United States Fire Insurance v. Merrick

Mitchell, J., delivered the opinion of the Court. On June 29th, 1933, the United States Fire Insurance Company, a body corporate, the appellant, executed and delivered to E. J. Merrick and Thelma C. Merrick, husband and wife, the appellees, a policy of insurance indemnifying the assured, to the extent of $2,000, against direct loss and damage by fire to the contents of the appellees’ dwelling house, located, on Deer Park Road in Deer Park, a village of Baltimore County, Maryland. The policy covered for the period of one year from, its date, and among its provisions are found the usual conditions: (a) That the entire policy shall be void if the insured has concealed or misrepresented any material fact or circumstance concerning the same, or is guilty of any fraud or false swearing touching any matter relating to the insurance, either before or after a loss, (b) That unless otherwise provided by agreement in writing added thereto, the policy shall be void if the interest of the insured be other than unconditional and sole ownership; subject, however, to a stipulation found in the policy, that musical instruments and household furnishings purchased on the installment plan are covered only to the extent of the insured’s payment thereon. And (c) that unless likewise provided by agreement in writing, the company shall not be liable for loss or damage to any property insured while encumbered by a chattel mortgage during the time of such encumbrance, it being liable only for loss or damage to unencumbered property embraced in the policy.

On July 24th, 1933, at about 2 a. m., the Deer Park Road dwelling of the insured, including all of its contents, was totally destroyed by fire; whereupon the insured sought from the company reimbursement for loss. ⁴⁸⁰ At the time of the procurement of the policy, the members of the household in which the articles were covered consisted of the insured and their infant child; and it is testified that on July 18th, 1933, six days prior to the date of the fire, Mrs. Merrick clandestinely left her husband, taking with her the infant child and certain articles of clothing and furniture, of the approximate value of $545. The husband, at the time of the fire, had charge of the work in a laundry, his duties requiring him to arrive at the laundry between the hours of 12.30 and 1.00 o’clock a. m.; and he testified that he stayed alone at the house on the night of the fire, and left for the scene of his work at about 12.30 or 12.45 a. m. Upon being notified of the fire, he immediately returned to the home, where he found the dwelling and its contents in ashes. It was testified by Mr¡ Merrick that he and his family had previously lived in a larger house on Reisterstown Road, and that he moved to the Deer Park property in May, 1933; that the dwelling on the latter property contained three rooms on the first and second floors respectively; and that, due to a crowded condition when he moved to his new home, some furniture was stored in outbuildings and was not damaged by the fire.

He further testified that after the fire he went to see Mr. Brown, the agent with whom he insured the property, and was informed that Charles T. Smith was the adjuster for the company. The policy was destroyed in the fire; and Mr. Merrick states that he asked the agent about a duplicate policy, but got no satisfactory answer from him. According to the witness Merrick, he was advised by Brown to send to the adjuster an itemized list of the articles destroyed, and the value thereof. This he did, and on July 29th, 1933, an inventory of the articles alleged to have been destroyed was received through the mail by the adjuster.

This paper was not verified by affidavit, nor was it signed or sworn to by either of the insured, as required by the terms of the policy. It showed a total loss of $3,536.49. On August 21st the adjuster acknowledged the receipt of the list of articles claimed to have been ⁴⁸¹ destroyed, advising Mr. Merrick that the company demanded full and complete compliance with the policy contract, directing special attention to the provisions of the policy with reference to the proof of loss, and inclosing a blank form for the purpose, in order that both of the insured might be in position to comply with the sworn statement referred to therein. In this letter Mr. Merrick was further told that the company waived none of the conditions of the policy and that the proof of loss must be filed within sixty days from the date of the fire, and executed before a notary public by both of the insured.

