tracts, evidence by parol. That reason is, that the common good requires that it shall be conclusively presumed in an action at law, in the absence of deceit, that the parties have committed their real understanding to writing. Hence it necessarily follows that all evidence merely oral is rejected, whose effect is to vary or contradict such expressed understanding. Such rejection arises from the consideration that oral testimony is unreliable in comparison with that which is written. It is idle to say that the estoppel, if permitted to operate, will prevent a fraud or inequitable result; most parol evidence contradictory of a written instrument has the same tendency; but such evidence is rejected, not because, if true, it ought not to be received, but because the written instrument is the safer criterion of what was the real intention of the contracting parties. In the case now criticized, the party insured stipu are not to be varied or contradicted by parol | [335]evidence. The knowledge of the agent in*the present transaction is important only as showing what the tacit understanding of the contracting parties was. Suppose, instead of proof of such tacit understanding, the plaintiff had offered to make a stronger case by showing that the agent expressly agreed that the building might be used, not only as a country store, as the policy stated, but also as a stable, and that the restraining stipulation did not apply to the extent expressed. Can anyone doubt that, according to the practice and decisions in this state, such proof should have been rejected? A rule of law admitting such evidence would be a repeal of the principle, giving a controlling efficacy to written agreements. The memory and understanding of those present at the formation of the contract would be quite as potent as the written instrument. "I have not found that it is anywhere sup-lated against the existence of buildings withposed that this general rule which illegalizes parol evidence under the conditions in question has been relaxed with respect to contracts for insurance. Decisions of the utmost authority, both in England and in this country, propound this doctrine as applicable to policies in the clearest terms." in a definite number of feet from the insured property; by the admission of parol testimony, this stipulation was restricted and limited in its effect. This result, no doubt, was strictly just, if we assume that the parol evidence was true; but, standing opposed to the written evidence, the law presumes the After citing a number of cases, the Chief reverse. The alternative is unavoidable-it Justice took notice of the case of Plumb v. is a choice between that which is written and Cattaraugus County Mut. Ins. Co. 18 N. Y. that which is unwritten. In the case cited, 392, 72 Am. Dec. 52, in the following terins: the effect of the rule adopted by the court "In the case from New York here referred was to give a different effect to the written to, there was, in the application for the pol- terms from that which they intrinsically icy, a misdescription of the distance of the possessed--a result induced by the admission adjacent buildings from the premises in- of oral evidence. This, I cannot but think, sured, and to this defense the reply was, that was a *palpable alteration of the agreement [337] the agent of the company had made the of the parties. The mistake of the court measurements, and had obtained the signa- appears to have been in regarding simply the ture of the plaintiff, on the assurance that legal effect of the facts which were proved the application was all right and just as it by parol. Receiving that testimony into should be.' The court decided that this dec- the case, a clear estoppel was made out; but laration of the agent could not be offered for the error consisted in the circumstance that the purpose of altering or contradicting the such oral evidence was, on rules well settled, written contract, but that it was admissible inadmissible. The question presented was as an estoppel in pais. Now it is at once ob- purely one as to a rule of evidence, but it was vious that, by force of that view, the agree- treated as a problem relating to the appliment in question was enforced, not in the cation of general legal principles to an adsense of the written terms, but in the sense mitted state of facts. The case was not deof the oral evidence, and that the practical cided by a unanimous court, three judges result was precisely the same as though the dissented, and, in my judgment, that dissent instrument had been reformed in conformity was based on satisfactory grounds. to such evidence at the trial. I think there The facts now before us do not present the [336] is no doubt that this application *of the doc- elements of an estoppel. Such a defense trine of estoppel to written contracts is an rests on a misconception as to a state of entire novelty. In the long line of innumer- facts, induced by the party against whom it able cases which have proceeded and been de- is set up. The person who seeks to take adcided on the ground that parol evidence is vantage of it must have been misled by the not admissible as against a written instru- words or conduct of another. Now, in the ment, no judge or counsel has ever intimated, present case, the agent did not make any as it is believed, that the same result could statement, nor did he do anything which led be substantially attained by a resort to this the plaintiff to alter his condition. The circuity. It is true that, if there be a sub- most that can be laid to his charge is that stantial ground in legal principle for its in-from carelessness he omitted properly to troduction, the fact that it is new will not describe the use of the premises insured. debar from its adoption; but I