Oxford Democrat. [volume] (Paris, Me.) 1833-1933, 1903-05-26

A rescript was last week handed down
in the case of Richmond l.. Melcher OF
AndOver VS.. The Insurance Company OF
Pennsylvania, which was reported to the
law court on questions of law. The full
text of the reSeript follows:
The compromise of doubtful claim is
sufficient and valid consideration for a
promise to pay money for the settlement
of such claim, and it is immaterial upon
which side the right ultimately proves
to be.
But in order for such compromise to
constitute a sufficient consideration for
the promise TO pay, it is necessary that
the parties should at least have supposed
at the time of the compromise, that the
validity of the claim made was doubtful,
either because of question as to what
facts might be susceptible of proof or
of a doubt as to the rules of law appli-
cable thereto. The claim must be one
that is made in good faith, with belief
by the claimant that there is some
chance of its successful enforcement.
The surrender of a mere grOundlesS
claim, which is known by both parties
TO be unenforcible, is not sufficient
consideration.
One Baker was insured by the defend
ant company against loss by fire upon
a dwelling house then owned by him.
The policy contained provision to the
effect that il should become void if the
property insured be conveyed without
the assent in writing of the in surer.
Subsequently, Baker conveyed the real
estate to his wife who mortgaged it to
the plaintiff. The insurance policy was
never assigned to the grantee and no no.
tice was given TO the insurance company
or its agent of the conveyance to the wife
or of the mortgage by the latter to the
plaintiff. Still later, but during the
time covered by the policy, the dwelling
house was entirely destroyed by fire.
1t is clear from the foregoing state
ment that the policy of insurance, So far
as it covered the dwelling house, had be-
come void prior TO the loss by the con-
yeyance of the property without the
knowledge or consent of the insurer and
without the assignment of the policy.
But this action by the MORTGAGE is
not brought upon the contract of in
surance but upon promise alleged to
have been made by the insurance COM
pany to pay the plaintiff the sum of 800
for the purpose of compromising his
claim against the company. II appears
that in the course of considerable cor
respondence between the plaintiff and
the agent of the defendant, the latter,
although all the time denying the liabil-
ity of the company expressed desire to
bring about settlement of the loss, and
that he finally wrote the plaintiff offer
ing, in behalf of the company, to pay
the actual cash value of the buildings at
the time of the loss, estimated to be 800.
This offer was later accepted but was
subsequently withdrawn by the COM
pany. The action is to recover upon
this promise.
Upon the undisputed facts, the case
coming to the law court upon report, 1t
is considered by the court that the offer
relied upon was not made for the pur-
pose of compromising doubtful claim.
That it can not be believed that the
plaintiff would have commenced any
action against the company upOu the
contract of insurance if the offer had not
been made. Nor that the company
could have supposed in making this
offer, that it was attempting TO settle a
doubtful claim. That the company and
its agent must have known that no claim
could be enforced against it, and that
there was no danger of its being involved
in litigation. That there is no sugges
ton in any of the correspondence that
this was an offer of compromise, but
that the whole correspondence shows
that the agent was endeavoring to get
the company to pay the loss, nOtwith-
standing there was no liability, and that
the offer made by the company was not
to pay sum of money for the sake of
settling claim about which there was
any question or doubt, but to pay the
full cash value of the property destroyed
according to it's estimate of such value.
For these reasons the case does not
come within the limitation of the rule
above stated, that the parties must at
least have believed that there was some
doubt as to the validity of the claim and
the action can not be maintained because
there was no consideration for the prom
Use sued.
Judgment for defendant.