A few days after August 31st, the adjuster received from Mr. Merrick the printed proof of loss, filled out, describing the property covered by the policy as belonging to Edward J. Merrick; the same being signed and sworn to by Mr. Merrick alone, and being accompanied by an inventory of the articles destroyed, similar to the first list submitted, and showing the same total loss. On September 18th, 1933, the adjuster acknowledged receipt of the latter claim, and rejected the same for the following reasons: (a) Because it did not indicate the name of the company against which the claim was made, or the name of the insured; and that no paper showing a description of the property insured was attached. (b) That the claim was erroneous as to value and loss; was not substantiated by invoices of purchases; and that considerable of the property insured had been removed prior to the fire. (c) That the policy under which the proof was made was issued in the name of both the husband and wife, whereas the proof of loss was executed by the husband alone, and the property described as belonging solely to him.

This letter of the adjuster also stated that the company demanded a full compliance with the terms of the policy, and waived none of the conditions thereunder. On September 22nd, 1933, Daniel S. Sullivan acknowledged the receipt of the aforegoing letter, advising the ⁴⁸² adjuster that the policy was destroyed in. the same fire which resulted in the loss; requesting other blank proofs of loss, and also the return of the proofs submitted a few days before by Mr. Merrick. The proofs were not returned, but evidently a blank proof of loss was furnished, and this appears to have been filled out under the direction of Mr. Sullivan, as attorney for the insured, and is made on behalf of both Edward J. Merrick and Thelma C. Merrick. It sets forth that the property belonged to them both, and was unencumbered at the time of the fire; and is accompanied by a list of the articles alleged to have been destroyed, and the value thereof, showing a total loss of $3,528.29.

This latter proof of loss was signed by Edward J. Merrick, and the name of Thelma C. Merrick was affixed thereto, per the said Edward J. Merrick, as representing the insured. It was sworn to on September 23rd, 1933, and apparently was filed with the adjuster on the same date. On November 16th, Mr. Merrick wrote to the company for a copy of the policy, and on December 5th, through the adjuster, he received a reply inclosing the copy; the letter inclosing the same stating that, as the property insured was encumbered by a chattel mortgage at the time the policy was issued, and remained so until the time of the fire, the company tendered the refund of the premium paid. This check was later returned to the adjuster by Mr. Sullivan, and suit upon the policy was instituted on July 20th, 1934.

From a judgment entered upon a verdict of a jury in the sum of $1,610, this appeal is taken. At the trial below, the appellee Edward J. Merrick testified that at the time of the fire all of the articles listed in the final proof of loss were contained in the Deer Park Road dwelling, with the exception of such of them as had been removed by his wife when she deserted him, and he disclaimed any knowledge of such removal until after the final proof of loss was filed. This statement was corroborated by Mrs. Merrick, who testified that she deserted her husband on July 18th, 1933, without telling him that she ⁴⁸³ was going to leave him, and without letting him know where she had gone; she took up her abode in Virginia. She further stated that when she left the premises she took some articles contained in the dwelling with her; she did not tell her husband she was going to do this nor did she leave a list of what she took or tell him what she had taken; that she had meanwhile filed suit for divorce against him, and had not spoken to him from the time she left until the Saturday preceding the date of the trial.

Her verification of the list of articles she removed from the premises, at the values shown in the proof of loss, amounts to the sum of $545. There being no evidence adduced by the appellants to the contrary, it is assumed that all of the articles which were left in the dwelling at the time of the departure of Mrs. Merrick were destroyed with the building, and just which articles these were can only be ascertained by eliminating from the inventory, sworn to by Mr. Merrick and furnished the company, the articles which Mrs. Merrick at the trial, under oath, stated she had removed from the premises, under the circumstances above detailed. A stipulation is found in the record waiving any question as to the delay in filing the final proof of loss. At the trial the defendant produced in evidence a chattel mortgage in the sum of $300, executed on March 30th, 1933, by the insured to the Master Loan Service.

