stolen. Theft being one of the risks insured against, the appellee notified the company and made claim for $75,000, the amount at which the insured property was valued in the policy. After considerable negotiation back and forth, the right to recover was denied and the claim refused by the company.

Whereupon suit on the policy was instituted in the Superior Court of Baltimore City on September 22nd, 1928. On January 30th, 1930, the ease was heard by the court sitting as a jury, and resulted in a verdict and judgment for the appellee for $75,000. The appeal here is prosecuted from that judgment. The record in this case consists of more than nine hundred pages and contains 'all of the testimony produced in the trial below.

There are forty-seven exceptions in the record, forty-six to rulings on evidence and one to the ruling on the prayers. Thirteen prayers were offered by the plaintiff, to which the defendant objected, and filed special exceptions to the plaintiff’s first prayer. The court granted the plaintiff’s first prayer and overruled the defendant’s special exception thereto. The defendant offered sixty-seven prayers, fifteen of which were granted as offered, and twelve were granted as amended by the court.

The volume of the record in this case is largely made up of testimony which was necessary and pertinent for the de ⁷⁵ cisión of matters of fact submitted to tie jury, and wiici, having icon passed upon by tie jury, iave no proper place in tie consideration of tie case by tiis court except in so far as it be necessary in order to determine tie legal questions presented. Suci evidence will be stated as briefly as a clear understanding of tie case will permit. Mallick, tie appellee, is a native Persian; iis fatier was a well educated Persion, Iieverend Moses Jacob Mallick, a Protestant missionary, a man of culture, of above tie average means, who iad traveled extensively in Europe and once in tie United States. Ileverend Mallick iad a large family, of good standing.

He appears to iave owned a large house and ground, and conducted a sciool and orphan asylum near Urmia. At tie age oí fourteen tie appellee came to tiis country in 1900, attended sciool for some, timé, and engaged in various occupations. Ho went back to iis father’s iome in Persia about 1911, and was married in 1912, in tie latter part of wiici year ie returned to tiis country, and was followed by iis wife several years later. His fatier was among those massacred by tie Turks and Kurds in 1915.

Tie appellee testified that before leaving Persia in 1912 iis fatier gave him tie manuscript which is tie subject matter of tie insurance, explaining it was ancient and would one day ie a “fortune”; that iis fatier got tie manuscript from a “secret room”; and that ie (tie appellee) brought it to tie United States in 1912. Upon iis return to tiis country ie worked for a while for various parties in Baltimore, and at all times dealt in rags as a side line. Finally in 1917 ie estailisied himself permanently in tie rag business at 919 North Calvert Street, Baltimore. This business seems to iave prospered to suci degree as to enable him to own iis store at the address stated, and also iis iome at 2730 St. Paul Street, wiici ie purchased and put in iis wife’s name and which is still subject to a small mortgage.

At the time tie insurance policy was issued, ie had good credit and was in good standing with his hanking connections, and this condition has continued. Tie manuscript or scroll which was insured was kept in tie appellee’s store prior to 1927, at wiici place if was shown by ⁷⁶ him to a number of witnesses who testified to having seen and examined it. It appears that about 1926 the appellee read of a large sum having been obtained for old stamps, up to which time he does not seem to have attached much value to the manuscript. About this time he talked with Mr. A. J. Crape, the president of the bank in which appellee deposited, about the manuscript which he had, and later took it to Mr. Crape, who gave him a receipt for it, with the understanding that he would send it to his uncle, Mr. Jacob Crape, who was fit the University of Pennsylvania, in an effort to ascertain its value with a view to selling.

It was sent to Jacob Crape, who exhibited it at a club known as the Oriental Club, which seems to have been made up of instructors, students, or investigators in Oriental archaeology with special reference to Semitic subjects. Jacob Crape submitted to his nephew in Paltimore a report fully describing the manuscript, and a letter in which it was stated that the Jewish members of the Oriental Club seemed to be more interested than others, and desired more information in respect to the history of the manuscript than he was able to give, and stated that, with the information he had, no one was willing to place a higher value upon the manuscript than $300. This letter also stated that Jacob Crape, at the suggestion of the head of the Semitic Department, had taken the manuscript to Professor Creenstone, who told him that “synagogue documents of this sort are imported into the United States from Oriental countries where they are made, and that they cost Hebrew congregations from $75 to $250 apiece, but the columns are usually written on parchment, which is thinner than these hides and sometimes longer than this one is (93 feet).” There seems to be no contradiction that Mallick was acquainted with the contents of these communications. Subsequently the manuscript was returned by Crape to the appellee, and later was given by him to a cousin, Yonan, who lived in Yonkers, M. Y.; the purpose of this delivery being to make further investigations as to value and prospects of sale.

