Case Name: The Franklin Marine and Fire Ins. Co. of Phila. vs. James G. Drake
Court: Kentucky Court of Appeals
Jurisdiction: Kentucky
Decision Date: 1841-09-25
Citations: 2 B. Mon 47
Docket Number: 
Parties: The Franklin Marine and Fire Ins. Co. of Phila. vs James G. Drake.
Judges: 
Reporter: Kentucky Reports
Volume: 41
Pages: 47–53

Head Matter:
The Franklin Marine and Fire Ins. Co. of Phila. vs James G. Drake.
Covenant.
Appeal prom the Jefferson Circuit.
Case 24.
Joint Tenants. Husband and wife. Policies of Insurance.
September 25.
The case stated,

Opinion:
ííudge Ewing
delivered the Opinion of the Court.
This is an action of covenant instituted by Drake against the Franklin Insurance Company, to be indemnified for a loss occasioned by fire, upon a policy effected by him with the Company, on two-fifths of three three-story brick houses in Louisville. The case was submitted to the Circuit Court on an agreed statement of facts, and a judgment rendered for the plaintiff, for the whole amount insured, with interest from' the time payment should have been made, according to the terms of the policy, and from this judgment the Company has appealed to this Court.
Facts agreed in the Circuit Ct.
So many of the facts agreed as are necessary to a determination of the points involved in this controversy, are the following.
General Robert Breckinridge owned the three houses, on the two-fifths of which Drake affected his policy, together with other estate, and devised the one moiety thereof to James D. Breckinridge, in trust for his daughter, and the other moiety to Maria Breckinridge, in trust for the five children of Henry Breckinridge. In a division of the estate, the three houses fell to the children of H. Breckinridge, of whom Drake married one, named Margaretta, and Robert, another, sold his interest to her, by which she became entitled to two-fifths of the three houses. Drake and his wife had a living child. In this condition of the estate, the naked legal title still remaining in Maria Breckinridge, Drake, on the 20th of December, 1839, effected with the appellants an insurance of his two-fifths in said houses, for one year, viz:l)333í on each house, amounting in all to $4000. Subsequent to the insurance by Dake, to wit: on the 3d of January, 1840, Mrs. Maria Breckinridge, as trustee, effected an insurance for one year, on the three houses, with the Spring Garden Insurance Company, by a policy containing the following language, "witnesseth that the Spring Garden Fire Insurance Company have received of Maria Breckinridge, Trustee &c., seventy-six dollars premium for making insurances upon the property herein described, viz: ten thousand dollars on three three-story brick houses, occupied, &c., situated, &c., to wit: $3333 33J on each building, ‡10,000, at I per cent, and policy, $76."
This policy was effected without the authority, consent, or knowledge of Drake, nor had he any notice of it until after the buildings wore consumed by fire, which happened in April, 1840, and was no party to an adjustment made between Mrs. Breckinridge and the Spring Garden Company, whereby she received $8571 50, and claiming to have insured for the three-fifths only of her infant cestui que trusts, applied the whole amount towards rebuilding houses on the ground which, afterwards, in a division between them and Drake and wife, was allotted to them, and Drake and wife received no part of it.
It was agreed that the houses, when consumed, were worth $12,000, and they were then renting at $3600 a year, payable quarterly. It was proven by-Mrs. Breckinridge and James Marshall, the agent of the Spring Garden Company, who drafted the policy for Mrs. Breckinridge, that the insurance was intended to cover the interest of the three younger children only, and that application was made to insure for their three-fifths only, and the agent notified at the time, that Drake had insured his two-fifths at the Franklin Office, and she desired to insure at $10,G00, for the other three-children,. The competency and sufficiency of this evidence was objected to by the' counsel of the defendant and the whole matter submitted to the Court.
The sixth article of the printed terms of the Franklin Office, annexed to Drake's -policy, contains the following provision:
"VI. Persons insuring properly- at thi-s office must " give notiee of any other insurance'made on their behalf " on the same, and cause such other insurance to be in. " dorsed. on their policies, in which case, each office " shall be liable to the payment only of a rateable pro- " portion of any loss or damage which may be sustained; " and unless such notice is given, the insured will not be " entitled to recover in case of loss,." And a similar article is contained in the printed proposals of the Spring Garden -Office^
Upon these facts several questions-are raised.
1st. 'Had Drake any insurable interest?
2nd. Placing the second insurance, or that effected by Mrs. Breckinridge, out of the question, had he a right to recover the full value of the two-fifths of the houses destroyed, not exceeding the amount-insured, or only a rateable amq-un-t, to be regulated by the amount ,of his individual interest in the houses?
3d. Is his policy forfeited by his failure to give notice of the policy effected by Mrs. Breckinridge? And—-
jolint tenant with others and who bom alive to the sueif aninsnrabieinterestinthe on. nSS 1 eie Husband whose wife has title to
in such case the tfepouVis'&rfeited, has a right to recover to the extentoftheloss, amountnamedin .¡be policy.
Tbe right of re-case'Snot afeeowiieLsÜ'eañerí tt^Hntereet fc? «meaau differ entoffice, though it may be provided in the first policy that it shall be void in case any other insurance is effected on the same property without notice— such provision only applies to a second insurance by the same part owner, and not other part owners.
4lb. Can he recover, on his policy, the whole amount insured, or only a rateable amount of his loss?