have not been But this was not a misstatement of a fact able to perceive the existence of such sub-on which the plaintiff acted, because the stantial ground. In my apprehension the doctrine can be made to appear plausible only by closing the eyes to the reason of the rule which rejects, in the presence of written con183 U. S. U. S., BOOK 46. plaintiff was aware of the circumstance that the building was put to another use. The alleged error in the description is plain on the face of the policy, and the law incontest 15 225 In Pennsylvania, it has always been held that courts of law will not permit the terms of written contracts to be varied or altered by parol evidence of what took place at or before the time the contracts were made, and that policies of insurance are within the protection of the rule. Thus, when it was stipulated in the conditions of insurance that a false description of the property insured should avoid the policy, it was held that a misdescription defeated the plaintiff's right to recover under it, though the statements were known to be false by the insurer's agent, who prepared the de[338]scription, *and informed the plaintiff that in that respect the description was immaterial. Smith v. Cash Mut. F. Ins. Co. 24 Pa. 320; Columbia Ins. Co. v. Cooper, 50 Pa. 331. ably charges the parties with knowledge of | conceded; and, in order to avoid the effect [339] the meaning and legal effect of his own writ- of the condition above quoted, the plaintiff ten contract. To found an estoppel undertook to prove that the defendant comon the ignorance of the plaintiff of the pany, by its own acts, had waived the condi plainly expressed meaning of his own con- tion, and was thereby estopped from setting tract would be absurd." it up as a bar to his recovery. As is usual in such cases, there was more or less conflicting testimony as to what passed between the plaintiff and the defendant's agent at the inception of the contract. In the court below, as well as here, it was forcibly contended on plaintiff's behalf that the testimony referred to was sufficient to warrant the jury in finding such facts as legally constitute an estoppel; but, inasmuch as the record discloses other undisputed evidence which necessarily leads to the same conclusion, it is unnecessary to consider in detail the conflicting testimony that was submitted to the jury on that question. The policy in suit was issued in April, 1894, and the last assessment thereon was made in October following. Defendant company's secretary testified that he had notice of the additional insurance on the first Wednesday of November, 1894. Notwithstanding that notice to the company, the policy was neither recalled nor canceled; the premiums or assessments collected were not returned, nor was any effort made to return the premium note given by plaintiff, binding him to pay the premiums at such times and in such manner as the company's directors might by law require. These facts were admitted; and if, as the authorities appear to hold, they operated as an estoppel, it will be unnecessary to consume time in the consideration of other questions sought to be raised by several of the specifications of error." In Com. Mut. F. Ins. Co. v. Huntzinger, 38 Pa. 41, the subject was examined at length and the previous cases considered, and it was held that mere mutual knowledge by the assured and the agent of the falsity of a fact warranted is entirely inadequate to induce a reformation of the policy so as to make it conform with the truth; that it is rather evidence of guilty collusion between the agent and the assured, from which the latter can derive no advantage. "The conditions of insurance," said the court, "provide that notice of additional insurance, or of any change in existing insurance, shall be given to the company by the insured in writing, and shall be acknowledged in writing by the secretary; and no other notice shall be binding or have any force against the company. In absence of evidence of waiver of the notice required "Undoubtedly, if the company, after noin this stipulation, we do not think ‘the jury tice or knowledge of the over insurance, would be justified in inferring that the treated the contract as subsisting, by mak knowledge of the agent will hind the princi-ing and collecting assessments under it from pal of notice of subsequent insurance or surrender of previous insurance.' The parties agreed that written notice should be given, and in like manner acknowledged by the secretary: mere knowledge of an agent is not the equivalent of that." That the law enunciated in these and numerous other cases in Pennsylvania was not overturned by the case of Kalmutz v. Northern Mut. Ins. Co. 186 Pa. 571, 40 Atl. 816, as claimed in the brief of defendant in error, will appear on examining the facts of that case and the reasoning of the court. The opinion shows that the court refused to hold that what was alleged to have taken place at the time the contract was entered into might be received to change the legal effect of the policy, Sterrett, Ch. J., saying: "The policy in suit contains this provision as to other insurance: 'Policies of all other insurance upon property herein describedwhether made prior or subsequent to the date hereof must be indorsed on this policy, otherwise the insurance shall be void.' The existence of such other insurance of which no indorsement was made on the policy, was The court then cited Elliott v. Lycoming County Mut. Ins. Co. 66 Pa. 26, 5 Am. Rep. 325, where Justice Sharswood said: the insured, they could not afterwards set As, therefore, there was no limitation put It must be conceded that it is shown, in the able brief of the defendant in error, that, Leaving, then, the state courts, let us inquire what is the voice of the