16 N.H. 177 | Superior Court of New Hampshire | 1844
It appears by the disclosure, that Josiah Eogers and son, and Daniel M. Head, being the owners of
In behalf of the company it has been contended, that inasmuch as the assured, Rogers and son and Head, after the policy was issued, mortgaged the mills to secure certain liabilities to the Concord Bank, by virtue of the twelfth section of the. act of incorporation, which is made part of the policy by reference, and in which it is provided “ That when any house or other building shall be alienated by sale' or otherwise, the policy shall-thereupon be void,” the policy ceased to be binding.
At the time of the insurance, the assured doubtless had an insurable interest upon which-the policy attached. They were the owners of the mills .unincumbered. Prior to.the fire and loss they mortgaged the premises to the Concord Bank, who had taken possession to foreclose the mortgage. The question then presents itself, whether there was still in the assured an insurable interest in the property at the time of the loss ; for if there was not, it would seem that in accordance with the established doctrine of the courts in England and in this country, the assured would not be entitled to recover upon the policy. Lucena v. Crawford, 5 Bos. & Pul. 269; Gordon v. Mass. F. & Mar. Co., 2 Pick. 249 ; Michael v. Commonwealth Ins. Co., 5 Pick. 76; Carroll v. Boston Mar. Ins. Co., 8 Mass. 515 ; Stetson v. Mass. Mut. Ins. Co., 4 Mass. 830 ; Hancox v. Fishing Ins. Co., 3 Sum. 132; Lane v. Maine Mut. Ins. Co., 3 Fairf. 44.
The interest remaining in Rogers and son and Head at the time of the fire and loss, was that of mortgagers
In Cordon v. Mass. F. & Mar. Ins. Co., after stating the law to be, that a man who has sold his property insured can not he said to suffer when the property is destroyed, that when there is no legal or equitable interest at the time of the loss, there is nothing for the insurance to operate upon, Mr. Chief Justice Parker remarks, “But a conditional transfer of property insured to secure a debt or liability, is not attended with the like consequences.
In Strong v. Manufacturers Ins. Co., 10 Pick. 40, the policy contained a provision, that if the property should be sold, or conveyed in whole or in part, the policy should be void, and bore date the 29th of December 1828. The premises had been previously mortgaged. In January 1829, the equity of redemption was sold on execution, and the loss by fire occurred on the 23d day of April next following. One Stebbins became the assignee of the- mortgage, and on the 6th of July 1829 took possession for condition broken. The court say, in delivering the judgment in that case, “Nor did any of the events subsequent to the insurance wholly divest the plaintiff of his interest; for after the sale of the equity, still he had a right to redeem, and this right might constitute a valuable interest. The law would presume it so, the contrary not appearing. The value of the plaintiff’s interest in the property insured is not material. If he had an insurable interest at the time the policy was effected, and also an interest at the time of the loss, he is entitled to recover the whole amount of damage to the property, not exceeding the sum insured.”
The court further remark, “We do not see how the incumbrances on the plaintiff’s pro]3erty could be considered material to the risk. The destruction of the house ■did not extinguish the mortgage debts; so that he was interested to the full amount of the value of the property insufed.”
We think the cases cited and those summed up in Phillips on Insurance 26, on insurable interests, show that any actual interest, legal or equitable, is insurable, and the equity of redemption of a mortgage before foreclosure falls within the class of interests thus insurable. And upon common law principles, and judicial decisions aside from statute provisions, it would not seem open to doubt, that a mere mortgage of the property insured will not operate such a transfer or conveyance of the interest of the mortgager in the property insured, as will render void the policy of insurance.
But it is contended in this case by the trustees, that the conveyance in mortgage constituted an alienation of the property insured, within the meaning of the twelfth section of the act of incorporation, which provides that “ When any house or other building shall be alienated by sale or otherwise, the policy shall thereupon be void, and be surrendered to said directors to be cancelled,” &c.
In the ease under consideration, the assured mortgaged the property to the Concord Bank, and the bank took possession of it prior to the loss, and were in possession at the time. Bid that state of facts amount to an aliena-tion of the buildings insured, within the meaning of the provision of the section of the act referred to ? Was it an alienation by sale or otherwise within the meaning of the act, and consequently within the terms of the policy, which refers to that act and adopts it as a part of the-contract ?
