Thompson v. Phenix Ins Co of Brooklyn

• Decision Date: 19 May 1890
• Parties: THOMPSON, Receiver, v. PHENIX INS. CO. OF BROOKLYN, N. Y
• Court: U.S. Supreme Court

136 U.S. 287

10 S.Ct. 1019

34 L.Ed. 408

THOMPSON, Receiver, v. PHENIX INS. CO. OF BROOKLYN, N. Y.

May 19, 1890.

Sam'l Shellabarger and J. M. Wilson, for appellant.

Robert Rae, for appellee.

HARLAN, J.

This suit was brought July 10, 1885, by the appellant, who is the receiver in the case of Holladay v. Holladay in the circuit court of the county of Multnomah, in the state of Oregon. He seeks a decree reforming a policy of insurance issued by the Phenix Insurance Company of Brooklyn, N. Y., on the 21st day of April, 1884, and which purported, in consideration of the sum of $300, and subject to the conditions named in the policy, to insure for the term of one year, 'E. S. Kearney, receiver for Holladay v. Holladay, against loss or damage by fire to the amount of five thousand dollars,' of which sum, $4,000 was on one-half interest in the Clarendon Hotel, in Portland, Or., and $1,000 on a like interest in thefur niture in the hotel building, and, the policy being reformed, for a decree for the amount insured, with interest from the time when the loss was payable. The loss occurred on the night of May 19, 1884. A demurrer to the original bill was sustained. 25 Fed. Rep. 296. Subsequently an amended bill was filed, to which also a demurrer was sustained and the suit dismissed. From that decree the present appeal was prosecuted.

By the terms of the policy the amount of the loss was payable 60 days after the required proofs were received at the company's office in Chicago, and the loss ascertained in accordance with the conditions prescribed, unless the property was replaced, or the company gave notice of their intention to rebuild or repair the damaged premises.

The policy contained these among other provisions: '(1) * * * If the property be sold or transferred, or upon the commence- ment of foreclosure proceedings against, or sale under a trust-deed of, or the existence of a judgment lien upon, or the issue or levy of an execution against, any kind of property herein described, or if the property be assigned under any bankrupt or insolvent law, or any change take place in title or possession, except in case of succession by reason of the death of the assured, whether by legal process or judicial decree, or voluntary transfer or conveyance, * * * then, and in every such case, this policy is void.'

'(4) If the interest of the assured in the property be any other than the absolute feesimple title, or if any other person or persons have any interest whatever in the property described, whether it be real estate or personal property, * * * it must be so represented to the company, and so expressed in the written part of this policy; otherwise the policy shall be void. * * * Note. By 'property held in trust,' is intended property held under a deed of trust, or under the appointment of a court of law, or property held as collateral security, in which latter case this company shall be liable only to the extent of the interest of the assured in such property.'

'(9) Persons sustaining loss or damage by fire shall forth with give notice in writing of said loss to the company, and as soon thereafter as possible render a particular account of such loss, signed and sworn to by them, stating whther any, and what, other insurance had been made on the same property, giving copies of the written portion of all policies thereon.

'(10) * * * It shall be optional with the company to repair, rebuild, or replace the property lost or damaged with like kind and quality within a reasonable time, giving notice of their intention to do so within sixty days after receipt of the proofs herein required, and until such proofs, plans and specifications, declarations and certificates, are produced, and examinations and arbitrations permitted by the claimant, and had, the loss shall not be payable.'

'(13) It is furthermore hereby expressly provided and mutually agreed that no suit or action against this company for the recovery of any claim by virtue of this policy shall be sustained in any court of law or chancery until after an a ward shall have been obtained fixing the amount of such claim in the manner above provided, nor unless such suit or action shall be commenced within twelve months next after the date of the fire from which such loss shall occur; and, should any suit or action be commenced against this company after the expiration of the aforesaid twelve months, the lapse of time shall be taken as conclusive evidence against the validity of such claim, any statute of limitations to the contrary notwithstanding.'