I. Drake had unquestionably an insurable interest in the two-fifths, and had a right to effect the policy. He a r*Sbt ^le use ail<^ enj°yment of the premises Oltheir rents, during the joint lives of himself and wife, and by the statute, (1 Stat. Law, 444,) would be tenant, by the courtesy, after the death of his wife: Columbian Insurance Company vs Lawrence, 2 Peters' Rep. 43; 1 Phillips on Insurance, 26; 2 Ib. 222-3, and 278.
II. We are equally clear, if his claim be unaffected ^y the second insurance, that he has a right to recover the whole value of the two-fifths in the houses destroyed, not . , " . . . exceeding the amount oí his insurance.
If the assured had an insurable interest at the time of the insurance and also at the time of loss, he has a right to recover the whole amount of damage to the property, not exceeding the sum insured, without regard to the value of the assured's interest in the property. The amount of the recovery will depend on the' interest intended to be insured, provided it be covered by the policy. A raoilgagor who has mortgaged to the full value of the property, and whose equity of redemption has been sold under execution, provided he has, at the time of the loss, a right to redeem; or a lessee for years whose lease is upon the' eve of expiring at the time of the loss, is entitled to re: cover the full value of the property destroyed, not exceed. ing the sum insured: 2 Phillips on Insurance, 278, 222; 1 Ib. 41, and the authorities referred to.
The undivided two-fifths in the houses was intended to be insured and was covered by Drake^s policy, to the amount of $4000, and he had an insurable interest at the date of the policy, and also at the time of the loss, and had a right to recover the full value of the interest in the houses, not exceeding the amount of the sum insured.
HI. We are equally clear that his policy is not forfeited, It is contrary to the principles .of justice, and cannot be deemed to have been within the contemplation of the Parües> or t° be required by any proper interpretation of the sixth article, that he should be'made to forfeit his whole policy, for a failure fo give notice of that which was done by another, without his privity or consent, and of which he had no notice himself.
IV. And though the language of the sixth article, "any insurance made-ora his behalf," is broad in its terms, and in its literal import is not confined to an insurance effected by himself, or at his instance, yet we cannot believe that it was the intention of the parties, or that the article should be so construed as to apply to any other insurance than those effected by himself or by his authority expressed or implied, or subsequent sanction: 2 Phillips on Insurance, 225. If so, then might he, by the act of another, without his knowledge or consent, and even against his will, be made either to forfeit his whole policy, for a failure to give notice, or be driven to abandon his own contract, upon which he relied for indemnity, as to one half or more, and to seek indemnity against another office which might prove to be insolvent, and upon a policy which he had no hand in effecting.
The stipulation, requiring notice to be given, implies that no other policy was meant than one that was or should be effected at his instance or upon his authority.
Of such policies ho must have notice and, having notice, might be required to give it to the office at which he had insured. But if the subsequent insurance, effected on his account by another without his knowledge or sanction, be embraced by the terms of the article, then is he required to do that which is' impossible for him to do, and, by the literal terms of the article, subjected to a for' feiture of his policy for his failure to do it. We cannot sanction such a construction.
Mrs. Breckinridge, who was invested with the naked legal title, had the right no doubt, and it might have been her duty to insure for her three infant cestui que trusts, but it was not her dutxj and we are not prepared to concede that if was her right to insure for Drake, without his consent, after she was apprised that he liad effected an insurance at another office. And if she had no right, then' her insurance without his knowledge, authority, or subsequent recognition would not be such an insurance as is embraced within the terms of the sixth article, according to our interpretation of it.
Parol proof is fcompetent to explain the .extent oftheinterest intended tobe insured by a policy ivhen it does not contradict the policy/
But, conceding that she had a right to insure, we are satisfied that the proof is entirely sufficient to establish ihe fact that she intended,'only to insure the infants' three-fifths, and did not intend to insure for Drake's interest. And that the policy if construed to embrace it, being drafted in a hurry late in the evening, as is proven by Marshall, the agent, was made to embrace it by mistake. And we are equally clear that the proof is competent.
Though in a controversy between Mrs. Breckinridge and the Spring Garden Office, it might be incompetent for the parties at law to set up and establish the mistake by parol proof, we cannot doubt that even between them a court of chancery might afford relief. And if so, and it be conceded that Mrs. Breckinridge's policy imports an insurance of the whole interest, we are not prepared to concede that Drake might not, in reply to the defence set tip by the Franklin Company, that another insurance had been effected on his behalf, set up and established by parol proof, that that insurance was not intended to embrace his interest, and was made to embrace it by mistake. If he could not, then might he be deprived of the full benefit of his own contract, not only without his own authority or consent but without the intentional act even of Mrs. Breckinridge.
But there is nothing in the terms of Mrs. 'Breckinridge's policy which necessarily imports that she did insure the whole property.
She, "as trustee, &c.," without stating for whom, "insures ten thousand dollars on the houses," without stating on what interest in the houses, or whether on the vi'hole or on a part, on the interest of the infants alone or on their interest as well as the interest of Drake.
Now as it was her duty to insure for the infants, and unquestionably not her duty to insure for Drake, after he had insured, it might be fairly implied that she insured that interest only which it was her duty to insure, and not an interest which it was not her duty to insure, and which, after she had notice of the.prior insurance, it is questionable whether she had the right to insure without authority. There being nothing in the policy absolutely implying that the whole was insured, and nothing in its terms which would necessarily lead the mind of Mrs. Breckinridge, when she effected the policy, to the conclusion, that the whole interest was insured, we are of opinion that there is no such absolute repugnance between the terms of the policy and the parol proof as to render it incompetent to establish the fact of the interest insured or intended to be insured.
Crittenden and Wolfe for appellants; Guthrie for appellee.
Judgment of the Circuit Court affirmed with costs, &e.