A receipt was given by Yonan to Mallick, in which it was agreed that the ⁷⁷ manuscript would be insured for $150,000 in favor of Mallick. Mallick later visited Yonkers, and while there the manuscript was examined by agents with a view to insuring same, but this did not result in a policy being issued. F. Albert Koloson is a member of the insurance firm of Henry M. Warfield-Koloson Company, had known Mallick for several years prior to the issuing of the policy, and had purchased rugs from him. Mallick had been to his house on several occasions, and Koloson had talked to him a great deal about conditions in Persia.

He testified that the first time he saw the manuscript was on September 2nd, 1927, when Mallick called him over the phone and asked him to come to his house to talk about business; that Mallick had told him prior to that time that he was going to give him some of his insurance; that he went to Ma Hick’s house and was shown the manuscript; “there were eleven separate rolls of very soft skin, which he said was sheepskin, and looked to me like that, as far as I could tell”; that Mallick told him he wanted to take the manuscript to New York for the purpose of trying to sell it, and wanted a policy to cover it while there; that he told Mallick “he could get it covered if he sent it by registered mail or express, but I did not know whether we qould cover it with him carrying it or not, that was not the way to insure it, if it was valuable, he ought to insure it all the time,’ and not part of the time; my suggestion was if he could get an all-risk policy at a reasonable price, he ought to cover it all the time”; that Mallick did not give- him an order for the' insurance at the time, but “asked me to get him a rate” ; that witness then got in touch by telephoning with John Gildea,, representing several marine companies, who wrote this character of insurance, and requested Gildea to give a quotation as to a rate, and the following day witness was quoted a rate of one per cent, for a policy of $100,000; this was reported to Malick, who stated that he would not pay the premium on $100,000; this premium was the rate for one year on a “valued policy” for $100,000. Witness told Mallick that he expected to go to New York some time in the month, wdiich ⁷⁸ place was the best market for that kind of insurance, and would take the matter up, and let him know if he could get a better rate. He went to New York about the end of the month and saw Mr. Myerle, connected with the firm of Beam, Wrightson & Co., with whom Eoloson had done business, and talked to him in regard to this insurance: “I told him I had an all risk client, a party who wanted an all risk policy on a manuscript, valued at $100,000. He said, yes, I can place it for you.” While Eoloson was present Myerle telephoned to Macomber & Co., the agent of the appellant, and told them substantially that he had an inquiry from Baltimore for a $100,000. all risk on a manuscript and asked what rate they would quote.

While talking to Macomber & Co., Myerle turned to Eoloson and asked “where the manuscript was, and •I said, in a private residence. He repeated it in the phone and then asked me what the fire insurance rate would be on such a residence. I told him forty cents per hundred, and then he put his hand over the phone and said, about five-eighths. I said that would be all right, and he then said into the phone, I think I have a bid of three-quarters rate, will you take it for five-eighths ?

He said, all right, and hung up the receiver and turned to me and said he would write it for five-eighths.” Myerle also asked Macomber & Co. whether there would be an additional charge for taking the manuscript to New York, and was told there would be ten cents per hundred additional. Myerle then said to Eoloson: “Do you think that will get the business ?” Eoloson said: “I will lot you know.” He then saw Mallick a day or two after his return, discussed the matter with him, and told him the premium would be five-eighths per cent, on $100,000; and Mallick finally decided to take $75,000 insurance. Eoloson further testified: “I wrote a letter to Mr. Myerle and asked him to secure a binder on it. I expected then that they would send down and ask for some one to appraise or do something of that sort, but they did not do it, and sent the policy down, very much to my surprise.

I asked for a binder but I thought we would not be able to get the policy until they had made an investigation.” The letter referred to is: ⁷⁹ “September 22, 1927. “Messrs. Beam, Mrightson & Company, “67 "Mall Street, Eew York City. “Attention: Mr. E. T. Myerle. “Fine Arts Floater. “Gentlemen: “In line with our conversation of Tuesday, will you please secure binder in the name of Abram J. Mallick for $75,000.00 all risks cover on an original manuscript on sheepskin, “The Seven Books of Moses,’ consisting of eleven rolls, covering in the residence of the insured at 2730 Si. Paul Street, Baltimore, Md., at a rate of %%, the insured to have the option of covering transit to Eew York at a rate of 10c. “Bo transit is desired at this time. “For your general information as to the moral hazard, ¡'he insured is a Persian who came to this country in 1915 and has been in business at 919 Borth Calvert Street, this city, since 1917. He owns the building at that location and also owns his residence, the address of which is given above.

Me have known him for several years and from what we have been able to learn about him, he has home during his entire stay here a very excellent reputation, having among his customers a number of our very best people, who have dealt with him for years. “Me are told he conies from one of (die best families of Persia, his father, wdio was Bev. Jacob Mallick, was a Presbyterian minister at Orumia, Persia, having been educated at Oxford and Heidclburg. This manuscript is a family heirloom that, he fells us, has been in his family for several hundred years. The writer has seen it and while I am not a judge of these things, it looks to be what he claims it is. “Assuring you of our appreciation of your handling this business for us, we are, yours very truly, “Henry M. Mariield-Boloson Company, Inc., “F. Albert Boloson, Treasurer.” ⁸⁰ Witness Boloson was then asked: “Q. Did you write that letter at the request of Mr. Mallick or was it voluntary information to Mr. Myerle or was it that Mr. Mallick asked you to write the letter ?

