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N. Y. Ins. Co v. Thomas.

to this policy, the insurer shall be answerable for the full sum subscribed, &c. and be entitled to retain the premium, in the same manner as if no such subsequent insurance had been made ” Insurance was also effect

ed on the same goods at Hamburgh, the 19th June, 1798. It was held, that according to the true construction of the written and

printed clauses, the insured could not claim a return of premium on account of the insurance at Hamburgh ; and that parol evidence to show that it was the understanding and intention of the parties that the

policy was to be void in case of a double insurance, was inadmiss ble. If there be any apparent contradiction in a contract, it is the business of the

courts to endeavour to reconcile the whole instrument; and the language which is clear and explicit, must always control that which is obscure or

equivocal. Per Kent, J. Parol evidence is to be received in the case of an ambiguitas latens to ascer

tain the identity of a person or thing. but before the parol evidence is to be received in such case, the latent ambiguity must be made out and shown to the court. Per Kent, J.

This was an action on a promissory note, for $2801 25, dated the 29th May, 1798, payable *in 9 months, [*2] given to the plaintiffs, for the premium on a policy of insurance on goods of Messrs. Notnagel, Montmollin & Co. of Philadelphia, laden on board the Danish brig Peter, bound to Hamburgh, at the rate of 17 1-2 per cent. The defendant admitted the note, but claimed a set-off of 2436 dollars and 75 cents for a return of premium. The policy contained these written words: “ To return fifteen per cent. in case an insurance has been (here was an erasure) effected in Europe.” It also contained the following printed stipuJation, “ Provided that if the assured shall have made any other assurance upon the premises prior in date to this policy, then the insurers shall be answerable only for so much as the amount of such prior assurance may be deficient, &c. and shall return the premium on so much of the sum assured, as they should, by such prior assurance, be exonerated from. And in case of any insurance upon the premises, subsequent in date to this policy, the insurers shall be answerable for the full sum subscribed, without right to claim contribution from such subsequent insurers, and shall be entitled to re tain the premium in the same manner, as if no such subsequent assurance had been made.” The defendant proved

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N. Y. Ins. Co. v. Thomas.

that two letters written by Notnagel & Co. to the defendant, were laid before the plaintiffs. The first was dated 21st May, 1798, in which they say, "We intend to send a consignment, &c. to Hamburgh, at which place we have ordered insurance. We wish to insure here also, under condition of annulling the same in case of double insurance." The second letter, dated the 28th May, 1798, says, “ Please to order insurance, &c. The above insurance to be made on a premium of 17 1-2 per cent. with condition to return 15 per cent. in case the same should have been previously effected conformably to orders given by sundry opportunities.” The defendant further proved, that the insurance was effected, by virtue of these two letters, and that the word " previously" was, at first, inserted where the erasure has been *noted, and on the defendant's objecting, it was struck [*3] out; and that it was the intention of the parties, that the insurance should be void, in case of double insurance. On the 1st of May, 1798, Notnagel & Co. directed, by four different vessels, insurance to be made at Hamburgh. Insurance was effected at Hamburgh ; but not till the 19th June, 1798. The plaintiffs underwrote the policy on the 29th May, 1798.

The cause was argued at the last term, and two questions were raised for the consideration of the court.

1. Whether, by the true construction of the policy, the written clause must not be understood to refer as well to a subsequent as to a prior insurance at Hamburgh?

2. If not, then whether there be sufficient legal testimony collateral to the policy, which, in judgment of law, gives the contract that extension ?

B. Livingston, for the plaintiffs.
Hamilton, contra.

Curia adv. vult. Kent, J. now delivered the opinion of the court. 1. By the true construction of the policy, any other insurance subsequent to the one in question was not to affect it. The language of the contract is plain and decisive. An insurance prior in date was to exonerate the plaintiffs, and entitle the defendant to a return of premium. An insurance sub

N. Y. Ins. Co. v. Tbomas.

sequent in date was to have no effect at all on the present policy. This is the amount of the printed stipulation, and whether a policy be printed or written, the construction upon it must be the same, as in both cases the contract is of equal validity.

If there be any apparent contradiction in a contract, it is the business of the courts to endeavor to reconcile the whole

instrument; and the language which is clear and explicit, must always control that which is obscure *or

equivocal. But I do not perceive any contradiction between the written and printed stipulation. By the former the plaintiffs were to return fifteen per cent in case an insurance had been effected in Europe. The expression “ had been effected” is perfectly consistent with the other expression,"provided any other insurance prior in date has been made,” &c. and if there were any uncertainty in the one expression, it is wholly done away by the peremptory and decisive provisions in the printed stipulation. If the written clause be, therefore, taken in connection with the subsequent printed clauses as it ought to be, since they are but connected parts of the same contract, it cannot be understood to refer to a subsequent insurance. There is, at most, but a redundancy in the expressious.(a)(6)

(a) Quoties in verbis nulla est ambiguitas, ibi nulla expositio contra verba fienda est. (Wing. Max. p. 24.) In the absence of ambiguity, no exposition shall be made which is opposed to the express words of the in. strument. (See Bro. Max. 266.)

(6) Upon the construction of policies of insurance, Lord Ellenborough, remarks, in the case of Robertson v. French, (4 East, 135,)“ that the greater part of the printed language of them being invariable and uniform has acquired from use and practice a known and definite meaning, and that the words superadded in writing (subject indeed always to be governed in point of construction by the language and terms with which they are accompanied) are entitled nevertheless, if there should be any reasonable doubt upon the sense and meaning of the whole, to have a greater effect, attributed to them than to the printed words, inasmuch as the written words are the immediate language and terms selected by the parties themselves for the expression of their meaning, and the printed words are a general formula adapted equally to their case, and that of all other contracting parties upon similar occasions and subjects."