Federal authorities. in several of the states, the courts appear to | plaintiff in error, against the Providence have departed from well-settled doctrines, Washington Insurance Company, the defendin respect both to the incompetency of parol ants in error, upon a policy of insurance unevidence to alter written contracts, and to der written by the insurance company of the binding effect of stipulations in policies $15,000 'on the Glenco Cotton Factory, in the restricting the authority of the company's state of New York,' owned by Carpenter, agents. The nature of the reasoning on against loss or damage by fire. The policy which such courts have proceeded will re- was dated on the 27th of September, 1838, and ceive our consideration when we come to was to endure for one year. Among other discuss the particular terms of the contract clauses in the policy are the following: 'And before us. provided further, that in case the insured shall have already any other insurance on the property hereby insured, not notified to this corporation and mentioned in or indorsed upon this policy, then this insurance shall be void and of no effect.' 'And if the said insured or his assigns shall hereafter make any other insurance on the same property, and shall not with all reasonable diligence give notice thereof to this corporation, and have the same indorsed on this instrument, or otherwise acknowledged by them in writing, this policy shall cease and be of no[342] further effect. And in case of any other inwhether prior or subsequent to the date of this policy, the insured shall not in case of loss or damage be entitled to demand or recover on this policy any greater portion of the loss or damage sustained than the amount hereby insured shall bear to the whole amount insured on the said property.' We do not consider it necessary or profitable to examine in detail the decisions of the circuit courts or of the circuit courts of appeals. It is sufficient, for our present purpose, to say that the circuit court of appeals for the seventh circuit has held consistently to the doctrines on this subject laid down by the English and American courts generally (United Firemen's Ins. Co. v. Thomas, 47 L. R. A. 450, 27 C. C. A. 42, 53 U. S. App. 517, 82 Fed. 406), and that the court of ap-surance upon the property hereby insured, peals for the eighth circuit, in the present case, has, by a majority of its members, adopted and applied the view that a written contract may, in an action at law, be changed by parol evidence, and that such clauses as restrict the power of agents of insurance companies to contract otherwise than by some writing should be given effect, if at all, as they respect such modifications of a policy as are made or attempted to be made after it has been delivered and taken effect as a valid instrument, and should not be considered as having relation to acts done by the company or its agents at the inception of the contract. 41 C. C. A. 207, 101 Fed. 77. [341] *In such divergence of decisions, we have deemed it proper to have the present case brought before us by a writ of certiorari. As to the fundamental rule, that written contracts cannot be modified or changed by parol evidence, unless in cases where the contracts are vitiated by fraud or mutual mistake, we deem it sufficient to say that it has been treated by this court as invariable and salutary. The rule itself and the reasons on which it is based are adequately stated in the citations already given from the standard works of Starkie and Greenleaf. Policies of fire insurance in writing have always been held by this court to be within the protection of this rule. Annexed to the policy are the proposals and conditions on which the policy is asserted to be made, and among them is the following: 'Notice of all previous insurances upon property insured by this company shall be given to them, and indorsed on the policy, or otherwise acknowledged by the company in writing, at or before the time of their making insurance thereon, otherwise the policy made by this company shall be of no effect.' "The declaration averred that during the continuance of the policy he, Carpenter, was the owner of the property by the policy insured, and was interested in said property to the whole amount so insured by the company; and that on the 9th of April, 1839, the factory was totally destroyed by fire, of which the company had due notice and proof. The cause came on for trial upon the gen eral issue, and a verdict was found for the defendants. The plaintiff took a bill of exceptions to certain instructions refused, and other instructions given by the court in certain matters of law arising out of the facts in proof at the trial; and judgment having been given upon the verdict for the defendants, the present writ of error has been brought to ascertain the validity of these exceptions. The first case to be examined is Carpenter v. Providence Washington Ins. Co. 16 Pet. 495, 10 I.. ed. 1044. The importance of this case is great, because, if the conclusion there reached was sound when expressed, and if it has not been overruled by our subsequent decisions, it is decisive of the case before us. And first, as to the facts of that case, in so far as they resemble those with which we have now to deal. They were thus stated by Mr. Justice Story, who delivered the unani-Wheeler & Co. On that day Samuel G. mous opinion of the court: "This is a writ of error to the circuit court for the district of Rhode Island. The original action was brought by Carpenter, the "From the 17th of October, 1836, to the 6th of December, 1837, Henry M. Wheeler and Samuel G. Wheeler continued to own the factory in equal moieties, and transacted business under the firm of Henry M. Wheeler sold his moiety to Jeremiah