Luciani v. American Fire Insurance

The opinion of the Court was delivered by

Gibson, C. J.

An alteration which is not an amendment, may be disallowed; and indeed the parties have put the issue of the contest on the question whether covenant is maintainable on the case set out in the new counts; or, in other words, whether the insurance laid, was effected by specialty, or by parol. The original policy covered the stock of a confectioner, valued at #2000; which was, by express stipulation, to expire at the end of a year. It is not pretended that any new policy was sealed; but it is supposed that subsequent contracts of insurance were introduced into the old one, through a clause in the printed conditions annexed to it, which is undoubtedly a part of it. By this clause, it is provided that “ persons desirous of continuing their insurances, may do so, by a timely payment of the premium, without being subject to any charge for the policy;” and the first step taken by the assured, was not to continue the original insurance, but to insure an additional sum by payment and endorsement of an additional premium within the year, and without a correspondent alteration of the instrument, or the execution of a new one. The amount insured was extended by *173payment and endorsement of a further premium at the end of the first year, to $3000, and swelled during the second, to $5000; which was further increased for the'third, being that in which the loss occurred, by $2000 more. Now stript of the right of renewal, it would not be pretended, that the executed policy had not expired by efflux of time, or that without adaptation and redelivery, it could be used to embody a subsequent contract. The commercial nature of insurance, may serve to relax the rigidity of rules of construction; but it can dispense with no technical formality inherent in the constitution of a common law instrument. Unassisted by a particular ' stipulation, an expired policy stands on the footing of an expired lease, which, though it be competent to show the conditions of a subsequent letting by parol, is incompetent to show a subsequent letting by deed, unless it were re-delivered, having been altered to comport with the date and duration of the term. What, then, is the, _ effect of the clause in question, which, it must be admitted, was as effectually incorporated with the original policy, as if it were contained in the body of it 1 It runs,';that previous insurance might be prolonged by payment of premiupvonly, and without an additional charge for the policy. Does that import a right to renew the contract as a specialty, without renewing the instrument as a specialty 1 It imports no more than that the instrument should be furnished by the company free of an expense which would otherwise have been equal to the premium of an insurance on $500, and which might well be thought sufficiently important, to be made a subject of particular stipulation. But taking 'that to- be otherwise, how could the essence of a contract be changed by an agreement, so as to make that a specialty which is no specialty by the common law I It is to be remembered, that the action is not on the instrument as it was executed; that the' insurance effected by it, expired at the appointed time; that the clause in question, regards insurance to be made thereafter; and that every renewal, even on the old terms, was necessarily to be a distinct contract—a consideration which makes it unnecessary to insist on the fact, that each renewal was actually on new and different terms. Now it'will not be pretended, that an agreement can dispense with those forms of subsequent execution, which the law declares essential to give the contract extension, and yet preserve its generic character. A clause that subsequent verbal alterations or additions, should be treated as if they were incorporated with the instrument, and make the whole a specialty, would fail of the effect; and parol endorsements have no greater force than verbal stipulations. A covenant that notes or bills to be drawn, should have the qualities of specialties, would not make them so, or confound the settled distinctions of the ' law. It is said by Perkins, sect. 129, that a deed must be actually sealed; and that a writing delivered as a deed, is not such without it—a principle observed in Taylor v. Glaser, (2 Serg. & Rawle, 502,) where the writing, though *174said to be sealed in the conclusion, and in the memorandum of attestation, was held to be but parol. If, then, the payment of a further premium cannot make the old policy a new one, what is the effect of it? Precisely the effect of an order to .insure, and no more. The plaintiff might have demanded a policy in conformity to the clause, and have maintained an action for a breach of it; or he might perhaps maintain assumpsit on the contract remaining in parol: but he cannot maintain covenant on what is no more than the conditions of a deed to be executed.

Rule discharged.