Court Opinion

ID: 6237729
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:36:36.798885+00
Date Added: 2024-06-11T08:58:06.083856
License: Public Domain

Mr. Justice Paxson
delivered the opinion of the Court
The first assignment alleges that the court below erred in not directing a verdict for the defendants, as requested by their eleventh point.
This point was based upon an alleged breach of warranty by the plaintiff. The breach consists in a supposed untrue answer to the following question in the application for insurance : “Is there other insurance on this property ? If so, in what company? To what amount?” To which the plaintiff answered: “ On building, §2,500 in Fire Insurance Company of Northampton ; on building, §2,500 in Farmers’ and Mechanics’ Mutual Insurance Company, Millersburg, Pa.; on building, §2,500 in Farmers’ Mutual Fire Insurance Company, of Northampton, Nazareth, Pa.; on stock, §2,250 in Union Mutual Fire Insurance Company of Pennsylvania, Nazareth, Pa. Above is additional on stock and mill.”
The last named company was referred to in the paper books and the oral arguments as the Kreidersville Company, and for the purpose of convenience will be so designated here.
The defendant below insured the plaintiff in the sum of §4,000, “on stock of wheat, rye, oats, corn, flour, feed, barrels and bags in his stone mill; real value, §8,000; amount insured, §4,000; ” while the Kreidersville policy is on “ contents on mill, grain, flour, &c.”
The answer is an insurance of §2,250 on “ stock ” generally, while the policy reads as above stated. It may be that the answer is indefinite, and if the company had so regarded it they could have required a more specific answer. But they did not. They issued the policy, and the answer cannot now be treated as falsa within the meaning of tliat provision in *34the application which declares that the answers of the assured shall be a warranty. Indeed, the entire answer appears ambiguous. Instead of a categorical answer to the question, the assured volunteers information that is not called for, and .closes with the remark: “And the above is additional on .mill and stock.” ,Tust what this means we do not know, nor have we been enlightened upon the subject. There is an ambiguity, evidently the result of the ignorance of the assured, or possibly of an agent of the company in filling up the application. But the ambiguity being patent, the company should have asked for more specific information if they •desired it, and cannot now avoid the policy for such cause.
It was not error to refuse to affirm the defendant’s sixth point. (See second assignment.) The facts recited tend to prove negligence or carelessness on the part of the assured in relation to the fire. But it was said in Citizens Insurance Company v. Marsh, 5 Wright, at page 394: “ One of the purposes of insurance is to protect against losses by mere negligence and carelessness; ” while in The Phoenix Fire Insurance Company v. Cochran, 1 P. E. S., 143, it was held that “when the proximate cause of the loss is one of the perils insured against, although the remote cause was the negligence of the assured, his agents or servants, the underwriters are liable, if there be no fraudulent or barratrous design.” The learned judge, however, instructed the jury in his- general charge that if the plaintiff had been guilty of gross negligence he could not recover. This was as favorable to the defendant company as it had a right to expect.
Aside from this the point was predicated upon the defendant’s theory of the case, not upon its facts. The'1 testimony did not warrant its affirmance.
The third and eighth assignments do not require more than a word in passing. The court was asked to say that the plaintiff, having made his proofs of loss, and delivered the same to the company’s agent, is now precluded from recovering a greater sum than is set forth in said proofs. This the ’court declined to do, and we see no error in the refusal. There is no magic in a proof of loss which prevents a correction of errors contained therein. Nor is it an estoppel. It was perfectly proper to show, as was done in this case, the circumstances under which the proofs of loss were made out, and the rest was for the jury. This question was submitted to them under proper instructions. The proofs of loss were not stronger than a - receipt in full, which has always been held to he open-to explanation: Horton’s Appeal, 2 Wright, 294.; Hamsher v. Kline, 7 P. F. S., 397.
. The fourth, fifth, seventh and ninth assignments raise the *35important question of the case. They all relate to the method of determining the amount of the defendant’s liability. The defendant contends that there is a double insurance, and that not more than two-thirds of the loss shall be paid in any event. The plaintiff contends that there is no double insurance, and that even if there is, inasmuch as the total loss exceeds the total insurance, the company is bound to pay the full amount of its policy.
Assuming that the object of insurance is to insure, we are in no doubt upon this question. By condition 17 of the policy, it is provided: “ That if the insured or any other person or parties interested, shall have existing, during the existence of this policy, any other contract or agreement for insurance (whether valid or not) against loss or damage by fire on the property hereby insured, or any part thereof, not consented to by this company in writing, and mentioned in or endorsed upon this policy, then this insurance shall be of no effect; and if consent be endorsed thereon the insured shall not be entitled to demand or recover of this company any greater portion of loss or damage sustained than the amount hereby insured shall bear to the whole amount of such contracts or agreements for insurance (whether valid or not), or made before or after the date of this policy.”