In Lane v. Maine Mut. F. Ins. Co., Paris, J., in considering the provisions of an act of incorporation in its terms
“ The insurers in assuming the risk provide for the continuance of the interest of the assured in the property covered, so long as their liability continues. In other words, they guard against its becoming a gaming or wager policy in any event. Accordingly so long as the próperty covered belongs to the assured, whether it be in his own possession or in that of an agent, servant, or lessee, the company’s lien remains, and an insurable interest remains. But when the property is alienated, that is, when the assured is divested of title by sale, or in any other manner, the lien of the company is dissolved, and the insured is no longer a member of the company. If a loss then happen, it is not his loss ; for as he had no property, lie could sustain no loss, and consequently could be entitled to no satisfaction. The party insured must, in all cases of fire insurance, have an interest in the property at the time of the insurance and at the time the fire happens.”
And we have seen that a conditional transfer of the property insured, to secure a debt or a liability, does not divest the assured of all insurable interest. Gordon v. Mass. F. Mar. Ins. Co., 2 Pick. 258.
And in Strong v. The Manufacturers Ins. Co. it was decided, that the mortgager of a house, the equity of redemption of which was sold on execution, has an insurable interest in the house so long as his right to redeem
And it would seem to be well settled law, that a policy will not upon common law principles, aside from statute provisions, become wholly inoperative so long as the assured retains any insurable interest in the property insured ; but that the same will remain valid, and protect such remaining interest of the assured, to the extent of the value of the property, not exceeding the sum insured. It is only in a case in which the interest of the assured becomes entirely extinct, that the policy becomes altogether void. Parting with a portion of his interest, will not work such a result. Strong v. Manufacturers Ins. Co. ; Gordon v. Mass. F. & Mar. Ins. Co.; Stetson v. Mass. Mut. F. Ins. Co., before cited.
In the case of the Ætna Ins. Co. v. Tyler, 16 Wend. 385, it was said, “ If the assured sells the property and parts with all his interest therein before the loss happens, there is an end of the policy, unless it was assigned to the purchaser with the assent of the company; or if he retains but a partial interest, it will only protect such insurable interest as he had in the property at the time of the loss.”
Was it the design of the statute to alter the common law principle governing the rights of the assured in cases like the present, or was it the design only to establish by positive enactment the law as already existing at the date of the act ? Was it intended to change the common law in the particular under consideration ?
The authorities cited would seem to warrant the con
The authorities that have been referred to upon this question deserve consideration, as tending strongly to establish the proposition, that a mortgage of the property insured, after the date of the policy, does not impair the rights of the assured, notwithstanding the clause in the act that has been relied on by the trustees ; and there are reasons for so holding. But the question may be left undecided, because whatever conclusion might be arrived at with regard to it, there remains another ground upon which the trustees must be discharged.
The policy was made to the Rogers, father and son, and to Head jointly. The two Rogers appear to have been partners, and upon the death of one his interest survived to the other. They were joint debtors likewise upon the security which is the subject of this suit. But in the contract" with the New-Hampshire Mutual Fire Insurance Company, they were joined with Head, and apparently can not pursue their remedy upon the policy otherwise
The clear inference from it is, that the trustees can not bo charged as such in an action in which Head is not joined as a party defendant, and so on the authorities.
In Fiske v. Herrick, 6 Mass. 271, it appeared that the trustee was not indebted to Herrick alone, but to Smith & Herrick, a firm; and it was hold that the trustee was not chargeable.
So in Upham v. Naylor & a., 9 Mass. 490, Lodge was summoned as the trustee of the defendants, and it appeared that he had in his hands the proceeds of goods consigned to him by two of the defendants and one Bathwaite. The trustee was discharged.
It would not be easy, perhaps it would be impossible in a proceeding like the present, to adjust the claims of the various parties so as to sever the interest of the principal defendant from the common interest of all the parties assured or the survivors. There is no reason to suppose that there has been any such severance by the parties themselves, and there seems no other course but to discharge the trustees. Parker v. Guillow Tr., 10 N. H. 104.
Trustees discharged.