N Y. Ins. Co. v. Thomas.

2. The next point is, whether the parol proof be admissible to explain the contract, and if it be, what is the effect, in the present case, of such proof.

I know no rule better established, than that parol evidence shall not be admitted to disannul or substantially vary or extend a written agreement. The admission of such testimony would be mischievous and inconvenient.

Parol evidence is to be received in the case of an ambiguitas latens to ascertain the identity of a person or thing, but before the parol evidence is to be received in such case the latent ambiguity must be made out and shown to the court.(c)

In the present instance, there is no ambiguity. The language of the contract, throughout, is consistent and explicit. This general rule of law has been particularly and emphatically applied to policies. (Skinn. 54.) And except in the special instance of explanations resulting from the usage of trade, they have never been allowed to be contradicted by parol agreements.

Emerigon observes: " Il est permis de déroger aux clauses imprimées, et on est censé y déroger par cela seul que les clauses ectriles à la main y sont contraires." (1 Emerig. 34. Pardessus, n. 792.)

In commenting upon this principle, Mr. Duer remarks that, “ The reasons suggested by Lord Ellenborough for attributing a superior efficacy to the written words, command our immediate assent. The repugnant printed words, as coutained in a general formula, not prepared with any reference to the immediate contract, may well have been relained from inadvertence. The written are the terms selected for the special occasion by the parties themselves, and were necessarily inserted from design. The first, may not express the intentions of the parties, the latter, certainly do. (1 Duer on Ins 166. See also 1 Phillips on Ins. 54. Robinson v. Tobin, 1 Starkie, 336.)

(c) Ambiguitas verborum latens verificatione suppletur ; nam quod ex facto oritur ambiguum verificatione facti tollitur. (Bac. Max., reg. 25.) Latent ambiguity may be supplied by evidence ; for an ambiguity which arises by proof of an extrinsic fact may, in the same manner, be removed The cases in support of this maxim are too numerous to require citation. They will be found collected in Cowen and Hill's Notes to 1 Phill. Ev. 1360, et seq. 1 Phill. Ev. ed 1843, p. 531, et seq. I Greenleaf's Ev. ed. 1842, 297,

3 Stark. Ev. 1021. Sugden on Vendors, ed. 1836, p. 183. Wigram Ext. Ev. 78, et seq. Bro. Max. 260 263, et seq. See also for the Civil Law on this subject, Dig. lib. 50, t. 17, l. 67; id. lib. 45, t. 1, l. 8; id. lib. 22, t. I. 14.

et

seq.

N. Y. Ins. Co. v. Thomas.

Without, therefore, giving any opinion, what would [15] be the effect of the parol proof, if admissible, we think

* it was inadmissible. So, on both points raised, the court are of opinion with the plaintiffs, and that the verdict ought to stand.

Judgment sor the plaintiffs.(d)(e)

(d) [Old note.) See Park, (6th edit.) 1. 4. 546. Marsh. (2d edit.) 345.706.

(e) Upon the principle that where the language of a policy of insurance is consistent and explicit, the understanding and intention of the parties, is not admissible, to change its signification. (See 1 Phil. on Ins. 52, and cases cited.) Mr. Duer, in commenting upon this rule, observes : The policy, from the time of its execution, with the exception of the cases to be hereafter stated, in which extrinsic proof may be received, constitutes the sole evidence of the agreement of the parties ; nor, subject to these exceptions, can any previous letters or communications between them, nor even the written application or agreement, be sued to vary or control its interpretation. (New-York Ins. Co. v. Thomas, 3 Johns. Cases, l. New-York Gas Light Co. v. Mech. F. Ins. 2 Hall, 108. Phænix F. Ins. Co. v. Gurnee, 1 Paige, 278. Higginson v. Dall, 13 Mass. 99. Dow y. Whetten, 8 Wend, 166. Ewer v. Wush. Ins. Co., 16 Pick, 502. Van Ness v. The United States, 4 Peters, 286. Opinion of Story, J.) If, from mistake, the policy has been so framed as not to correspond with the previous agreement of the parties, the error may be corrected, and the policy reformed in a court of equity ; but this equitable power of remodelling a written agreement, is wisely exercised with extrenie caution, and only upon the clearest evidence. To justify the remedial action of the court, the existence of the mistake, if positively denied by the iusurer, must be established by proof morally irresistible. The prudent merchant will examine his policy as soon as he receives it, for the purpose of ascertaining whether it correspond with his previous agreement, and if a mistake be discovered, will demand from the insurer its immediate correction. If he delay the examination until a loss occur, the delay may be construed as evidence of his assent to the contract as expressed in the policy, and may thus deprive him of the relief to wbich bis title otherwise could not have been disputed.

“ The power of a court of equity to receive iu evidence the previous agreement of the parties, is not limited to the cases in which the agreement is made the basis of a reformation of the policy by an alteration of its terms. When a policy is intended to embrace the special provisions of an agreement but is so ambiguously expressed as to involve the meaning of the 'parties in serious doubt, the terms of the agreement may, with propriety, be invoked, to aid and fix the interpretation. Thus, should a policy contain a clause, that the insurance shall be void, if a policy on the premises insured is made in England, the words “is made" are so ambiguous that not only without violence, but in perfect consistency with their popular use, they may be limited to an insurance prior in date, or be construed to embrace any insurance,

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