It will not be necessary to set out the allegations of the original bill, because the case turns upon the question whether the amended bill states facts sufficient to constitute a cause of action. The latter makes substantially the following case:

From the 17th of November, 1883, up to and including the 19th of May, 1884, Edward S. Kearney was the receier in the abovesuit of Holladay v. Holladay. From the first of those dates continuously to the time of the fire, the hotel building, with its furniture and the land upon which it stood, was in the joint possession and under the control of Kearney, as receiver, and of R. Koehler and J. N. Dolph, the owners of one undivided half interest; the title to the remaining half being involved in the above suit, and in the possession and under the control of Kearney as receiver. By the order appointing the receiver, he was directed and empowered to take possession of, manage, control, and keep the property safely, and for the best interests of the parties who should be adjudged entitled thereto, or as the court might direct. Kearney being desirous to effect insurance for himself and his successors in the receivership, as well as for the benefit of whom it might concern, on an undivided half interest in the hotel building for the sum of $4,000, and on a like interest in the furniture for $1,000, pending the suit of Holladay v. Holladay, and having been solicited by the defendant to take insurance in his capacity as receiver, it was understood and agreed on the 21st of April, 1884, between the company and himself as receiver, that the former would insure, as above indicated, against loss or damage by fire, for the full term of one year from April 27, 1884, noon, making the loss and the policy payable to him as receiver, and to his successors, as well as for the benefit of whom it might concern, and that it would take from him, as receiver, the sum of $300 as premium. On the day last named the company, with the intent to carry this agreement into effect, made the policy in question, and delivered in to Kearney. At the time of this agreement, it was distinctly informed that the property agreed to be insured was in dispute in the above suit, and that Kearney had no interest in it except as receiver. Nevertheless, by accident and mistake of both Kearney and the company, the loss was made payable to Kearney, receiver in the above suit, instead of to the receiver and his successors, and for the benefit of whom it might concern; and the policy was issued without the usual clause commonly inserted in such policies, and agreed upon, namely, that the insurance was effected for whom it might concern. It was delivered by the company, and received by Kearney, in the full belief and understanding that the interests of the parties to that suit were insured and protected by it in accordance with the direction of Kearney, and with the above understanding and agreement between him and the company. The company did not at once collect the premium, but extended the customary credit therefor to the receiver as such, and not otherwise.

On the 14th of May, 1884, an order was made accepting the resignation of, and removing, Kearney as receiver, and appointing the present plaintiff in his stead; such resignation to take effect when the latter duly qualified, and entered upon the performance of his duties, as receiver. The order directed the delivery to plaintiff, upon his qualification, of all property held or controlled by Kearney as receiver, which embraced, among other things, the policy in suit, and the property insured, or intended to be thereby insured. The plaintiff qualified as receiver on the 19th of May, 1884, but the fire resulting in the loss sued for occurred before Kearney surrendered the possession and control of the property. Subsequently to May 19, 1884, the policy was delivered by Kearney to the plaintiff.

The plaintiff immediately after the fire delivered to the company written notice of it, and as soon as possible there- after, and more than 60 days prior to the commencement of this suit, rendered under oath a particular account of the loss, in which was included a statement of other policies, with the written portions thereof. The proofs of loss were delivered to the company, and were accepted and retained by it without making any objections to them.

About 30 dys after the fire, and after the acceptance of the proofs of loss, the plaintiff threatened to commence suit, and informed the company's agent that he would do so. The defendant thereupon, by its duly-authorized agents, stated to the plaintiff that, under the provisions of the policy, no suit could be brought until 60 days had elapsed after the receipt of the proofs of loss, and directed the plaintiff's attention to the provisions of the policy. These agents then and there further represented to the plaintiff that no question was made as to the loss or its payment, except that the company was considering the fact that a change had occurred in the receivership. They also asserted and represented to him that they had written to the company advising payment, and informed him that it would undoubtedly so do. Afterwards, on the 27th of June, 1884, the defendant, by its agents, demanded the payment of the premium upon the policy of insurance, assuring the plaintiff at the time that the loss would undoubtedly be paid as soon as the...