Barrett v. Union Mutual Fire Insurance

Fletcher, J.

It is maintained by the defendant, that this policy is void, because there is no mention in it of the prior policy of $2000, as is expressly required by the fifteenth article of the by-laws to which reference was made in the policy. That the existence of this prior policy was a very material fact, there can be no doubt.

The defendants are restrained by their own by-laws, as also by the statute, from insuring more than three fourths of the value of any building; for the purpose, and with the design, of leaving the insured his own insurer for the remaining quarter part. It is manifestly important to the insurers, that the insured should thus have a common interest with them in the preservation of the property. It is therefore expressly provided, by the fifteenth article of the by-laws of the defendants, that all policies issued by them upon property previously insured shall be void, unless such previous insurance is mentioned in the policy at the time it is issued. These by-laws of the defendants are annexed to the policy, and are expressly referred to as proving the conditions and limitations upon which the insurance is made, and thus expressly form a part of the contract of insurance. Now, in point of fact, at the time when this policy was issued, there was a previous insurance which was not expressed, nor in any way mentioned or referred to in the policy. By its own express terms, therefore, this policy is void. The position, that the policy is thus void, upon the facts stated, is sustained by numerous and decisive authorities. Jackson v. Mass. Mut. Fire Ins. Co. 23 Pick. 418; Liscom v. Boston Mut. Fire Ins. Co. 9 Met. 205; Holmes v. Charlestown Mut. Fire Ins. Co. 10 Met. 211; Roberts v. Chenango County Mut. Ins. Co., 3 Hill, 501; Carpenter v. Providence Washington Ins. Co. 16 Pet. 495; Jennings v. Chenango County Mut. Ins. Co. 2 Denlo, 75. In truth, the counsel for the plaintiffs do not deny, but admit, that the policy is void, unless the omission to state the previous insurance in the policy can be supplied or remedied by parol evidence. The principal question therefore in this case is, whether or not *180the parol evidence offered by the plaintiffs for this purpose was admissible. The decision of this question depends upon a very familiar and well settled principle of law. It is a general rule, that parol evidence can never be received to contradict or materially vary the terms of a written agreement. This is undoubtedly a wise and salutary rule, though if it be understood in too literal and broad a sense, it may exclude the admission of parol evidence, in cases in which it is usually received, to justify a construction which could not otherwise have been adopted. In all cases, where a sensible interpretation can be put upon the policy without the aid of parol evidence, the effect of such evidence is materially to vary the legal construction of the contract of the parties.

The true meaning of the rule excluding parol evidence is, that such evidence shall never be used to show that the intention of the parties was directly opposite to that which their language expresses, or substantially different from any meaning that the words they have used, upon any construction, will admit or convey. In the present case, it is quite clear that the parol evidence is offered to show that the intention of the parties was substantially different from any meaning, that the words they have used, upon any construction, will admit or convey. The manifest effect was to substitute an oral contract for that which is contained in the written instrument. The evidence was not offered for the purpose of aiding in putting a construction upon the policy, as it is, according to its true intent and meaning; but to show that the intention of the parties was materially different from any meaning, that the words which they have used, upon any construction, will admit of or import. This would in fact be substituting an unwritten in the place of the written contract; the unwitten differing essentially from the written one.

It was said in the argument, that there was a mistake or fault, on the part of the defendants ; that the policy was prepared by the defendants; and that they should have expressed in it the prior policy, and omitted to do so by design or by wilful negligence; and that the assured did not read it, but supposed that the prior policy was expressed. The assured *181certainly had abundant opportunity to read the policy, and need not have accepted it, if it was not satisfactory to him, according to the agreement of the parties. If the assured accepted the policy, without looking at it, or knowing what it was, he would seem himself to be liable to the charge ot culpable negligence made against the defendants. But if from mistake or fraud an agreement is so defective, that instead of conveying the meaning of the parties, it expresses a different or opposite intent, if relief can be given at all, it must be sought exclusively in a court of equity. A court of law must act on the agreement as it is ; it cannot strike out or change any part or add any thing to it, so as to contradict or vary the agreement contained in the written instrument. The parol evidence offered in this case was therefore clearly not admissible; and taking the policy as it is, the plaintiffs cannot recover. The plaintiffs, being assignees of the policy, can have no better right to recover than the original party insured.

It is unnecessary to decide the question, whether the plaintiffs can maintain this action in their own name. But as the plaintiffs had an insurable interest in the property, and took the policy with the consent of the defendants to pay the loss to them, there would not seem to be any reason why they should not recover the loss, in this form of action. But if they could not recover in this form of action on the policy, it would seem that they might recover in their own names upon a proper count upon the express promise of the defendants to pay the loss to them, if the defendants were liable tc pay the loss to any one. Plaintiffs nonsuit.