Carpenter. On the 18th of April, 1838, Henry M. Wheeler sold and conveyed his moiety to Carpenter, who thus became the sole own "The instructions prayed and refused, and also the instructions actually given by the court, are fully set forth in the record. It does not seem important to the opinion, which we are to pronounce, to recite them at large, in totidem verbis, since the points on which they turn admit of a simple and exact exposition." After disposing of the first instruction, which does not relate to our present inquiries, the court said: er of the entire property. The last convey- | fense that there was a material misrepresenance declared the property subject to a tation of the cost and value of the property mortgage on the premises from Henry M. in the factory insured made to them at the Wheeler and wife, dated in June, 1835, to time of the original insurance; and it being Epenetus Reed, on which there was then intimated by the court that if such was the [343] due $6,000, which Carpenter *assumed to fact it would avoid the policy, the plaintiff pay. There had been a prior policy on the acquiesced in that decision, and disconpremises in the Washington Insurance office, tinued or withdrew the action before verwhich, upon Carpenter's becoming the sole dict. owner, the company agreed to continue for account of Carpenter, and in case of loss, the amount to be paid to him. That policy expired on the 27th of September, 1838, the day on which the policy, upon which the present suit is brought, was effected. It is proper farther to state that other policies on the same factory had been effected and renewed from time to time, from December 12, 1836, for the benefit of the successive owners thereof, by another insurance company in Providence, called the American In- "The second instruction asked proceeds surance Company; and among these was a upon the ground that although the policy policy effected, by way of renewal, on the of the American Insurance Company of the 14th of December, 1837, in the name of 6th of December, 1836, was good upon its Henry M. Wheeler & Co., for $6,000, for the face, yet if, in point of fact, it was procured benefit of Henry M. Wheeler and Carpenter by a material misrepresentation by the own(who were then the joint owners thereof), ers of the cost and value of the premises payable in case of loss to Epenetus Reed. The insured, it was to be deemed utterly null sale by Henry M. Wheeler to Carpenter, on and void, and therefore, as a null and void the 18th of April, 1838, of his moiety hav-policy, notice thereof need not have been ing been notified to the American Insurance given to the Washington Insurance Company Company, the latter agreed to the assign- at the time of underwriting the policy dement; and the policy thenceforth became a clared on. policy for Carpenter, payable in case of loss "The court refused to give the instructo Epenetus Reed. And on the 23d of May, tion; and, on the contrary, instructed the 1838, Carpenter transferred all his interest jury that if the policy of the American Inin the policy to Epenetus Reed. The pol-surance Company was, at the time when icy thus effected on the 14th of December, that at the Washington Insurance office 1837 [in the American Insurance Company] was, (as the Washington Insurance Company assert), not notified to them at the time of effecting the policy made on the 27th of September following, and declared upon in the present suit; nor was the same ever mentioned in, or indorsed upon, the same policy; and upon this account the company insist that the present policy is, pursuant to the stipulations contained therein, utterly void. Subsequently, viz., on the 11th of December, 1838, the American Insurance Company renewed the policy of the 14th of "Indeed, we are not prepared to say that December, 1837, for Carpenter, and at his the court might not have gone farther, and request, for one year. This renewed policy have held that a policy-existing and in the was never notified to the Washington Insur- hands of the insured, and not utterly void ance Company, nor acknowledged by them upon its very face, without any reference in writing; nor does it appear ever to have whatever to any extrinsic facts-should been actually assigned to Epenetus Reed, have been notified to the underwriters, even down to the period of the loss of the factory although by proofs afforded by such extrinby fire. On this account also, the Washing-sic facts it might be held in its very origin [846]ton Insurance Company insist that their and concoction a nullity. policy of the previous 27th of September, 1838, is, according to the stipulations therein contained, utterly void. "It seems to have been admitted, although not directly proved, that a suit was brought upon the policy of the 14th of December, 1937, at the American Insurance office, after the loss, by Carpenter, as trustee of or for the benefit of Reed, for the amount of the $6,000 insured thereby; and that at the November term, 1839, of the circuit court, the company set up as a de was made, treated by all the parties thereto After discussing the question, the court "And this leads us to say a few words upon the nature and importance and sound policy of the clauses in fire policies, respecting notice of prior and subsequent policies. They are designed to enable the underwriters, who are almost necessarily ignorant of many facts which might materially affect their rights and interests, to judge whether they ought to insure at all, or for what premium; and to ascertain whether there still remains any such substantial interest of the insured in the premises insured as will guar antee on his part vigilance, care, and stren- | Insurance Company had notice, in fact, of uous exertions to preserve the property. To the existence