Court Opinion

ID: 6412737
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:53:54.919116+00
Date Added: 2024-06-11T15:51:25.572962
License: Public Domain

Chapman, J.
At the trial of the cause the presiding judge ruled that the plaintiffs had made a prima facie case, though they had offered no evidence of their title to the property insured. This ruling is objected to. It became immaterial, because the title appeared in the course of the trial by undisputed evidence. But the court are of opinion that in mutual insurance the representations of the assured, in respect to the title, stand upon the same ground with other representations. The policy may be avoided by proving their falsehood in any material part; but the legal presumption is that they are true. The ruling was therefore correct. See the opinion of Strong, J. in Fowler v. N. York Ins. Co. 23 Barb. 150.
In the application, certain questions are answered respecting the property. Question 10: “ Is it incumbered ? If so, for what sum 1" Answer: “ Applicants are mortgagees in possession. Other incumbrance exists.” It is objected that this answer contains a material misrepresentation. Whether this is so depends upon the true state of the title. At the, time of the application, September 19 1859, the property had been mortgaged as follows: To Charles Waldo, May 4 1837, with other property, for §11,500; to Thomas P. Rich, September 25 1847, for §5,000; to the plaintiffs, September 25 1848. A question was raised at the trial as to the admission of evidence tending to prove a defeasance, the deed of the plaintiffs being absolute on its face but the opinion of the court makes that evidence immaterial. *68Rich made two entries to foreclose his mortgage; one in 1850, the other in 1851. Under the last entry his foreclosure was perfected ; and it is immaterial whether the first was perfected or not. The plaintiffs’ title was extinguished by the foreclosure in 1854, though both the plaintiffs and Rich did several acts after-wards tending to show that both parties believed that this mortgage was not foreclosed. The defendants offered evidence tho Rich, in October 1856, obtained insurance on the buildings in the plaintiffs’ name, though without their knowledge.
In this state of things the plaintiffs negotiated with Charles Waldo, and obtained from him an assignment of his mortgage, March 19 1857. This was made to Pierce, one of their firm, but was paid for by their joint funds. They were then negotiating with Rich for the purchase of his interest. Two days before, he had written Pierce a letter agreeing to sell him his interest for $1,000 cash, and a further contingent sum, depending on the price which should be obtained on a sale of the land. It was to be a pro rata share on all the mortgages, thus admitting the validity of all. On the 18th of April the $1,000 was paid him by the plaintiffs. From this time the title stood as follows: The legal title as mortgagee was in Pierce, in trust for the other plaintiffs and himself. The right of possession followed, and there is no pretence that Rich ever interfered with it afterwards. A suit had long been pending to foreclose the Charles Waldo mortgage, and was afterwards prosecuted to judgment, apparently because the parties supposed the Rich mortgage had not been foreclosed, and that there was an equity of redemption still existing in some person. In June, the plaintiffs took a second assignment to Farnsworth, their clerk; but it was inoperative, as the title was already in Pierce.
The court are of opinion that, the plaintiffs being in possession, and Pierce being the legal assignee of the mortgage, in trust for them all, the answer contained no misrepresentation that should avoid the policy. The lien of the defendants on the property insured was as perfect as if all had been assignees of the legal title. The answer that other incumbrances existed was true. It is objected that the answer was insufficient, be*69cause it did not state the incumbrances more fully; but it is settled that the issuing of a policy upon the representations made is a waiver of such an objection. Hall v. People's Ins. Co. 6 Gray, 185. Allen v. Charlestown Ins. Co. 5 Gray, 389. Liberty Hall Ass'n v. Housatonic Ins. Co. 7 Gray, 261.
The defendants’ position, that they were deceived and defrauded because of the great amount of the mortgages, is untenable. It is based on the idea that the plaintiffs were in possession under their own mortgage only, and subject to the mortgages of Rich and Charles Waldo. If this had been so, and their insurance had been upon their interest under a third mortgage, the objection would have had force. But as they were in under the first mortgage, which gave them an unincumbered interest several times greater than the amount of the insurance, the amount of the mortgages was not material. The insurance had relation to the value of the buildings, and not to the cost of the whole property. The state of the title, as admitted by the parties, makes the paroi evidence which was offered by the defendants to prove fraud wholly immaterial. The fact that Rich obtained insurance on the property in the name of the plaintiffs, and without their knowledge, was equally immaterial, because it could not prejudice their claim.
It was correctly ruled that this was a valued policy. It was such in the sense in which that term is applied to policies of fire insurance. Borden v. Hingham Ins. Co. 18 Pick. 523. Fuller v. Boston Ins. Co. 4 Met. 206. Holmes v. Charlestown Ins. Co. 10 Met. 211. Phillips v. Merrimack Ins. Co. 10 Cush. 350.
Upon these principles and the admitted facts, the jury were properly instructed that the plaintiffs were entitled to recover.

Exceptions overruled