Inc., purporting to cover chattels then contained in the Reisterstown Road dwelling, in which the mortgagors at that time resided. The mortgage was formally executed, but was not recorded. It is shown by the record that it was made out upon a printed form of the loan company which embodied the following preliminary printed matter: “* * * the said borrowers do grant, bargain, sell and assign unto the said mortgagee, all chattels, including household furniture, useful and ornamental, now in the use and possession of the said mortgagors, and contained in the premises now known as No. 6318 Reisterstown Road, in the City of Baltimore, and particularly the following chattels.” Then follows a particular description of ⁴⁸⁴ fifteen articles of household- furniture and equipment, supplied in writing on the printed form; the only written portion of the above quotation from the mortgage being the designation of the address of the mortgagors. It is further shown that some of the property belonging to the insured at the time of the fire was property which belonged to them at the time of the execution of the chattel mortgage, and which was moved from the Reisterstown Road dwelling to the Deer Park Road premises; a part thereof being stored in outbuildings which were not destroyed, and the remaining part, except such as was later removed by Mrs. Merrick, being in the Deer Park Road dwelling and destroyed by the fire with other after acquired chattels.

The chattel mortgage was unpaid at the time of the fire; and it must be conceded that under the terms of the policy the plaintiffs are precluded from recovery for the loss of any chattels embraced in the mortgage. At the trial of the case, the plaintiffs eliminated from their claim the value, as shown by the evidence, of such of the specific chattels as were particularized in the mortgage, regardless of whether they were destroyed in the fire. They further eliminated from their claim the value of all other chattels either removed from the Deer Park Road premises by Mrs. Merrick, or otherwise not in said dwelling at the time of its destruction. It is the contention of the defendant that the general description found in the printed portion of the chattel mortgage covered all chattels which were in the Reisterstown Road dwelling at the time of the execution of the mortgage, and that, regardless of other contentions why recovery should not be had by the plaintiffs, all chattels which were in the latter dwelling when the mortgage was executed should be eliminated from the claim of loss.

At the outset, therefore, it becomes necessary to- consider the legal effect of the general description above quoted. In this connection, section 45 of article 21 of the Code of Public General Laws of Maryland provides: “Any bill of sale of personal property shall be sufficient in form ⁴⁸⁵ if it contain the names of the parties, the consideration, a description of the property conveyed, and be signed and sealed by the vendor, and dated.” Section 48 of the same article provides: “Bills of sale shall be recorded in the county or city where the vendor or donor resides within twenty days from the date thereof.” And section 49 provides: “A mortgage of personal property shall be executed, acknowledged and recorded as bills of sale.” As has been stated, the chattel mortgage now under consideration was not recorded; but, inasmuch as it was valid as between the mortgagors and the mortgagee, and was unpaid at the time of the fire, in our opinion it was sufficient evidence for the elimination of any articles covered by it, destroyed by the fire, which were embraced in the policy. The obvious reason for the insertion of the mortgage clause in the policy was to protect the hazard of the risk by requiring some substantial interest in the insured property to be retained by the insured; and from such viewpoint it makes no difference in what manner the interest has been divested. 3 Cooley’s Briefs on Insurance (2nd Ed) pp. 2250, 2251; Rhea v. Planters’ Mut. Ins.

Assn., 77 Ark. 57 , 90 S. W. 850 ; Madsen v. Farmers’ & Merchants’ Ins. Co., 87 Neb. 107 , 126 N. W. 1086 . A careful review of the authorities as to the effect which the particularization of certain chattels set forth in a mortgage has upon a general description, such as found in the instant case, justifies no hard and fast conclusion applicable in every case. In Mammon on Contracts, p. 810, sec. 410, it is said: “In modern times, many kinds of contract are drawn up on printed forms in which blanks are left by the printer to be filled in with writing to suit the peculiarities of the particular case.

As the printed words are general, being intended for any like occasion, and the written words were specially selected by the parties for the particular case, the latter will govern in case of conflict between them and the former. However, this rule will not be enforced so as to defeat the intention of the parties; and the printed stipulations will therefore give way to those in writing ⁴⁸⁶ only so far as it appears that the parties intended to modify or disregard them. And the rule is resorted to only in a case of necessity. To justify an application of it, there must be an irreconcilable inconsistency between the clauses in writing and those in printing.

An analogous rule that may be mentioned here is that, where the same number is intended to be expressed both by words and by figures,