And by the application the insured agreed: “ That in case of loss by fire the said company shall only be obliged to pay as if they had insured two thirds of the actual cash value of the said property, anything contained in said application or policy of insurance to the contrary notwithstanding.”
“Double insurance,” said Read, J., in Sloat v. The Royal Insurance Co., 13 Wright, at page 18, (quoting from Arnold on Insurance,) “ takes place when the assured makes two or more insurances on the same subject, the same risk, and the same interest. If there be double insurance, either simultaneously or by successive policies, in which priority of insurance is not provided for, all are insurers and liable pro rata. All the policies are considered as making but one policy, and therefore any one insurer who pays more than his proportion, may claim a contribution from others who are liable.”
It is perhaps an open question whether, under the authority of Sloat v. The Insurance Co., a double insurance exists in the case in hand, for the reason that the Kreidersville policy covered some articles not insured in the defendant’s policy. But the language of condition 17 of the policy in suit is broader in its terms than the clause of the policy in the case referred to. It says, speaking of additional insurance, that if it is “ on the property hereby insured, or any part thereof.” Without deciding this point therefore, we will treat this as a *36case of double insurance to the extent that the Kreidersville policy covered the same property as was insured by the defendant company. The result is as follows:
The defendant’s policy was for $4,000, based on a valuation of $8,000, and the Kreidersville company’s policy was for $2,250, based on a valuation of $3,000. The Kreidersville policy covered property admittedly worth $336 not covered by the other policy. It may be stated thus:
The Kreidersville policy is on property valued at.. $3,000 00
Deduct property insured thereby and not in the other company............................ 336 00
Valuation of property to which both policies apply $2,664 00
The Kreidersville company insures of this......$1,998 00
The,two policies therefore cover identical property to the amount of $5,998, which is the total insurance. The jury have found that the total loss exceeds the total insurance, and it would seem clear that the defendant company must pay the full amount of its policy, viz.: $4,000. But the latter contends that, admitting the loss to be $6,000, their liability under their policy is not only limited to $4,000 — say two thirds of the loss, but that the Kreidersville company must pro-rate with them as to the $4,000. In-other words, they estimate the liability of both companies at two thirds of the loss sustained, to be divided between them pro rata. There is no warrant for this in the contract. The clauses, in which the words “ two thirds of the actual cash value of the property ” destroyed are inserted, are used to define the maximum extent of the liability assumed by the company. Thus the defendant company may reasonably claim that its liability extends only to two thirds of the actual cash value of the property destroyed. But their claim goes beyond this, and they say that under their policy their liability is limited to two thirds of two thirds of the actual loss. We can see no reason in such a proposition.
It is easy to see why, in the case of over-insurance, the pro rata principle should apply. If the loss is $10,000 and the insurance $15,000, it is just that each policy should contribute its proportion only. But where the loss is $15,000 and the insurance $10,000 there is no room to apply such a principle. Hor does this work any hardship to the defendant company. Had there been no other policy on this property it is conceded they would have been liable to its full amount. The plaintiff would then have carried one third of the risk. He *37took out another policy, perhaps for the very purpose of covering this one third. Yet if the defendant’s contention be sustained he has obtained no additional protection by doing so, and the money paid in premiums has been expended to no purpose. We do not think the clause in the policy referred to can be extended to work such manifest injustice as this. It was intended to compel contribution in case of a partial loss, thus preventing circuity of action. It applies only where the double insurance exceeds the loss sustained.
We are not without authority to sustain this position. In the Royal Insurance Company v. Roedel, 28 P. F. S., 19, there was a double insurance, and the policy contained a clause similar to this. It was held that the loss having been greater than the total amount insured, the policies must be paid iu full. And in Sloat v. Royal. Insurance Company, supra, it was said by Justice Read : “ In the case before us there is no over-insurance; all the policies, if paid, will not pay the loss sustained by the assured. A calculation therefore which will cut down the payments must be based on erroneous principles.” The eases of Richmondville Union Seminary, 14 Gray (Mass.), 459; Haley v. Dorchester Ins. Co., 1 Allen (Mass.), 536; Ætna Fire Ins. Co. v. Tyler, 16 Wend., 400; Lucas v. Jefferson Ins. Co., 6 Cowen, 635, it is believed fully sustain the same doctrine.
The tenth assignment of error is sufficiently covered by what has been already said.
Judgment affirmed.