Hagan v. Scottish Insurance

after making the foregoing statement of facts, delivered, the opinion of the court. ■

The decision of this case turns upon the significance to be given to the written provision of the policy which provides for insuring “ Peter Hagan and Company for account of whom it .may concern.”

In the District Court Judge McPherson' said :

“The decision of the case depends upon the effect to be given to the words ‘for. whom it may concern.’ This clause, so far as it may be'in conflict with 'other language in the policy, must, upon familiar principles, be regarded as dominant. It expresses the special agreement of the parties, for it is in writing, while the conflicting provisions are in print; and general printed conditions usually give’ way to deliberately .chosen written words. • Moreover, even if the court doubted which provision should prevail, another well-known rule requires the policy to be construed against the company rather than against the insured ; • and, therefore, Upon either ground, the clause now under consideration.is controlling. . . . The first step, therefore, in a given case is to determine what interest the person taking out the policy intended to protect. It is not essential that he should have had any specific individual in mind. ' It is enough if he intended to protect the interest that afterwards passed to the person injured ; and if he so intended-, the policy may be adopted afterwards by a subsequent sole or partial owner of the interest, although such owner may have been unknown to the person taking out the insurance, or to the company, at the tiiáe the policy was written. In the present case I have no doubt (and I find the fact to be) that Hagan intended to insure, and to keep insured for one year, the entire title to the boat. He did not intend merely to protect such interest .as he himself might have from time to time. If this had been his object the policy would, more naturally have been taken out in his own name, omitting the qualifying phrase; but he intended to protect the ownership of the boat, whether vested, in himself alone,

or shared with, or transferred to, other, persons. This being his intention, and Martin having afterwards adopted the policy by the agreement of sale and by accounting for a proper share of the premium, I think no further difficulty exists. The facts bring the dispute within .the rule laid down in Hooper v. Robinson, 98 U. S. 528 , and in other cases to which reference need not be made.”

The decree of the District Court was reversed by the Circuit Court of Appeals, with directions to dismiss the libel with costs. Judge Dallas, speaking for that court, said:

“ It is true that the written terms of a policy will control where they are in plain conflict .with its printed clauses; but no part of the instrument is to be rejected if it can be sustained' as a whole, and in the present instance the printed provisions in question and the written "words ‘ for account of whom- it may concern,’ are not irreconcilably repugnant. That the policy was issued for account of 'whom it might concern is undeniable, but whom could it concern? Possibly the then existing, or future creditors of. the boat, or perhaps the constituents of Peter Hagan and Company; but, no matter for whose account' the insurance may have been effected, it cannot be supposed that it was taken for the benefit of any one who, by the express, though printed, terms of the contract, was distinctly excluded from having Or acquiring- any interest under it. It is not necessary to our conclusion that we should question the rule of law which was applied by the court below, and we do not do so. It'is not doubted that a policy in. the name of a special party, on account of whom it may concern, will cover the interest of the person for whom, it was intended by the party who ordered it, although the particular person intended was not known ; but we find nothing in this case to support a finding that Hagan intended to insure a subsequent vendee of the boat, or of an interest therein. On the contrary, we think, as we have already said, that the retention in the policy of the 'provision that it should be entirely void if any transfer in interest, title or possession should be made, absolutely precludes the inference of an intent to make the policy applicable to any person claiming under or by virtue of such a transfer.”

, Where a marine policy is thus taken out Upon a blank policy providing by many of its terms for insurance on property or goods on land, it becomes doubly important to keep, and apply with strictness, the rule that the written shall prevail over the printed portion of a policy, as in such.case the written, even more clearly than usual, .will evidence, the real "contract between the parties. Courts will not endeavor to limit what would otherwise be the meaning and effect of the written language, by resorting to some printed provision in the policy, which, if applied, would change such meaning and render the written portion substantially useless and without application.

. In Dudgeon v. Pembroke, decided in the English House of Lords., in 1877, 2 App. Cas. 284, at 293, in speaking of this question of the difference between the- written and the printed portions of a policy, and in delivering the opinion of the court, Lord Penzance said•

“ My lords, the policy in this case is a time and not a voyage policy, and not only so, but an ordinary time policy. • There can, I apprehend, be no doubt upon that, point. It has been suggested that, by reason of the policy having been drawn up o.n a printed form, the printed terms of which are applicable to a voyage and also to goods as well as to the ship, the policy is something less, or something more, than a time policy. But the practice of mercantile men of writing into their printéd’forms the particular terms by which they desire to describe,-and limit the risk intended to be insured against, without striking out the printed words which may be applicable to a larger or different contract, is too well known, and'has- been too constantly' recognizéd in courts of law to permit of any such conclusion.”

Ve concur in the view that by virtue-of the language contained in the policy, “ on account, of whom-it may concern,” it is not necessary that the person who takes out such a policy should have at that time any specific individual in mind. If he intended the policy should cover the interest of any person to whom he might sell the entire or any part of the interest insured, that would be enough. In Hooper v. Robinson, 98 U. S. 528 , it was said _ that'a policy upon a cargo in the name of A, on ac

In 1 Phillips on Insurance it is stated:

“ Sec. 385. The rule, that an insurance ‘ fbr whom it may concern ’ will avail in behalf of the party for whom it is intended, does not mean that any specific individual must’ be intended. . . . But he may intend it for whatever -party shall prove to have an insurable interest in the specified subject, in which case it will be applicable to the interest of any person subsequently ascertained to have such an insurable interest, who adopts the insurance.