A. No, Mr. Mallick, after he agreed to pay the premiipm, he said, Go ahead and get the insurance. In sending the order forward to' Beam, Wrightson & Company, following out what has been my experience and the custom in handling such transactions, we expected them to bind this insurance pending an investigation of the man and the risk. When I gave them the information it was information on which to bind and also a line for investigation. I volunteered certain information.” This letter was written in Baltimore on September 22nd, 1927, was received by the appellant on September 23rd, on which date a binder was issued, and on September 28th the policy was executed and ultimately delivered 1» Mallick.

By the granting of the defendant’s first prayer, the court determined as a matter of law that it appeared from the uncontradicted evidence in the case that the contract of insurance sued upon was executed and delivered in the State of New York and was intended to be performed in the State of Maryland, and therefore the common law and statutes of New York determined the binding effect of the contract as to whether the- same is effective or void or voidable for misrepresentation, breach of warranty, or other matters determinative of whether the contract was a valid and existing obligation at the time of the alleged loss, and that the common law and statutes of Maryland govern the construction of the contract with reference to the sufficiency of performance after loss, and especially as to the legal sufficiency of the evidence of loss, the performance of the condition requiring full particulars of the loss, and the condition making the policy void in case of any fraud or false swearing by the assured touching any matter relating to this insurance or the subject thereof after a loss. It will therefore be seen that the questions in relation to which the law of the State of New Yo?:k should govern, and the questions in respect to ⁸¹ which, the Maryland law should govern, were determined in accordance with the views of and at the request of the defendant. The granting* of this prayer was excepted to by the plaintiff, and he not having appealed, because of a judgment in his favor, the correctness of the legal proposition embodied in the prayer would not ordinarily be the subject of comment in this court. However, a considerable portion of the briefs of the respective parties is devoted to this question, and we deem it wise to express our views in regard thereto, not so much for the effect in the determination of the matter now before us (because practically there seems to be little difference between the law of Kew York and Maryland on this subject), but in order to avoid the possible implication which might be made the basis of contention in future eases.

There can be no doubt that it is the settled law of this State that the locus contractus is that place where the last act which makes the agreement a binding contract is performed. In Union Trust Co. v. Knabe, 122 Md. 584 , 89 A. 1106, 1114 , it was said: “A contract is made where the last act is done to make it a binding obligation upon the parties to it. Cromwell v. Royal Ins. Co., 49 Md. 366 , 33 Am.

Rep. 258 ; Stevens v. Rasin Fertilizer Co., 87 Md. 679 , 41 A. 116 ; Latrobe v. Winans, 89 Md. 636 , 43 A. 829 ; Expressman’s Ass’n v. Hurlock, 91 Md. 585 , 46 A. 957 ; Northwestern Life Ins. Co. v. McCue, 223 U. S. 234 , 32 S. Ct. 220 , 56 L. Ed. 419 ; Northampton Ins. Co. v. Tuttle, 40 N. J. Law, 476; Milliken v. Pratt, 125 Mass. 374 ; Irving Nat. Bank v. Ellis, 74 N. J. Law, 42, 64 A. 1071 .” Fidelity Mutual Life Ass’n v. Ficklin, 74 Md. 172 , 21 A. 680 , 23 A. 197 .

The appellant cites sections 310, 341, and 342, Conflict of Latus Restatement, Tentative Draft Ko. 4, as sustaining its contention; and while these statements are not binding upon ns, yet we are inclined to give adequate weight to them in eases where they do not conflict with previous decisions of this court. The provisions cited are: “340. When an insurance policy becomes effective upon delivery by mail, the ⁸² place of contracting is where the policy is mailed. 341. When an insurance policy becomes effective upon delivery and is sent by the company to its agent and by him delivered to the assured, the place of contracting is where it is thus delivered to the assured. 342.

When an offer for an insurance contract is received by the company through a broker who acts for a client, and the policy is effective on delivery, the place 'of contracting is where the policy is delivered to the broker, (a) The broker may be an agent of both parties; but in receiving the policy from the company he is ordinarily acting as agent of the assured rather than of the company.” The effect of these provisions, in our opinion, is not in conflict with the decisions of this court above cited, but rather in harmony therewith, and they in no wise contradict the statement made in Union Trust Co. v. Knabe, supra, that a contract is made where the last act is done to make a binding obligation upon the parties. The question really is as to the application of the rule to the facts of this case; that is to say, where was the last act performed which made the contract of insurance a binding obligation between the parties? It is undoubtedly true that a broker may be the agent for both parties in respect to