Court Opinion

ID: 4931332
Source: CourtListenerOpinion
Date Created: 2021-09-24 01:08:10.790103+00
Date Added: 2024-06-11T08:14:29.440284
License: Public Domain

Dissenting opinion by
Davis, J.
The defendants made a policy of insurance, Oct. 5, 1861, upon certain buildings and machinery, the whole being personal property. The plaintiff made no written application therefor; but the contract was with him as the owner of the property.
In order to show that he had an insurable interest, the plaintiff, at the trial, introduced in evidence a mortgage to himself, from Ira Winn, dated Dec. 1, 1860, given to se*328cure certain liabilities under a written contract of the same date. And he testified that he took possession of the property, for a breach of the condition in the mortgage, June 14, 1861; and that he and Winn, on the same day, terminated the contract, by an agreement written upon the back of it, signed by them both.
The plaintiff Emery, had been notified to produce the contract secured by the mortgage, at the trial. This he declined to do. But, in the trial of another cause, in which he was not a party, on a subsequent day, he was. called as a witness, and was compelled to produce the contract by a subpoena duces tecum. The same counsel being employed by the defendants in both cases, the contents of the written indorsements upon the back of the contract then became known to him. He thereupon filed a motion for a new tidal in the case at bar, on the ground that he had discovered new evidence material to the issue.
■ The indorsements on the contract were as follows : —
"Portland, June 15, 1861. — This agreement, so far as services and the salary of the within named Daniel C. Emery is concerned, is this day terminated by mutual consent, leaving the amount due Emery to this date, on which interest is to be paid, 13,744,79, not including liabilities for indorsing notes. " Daniel C. Emery,
"Ira Winn.”
"Portland, Jan. 1, 1863. — The liabilities of the within named Emery having been ascertained, the amount now due said Emery on the written contract is four thousand eighty-two dollars and eighty-one cents, (4,082,81) and the within contract is finally terminated by mutual consent.
" Daniel C. Emery,
"Ira Winn.”
The contract provided for services and loans by Emery, and payment therefor by Winn upon its termination, either party having the right to terminate it, after giving to the other three months notice. The termination of the contract, therefore, could not affect the mortgage, until the amount *329due Emery was paid. As the property was valued at a much larger sum than the amount due Emery, if he had taken it, it would have operated as a payment. Any recognition of it as still due and unpaid, was evidence, therefore, that the breach of the condition had been waived, and that the mortgage was still subsisting.
If it was essential for Emery to prove that he was absolute oioner of the property, the indorsements upon the contract were important evidence for the defendants. They tended to show that the mortgage was treated by the parties, not as having been paid, but as still in force; that Winn’s right to pay the amount due, and redeem the property, was still recognized; and that the amount thus remaining due from him, he still owning the property, subject to the mortgage, was agreed upon by the parties as late as Jan. 1, 1863.
It is not pretended that the defendants, or their counsel, had any knowledge of these facts, until after the trial. The plaintiff refused to produce the contract, though requested and notified to do so. The affidavit of their counsel was admitted without objection; and all the circumstances in the case show that the defendants could not have had any knowledge on the subject.
The newly discovered evidence was material, if it was necessary for Emery, in order to recover, to prove that he was absolute owner of the property, when he procured his policy of insurance.
By the third condition of his policy it is provided, that, "if the property to be insured be held in trust, or on commission, or be a leasehold or other interest not absolute, it must be so represented to the company, and expressed in the policy in writing; otherwise the insurance, as to such property, shall be void.”
If the mortgage was still in force, and the breach of the condition had been waived by Emery, then his title was not absolute but contingent. It was liable to be defeated by the payment of the amount due. Not being so " expressed in the policy, in writing,” the insurance was void by the terms *330of the contract, unless it was made valid by the statute of 1861. Day v. Charter Oak F. M. Ins. Co., 51 Maine, 91.
Prior to that time, an erroneous description of the property, in any matter material to the risk, or if such description was a warranty, rendered the policy void. Battles v. Insurance Co., 41 Maine, 208. And, if the mistake related to a part of the property, the whole policy was void. Lovejoy v. Augusta Ins. Co., 45 Maine, 472. This resulted from general principles, without any condition in the policy to that effect. Such a mistake avoided the policy by its own force.
