Court Opinion

ID: 6410776
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:52:31.512893+00
Date Added: 2024-06-11T15:51:21.906010
License: Public Domain

Shaw, C. J.
The first ground of defence relied on was that at the time this policy was made there was another policy subsisting on the barn, which, by the fourteenth article of the defendants’ by-laws, made this policy void.
The plaintiff’s answer to this was, that, by a clause in the other policy, when the insured should in any way increase the risk of the insurance, that policy should become void. And he offered proof, that prior to obtaining this policy, he had increased the risk under the prior policy, by erecting a building connecting his house and barn, which greatly increased the risk. The court instructed the jury, that if the erection of the new building connecting the plaintiff’s house and bam increased the risk before the present policy was issued, the former insurance was at an end, and therefore the case was not within the by-law which rendered the policy void. The court are of opinion that this direction was correct.
The second ground of defence was founded on the eighteenth article of the by-laws, and the ground taken was, that the lien on the plaintiff’s estate for a possible assessment on his deposit note, given to the Brighton office, was an incumbrance which the plaintiff ought to have specified in his application to the defendants for the insurance now in question; and the defendants prayed the court to instruct the jury, as matter of law, that because this incumbrance was not specified, the policy was void.
It will be a grave question, we think, whether a remote contingent liability or possibility of charge for a very minute assessment is an incumbrance, within the meaning of this provision in the contract of insurance. Perhaps a different rule may apply in covenants against incumbrances, because founded on *56a different reason; there a purchaser, having paid a full compensation for the estate with all its benefits, has a right to expect in his grant and covenants an absolute and indefeasible title without further charge. Such is the ground suggested by the court in Shearer v. Ranger, 22 Pick. 447, in which it was held, that an inchoate right of dower is an incumbrance, within the meaning of a covenant against incumbrances. It is, in effect, a stipulation that if there be any charge upon the estate, known or unknown, the vendor of the estate will pay the expense of removing it. Should the same rule apply to this subject of representation with a view to insurance, every married man making application for an insurance, in answer to the question whether his estate is incumbered, must state that he has a wife living, otherwise his policy would be void. But this is not the ground on which we decide.
If the plaintiff, by increasing the risk and thereby determining his policy with the Brighton office, incurred any forfeiture, it was of the premium paid, and not of the deposit note. But as the premium had been previously paid in cash, that caused no lien on the estate. ■
It being rightly found then, upon the facts, that the plaintiff’s prior policy was at an end, his liability to assessment for others’ losses prima facie ceased with it; and if liable at all, he could only be liable to a contribution for losses incurred by other holders of policies, if any, whilst his own policy was in force, and before its termination. That, however, was peculiarly a question of fact, to be left to the jury. The evidence would rather seem to imply that there was no such liability; because the company, upon notice that the plaintiff’s policy had been so terminated, cancelled an assessment for a very small sum, which had been previously made on the plaintiff’s deposit note, in ignorance of the fact that his policy was at an end. This certainly is not conclusive; because the question is, whether any such liability to assessment existed when the policy by the defendants was made. Still it was a question of fact, whether such liability then existed. And the defendants did not request the court to submit that question of fact to the jury on the *57evidence; they requested the court to rule, as matter of law that this was an incumbrance; and we think the court could not legally so direct. As the case comes before us on exceptions, we can consider only the exceptions as they were taken.
Upon the question, whether the action can be maintained by the present plaintiff, or should have been brought in the name of Mrs. Latham, it will be observed that the stipulation in the policy was not that the whole loss should be payable to Mrs. Latham in case of loss, but only $400 out of a policy for $1200. It turns out that, in the event which has happened, the loss, being of the barn only, is less than $400. But the question is, what was the legal effect of the contract when made ? Suppose the loss had been $1200 ; would the plaintiff and Mrs. Latham each have had a right of action ? Suppose the mortgage fully paid off; would Mrs. Latham have had any right of action, having ceased to be mortgagee 1 However these questions may be determined when they distinctly arise, we think that under such a contract as this, where the money, in whole or in part, is made payable to a mortgagee in case of loss, the original assured does not cease to be a party to the contract, and to have an interest in the insurance. He has an interest to have the money paid to his mortgagee, because it extinguishes his own debt pro tanto, and enures to his benefit as if paid to himself. We think therefore that, with the knowledge and assent of such mortgagee, the action may be brought and maintained by the original assured; but with this difference : If such authority and assent were given before the commencement _ of the action, the plaintiff will be entitled to recover his costs ; but if they were not given till after the suit was brought, the plaintiff will not be entitled to recover costs of the suit. As this is a fact for the court and not for the jury, it may be proved now by affidavit to be laid before the court, when judgment will be entered accordingly.
Evidence having been presented that it was brought with the assent of Mrs. Latham, and this known to the defendants before action brought,
Judgment on the verdict, with costs.