of the policy in the American quote the language of this court in the office, that was in law a compliance with passage already cited, the underwriters do the terms of the policy.' The court refused not rely so much upon the principles as up- to give the instruction as prayed, but inon the interest of the assured. Besides, instructed the jury that at law, whatever these policies there is an express provision might be the case in equity, mere parol nothat in cases of any prior or subsequent in- tice of such insurance was not, of itself. surances, the underwriters are to be liable sufficient to comply with the requirements [347] only for a ratable proportion of the loss or of the policy declared on; but that it was damage as the amount insured by them bears necessary, in case of any such prior policy, to the whole amount insured thereon. So that the same should not only be notified that it constitutes a very important ingre- to the company, but should be mentioned dient in ascertaining the amount which they in or indorsed upon the policy; otherwise are liable to contribute towards any loss; the insurance was to be void and of no effect. and whether there be any other insurance "We think this instruction was perfectly or not upon the property, is a fact perfectly correct. It merely expresses the very lanknown to the insured, and not easily or guage and sense of the stipulation of the ordinarily within the means of knowledge policy; and it can never be properly said of the underwriters. that the stipulation in the policy is com"The public, too, have an interest in main-plied with, when there has been no such taining the validity of these clauses, and mention or indorsement as it positively regiving them full effect and operation. They quires, and without which it declares the have a tendency to keep premiums down to policy shall henceforth be void and of no the lowest rates, and to uphold institutions effect." [340]o this sort, so essential in the *present sta of our country for the protection of the vast interest embarked in manufactures and on consignments of goods in warehouses. If these clauses are to be construed with a close and scrutinizing jealousy, when they may be complied with in all cases by ordinary good faith and ordinary diligence on the part of the insured, the effect will be to discourage the establishment of fire insurance companies, or to restrict their operations to cases where the parties and the premises are within the personal observation and knowledge of the underwriters. Such a course would necessarily have a tendency to enhance premiums, and to make it difficult to obtain insurance where the parties live, or the property is situate, at a distance from the place where the insurance is sought. But be these considerations as they may, we see no reason why, as these clauses are a known part of the stipulations of the policy, they ought not to receive a fair and reasonable interpretation according to their terms and obvious import. The insured has no right to complain, for he assents to comply with all the stipulations on his side, in order to entitle himself to the benefit of the contract, which upon reason or principle, he has no right to ask the court to dispense with the performance of his own part of the agreement, and yet to bind the other party to obligations, which, but for those stipulations, would not have been entered into. Two propositions, then, are clearly estab lished by this decision: (1) That where a policy provides that notice shall be given of any prior or subsequent insurance, otherwise the policy to be void, such a provision is reasonable and constitutes a condition, the breach of which will avoid the policy; (2) that where the policy provides that notice of prior or subsequent insurance must be given by indorsement upon the policy or by other writing. such provision is reasonable and one competent for the parties to agree upon, and constitutes a condition, the breach of which will avoid the policy. We are next to inquire whether this decision has been overruled, or whether it remains as an authoritative declaration of the law. Shortly after the case was decided at law, it appears that an effort was made by said Carpenter to invoke the aid of a court of equity to enable him to avoid the effect of his own disregard of the conditions contained in the policy. Carpenter v. Providence Washington Ins. Co. 4 How. 185, 11 L. ed. 931. This court held, affirming the circuit court of the United States for the district of Rhode Island, sitting in equity, that, under the facts disclosed by the pleadings and evidence, the complainant was not entitled to equitable relief. "It is a matter of regret that so great a loss, which the plaintiff and those under whom he claims intended to guard against "We are, then, of opinion that there is by insurance, should happen entirely withno error in the second instruction. On the out indemnity. But it is to be remembered contrary, there is strong ground to contend that the defendants gave abundant and *re-[348] that the stipulations in the policy as to no-peated notice to him, in writing and print tice of any prior and subsequent policies, in the policy itself, as well as other ways, were designed to apply to all cases of policies then existing in point of fact, without any inquiry into their original validity and effect, or whether they might be void or voidable. "The third instruction prayed the court to instruct the jury that if the Washington that they would not take any risks on property where it was insured beyond a certain ratio of its full value, unless the circumstances were made known to them, and the additional policy recognized in writing so as to avoid any mistake, or accident, or want of deliberate attention to the subject. |