Clay Fire & Marine Stock Insurance v. Beck

Construction of a condition in a Fire Insurance Policy — Failure to disclose-Incumbrances on property Insured. A policy of insurance against fire, contained the condition that, “If the interest of the assured in the property be any other than the entire, unconditional and sole ownership of the property, for the use and benefit of the assured, it must be so represented to the company, and so expressed in the written part of this policy, otherwise the policy shall be void.” Held : That under this condition, the failure to represent and have so expressed in the written part of the policy, the fact that incumbrances by way of mortgage existed upon the insured building at the time of the insurance, did not avoid the policy.

Appeal from the Superior Court of Baltimore City. This action was brought hy the appellees on a policy of insurance executed hy the appellant, for the sum of $2500, being $1500 on the furniture factory, leasehold property, which belonged to the appellee, George Beck, and $1000 on the stock of lumber contained in the appellees’ lumber yard, adjoining the factory. The policy was dated the 1st of September, 1813, and was to continue in force for the period of one year. The policy sued on contained the condition that, “If the interest of the assured in the property be any other than the entire, unconditional and sole ownership of the property, for the use and benefit of the assured, it must be so represented to the company, and so expressed in . the written part of this policy, otherwise the policy shall be void.” At the time the insurance was effected there were two mortgages, each for $2500 with interest, executed by the appellee, George Beck, on the leasehold property insured. The existence of these mortgages was not disclosed to the company. A fire occurred on the 9th of May, 1874, which destroyed the main building under the defendant’s policy, and also the lumber therein mentioned. At the trial, the plaintiffs offered two prayers which the Court (Dobbin, J.,) granted. The defendant offered six prayers, the second of which was granted, the others were refused. One of the prayers refused asked the Court to instruct the jury that if they found the mortgages offered in evidence, the plaintiffs could not recover. The defendant excepted. The jury rendered a verdict for the plaintiffs for $2625.00, and judgment was entered accordingly. The defendant appealed.