One design of the statute of 1861 was to avoid such a result. And there can be no doubt that it is effective to this end. Such a mistake in describing the property no longer, of itself, will render the insurance void.
But there had been before, as there have since, contracts of insurance in which the parties expressly stipulate that such a mistake shall render the policy void. In such a case, though a material mistake will not, of itself, make the insurance void, will not the insertion of the stipulation have that effect? If the insured represents himself as the "absolute owner” of the property, and it is insured on that condition, with an express agreement that, if he is not, the policy shall be void, are the insurers, if the property is' mortgaged, bound to a contract they have never made f
The fifth section of the statute provides that " all provisions contained in any policy or contract of insurance, in conflict with any of the provisions of this Act, are hereby declared null and void.”
It will be observed that the statute does not, in such a case, declare the entire contract void, — but only certain parts of it. What effect will this have on the rest ? When a part of a contract, by reason of a statute, is void, can any of it be enforced? This question has often been raised in suits at law, .and is clearly settled.
When some of the stipulations in a contract are void, either at common law, or by statute, and there are other *331distinct and independent stipulations, capable of being separated from-those which are void, the latter are valid and obligatory, and may be enforced. Chitty’s Con., 693, 694; Leavitt v. Blatchford, 5 Barb. Sup. Ct., 9; Leavitt v. Palmer, (S. C.,) 3 Comst., 19.
But if the contract is single, and there is not any valid part independent of that which is void, and capable of separation from it, then, being void in part, the whole is void. Chitty’s Con., 693; Filson’s Trustees v. Himes, 5 Barr., 452.
Thus, a usurious promissory note is valid, by our present statute, though the promise to pay the illegal interest is void. For the promise to pay the principal is separable from that to pay the interest, and is in no sense dependent upon it.
But, if one makes a parol contract to sell land and also personal property, for one price for both, the whole is void; for the agreement to sell the personal property cannot be separated from the other. Cooke v. Toombs, 3 Anst., 420; Sugd. Vend., 78. So when a part of any contract is void by the statute of frauds, the other part, unless it is entirely distinct, cannot be enforced; and the whole is void. Loomis v. Newhall, 15 Pick., 159; Van Alstine v. Wimple, 5 Cow., 162.
In the case at bar, the provision which is void, instead of being distinct and separable from the others, is the very foundation of them. It is the condition on which alone the others are to be binding. Without it, the parties never agreed upon anything. Unless the plaintiff was the absolute owner of the property, the company never promised to insure it. It was only property of which he was such owner that they undertook to insure. Therefore, if the condition is void, it leaves the parties without any contract. Their minds never met, nor assented to any other. The Legislature have no power'to hold parties to stipulations to which they never agreed, —though it may make void those to which they have agreed; and we should not presume that anything of the kind was intended.
*332The great design of the statute is to prevent certain mistakes, or misdescriptions, from making polices void, of their own force. If the parties see fit to make a special contract that if the property, or the title, is not such as is represented, upon the faith of which the insurance is made, then the policy shall be void, they have a right to do so.
Eor the statute contains no prohibition. Like the statute of frauds, it simply provides that certain agreements shall be void. They are not made void as a penal offence. They were not mala in se before. They are not mala prohibita now. No question, therefore, can arise whether the parties are in pari delicto; for neither is in any wrong. They both enter into a contract, one provision of which, by the statute, is void; and this is so connected with the rest that the whole is void. The law leaves the parties as they stood before. In doing so, it does equal justice to both. It is often very important for insurers to know whether the insured has an absolute title to the property, or only a contingent or conditional one. The company agreed to insure if the plaintiff was the absolute owner; otherwise not. He represented himself to be so, and so made his contract. If he was not, he has no reason to complain.
The newly discovered evidence' being material, and having been concealed from the defendants by the plaintiff, so that it did not come to their knowledge until after the trial, the verdict ought to be set aside, and a new trial granted.
Walton, J., concurred.