“ Sec. 388. One may become a party to the insurance effected in his behalf, in terms applicable to his interest, without any previous authority from him, by adopting it, either before or after a loss has taken place and is known to him, though the loss may have happened before the insurance was made.”

In 2 'Duer on Marine Insurance, p. 28, it is stated as follows:

“ In England, the policy in its usual and almost invariable form contains a general clause, the terms of which-are sufficiently comprehensive to embrace all persons who have ,an insurable interest in the. property, and a lawful right to be insured. The insurance is expressed to be ‘ in the name of A. B., (the person effecting the’policy,) as well fir his awn name as for- and in the name and names (without specification) of all and every other person and persons, to whom the same (the property insured) doth, may -or shall appertain,- in part or in all.-’ In the

United States, as on the continent of Europe, the general clause is framed in various forms of expression, and the construction necessarily varies, as the terms used are, more or less, extensive in their application. In some cases the insurance is expressed to be £ on account of the owners.’ In some, on ‘ account of. a person or persons, to be thereafter named; ’ but its most usual form is, ‘ on account of whom it may concern.’ An insurance on account of the ‘ owners,’ is probably limited to those who have a legal interest in the subject insured. But the words, ‘on account of whom it may concern,’ are coextensive in their possible application, with the general clause of the London policy.”

And the learned author adds in a note the following:

“ The Philadelphia policies retain the English form ; and why it has been departed from in any óf the cities of the Union, it is not easy to understand. The words are the most comprehensive and significant that .could be chosen, since they apply not only to all persons, but to every species of interest. As the clause, however, ‘for whom it may concern,’ has received the •same construction, it is not now necessary to alter it.”

The English form insures the person to whom the property insured “doth, may or shall appertain,” thus insuring the owner or one who has an interest in the -property at the time when the loss occurs. And the author says the words “ on account of whom it may concern” have the same significance as the language used in the English form.

We are constrained to differ from the conclusion arrived at by the Circuit Court of Appeals in its statement that there was nothing in the case to support a finding that Hagan intended to insure a subsequent vendee- of the boat, or of an interest therein, because of the retention in the policy of the provision that it should be entirely void, unless otherwise provided by agreement, if any change, etc., should be made. It seems to us that the very purpose of stating that the insurance Tyas on account of whom it may concern'was to do away with the printed provisions in regard to the sole ownership and to the change of ■interest. It was an agreement “ otherwise provided,” than in the printed portion of the policy. It provided for the happen

There is no doubt, and the District Court so found, that Hagan intended by the policy to secure the insurance upon the entire title, and he therefore intended thereby to protect that title during- the running of the policy, and when the clause is added in writing that, it was issued on account of whom it may concern, it shows that he'intended that such title should, be protected in, the hands of any person to whom he might transfer the same or any portion thereof. If otherwise, and the intention were only to protect his. own interest, the policy, as stated by the. .District Judge, would naturally have been taken out in his own name, omitting the qualifying phrase, on account of whom it may concern. This phrase was put in for some purpose; and such purpose was, as it seems to us, to protect the whole title without making it necessary to notify the company and obtain its consent to any transfer of interest:'

At the time when Hagan took out the policy he was sole owner, and unless he intended the written words to apply to those to whom he might afterwards assign his interest or some portion thereof, the language would seem to fill no purpose.'

If the'policy were to become void in 'case of a. transfer of all or any part of the interest of the person taking out the insurance unless the company were notified and provided by 'agreement endorsed on the policy for such change,, we domot see that any alteration in its .terms; and meaning was accomplished by the insertion of the phrase in question. By the interpretation contended for by the company, it would have the same, right, if the written provision were contained therein,

Northern Assurance Company v. Grand View Building Association, 183 U. S. 308 , has no bearing upon this case. There the party insured proved by parol an alleged waiver, by the general agent of the company, of one of the conditions in the policy which required that such waiver should only be given .in writing and endorsed on the policy. It was contended that the company was estopped because of the conduct of the agent in the existing circumstances, in issuing such policy and taking the premium, from setting up and claiming the benefit of the condition. This court held that the evidence was improperly received, and reversed the judgment.

In this case there is no question of receiving parol evidence to alter or change any condition in the policy. It is simply a question,of construction as to the meaning of the language used in the policy, and as to the' intention of the party taking it out, and whether the written portion (the intention of the party being as stated) is inconsistent with any printed portion thereof; and if so, whether-it should prevail as against such printed portion. We think the written portion is inconsistent with the printed condition as to change of interest, and as to sole ownership, and there being such inconsistency the written portion

' The judgment of the Gireu.it Gourt of Appeals must be reversed, and.that of the District Gourt of the United States for the Eastern District of Pennsylvania affirmed, and it is so ordered..

MR. Justice Gray did not hear the argument and took no part in the decision of this case.