15 A. 353 (Vt. 1888), Lemuel Smith And Emily A. Smith, His Wife v. the Niagara Fire Insurance Co.

Citation:15 A. 353, 60 Vt. 682
Opinion Judge:TAFT
Party Name:LEMUEL SMITH AND EMILY A. SMITH, HIS WIFE v. THE NIAGARA FIRE INSURANCE COMPANY
Attorney:Haskins & Stoddard, for the defendant.
Case Date:February 01, 1888
Court:Supreme Court of Vermont
 
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Page 353

15 A. 353 (Vt. 1888)

60 Vt. 682

LEMUEL SMITH AND EMILY A. SMITH, HIS WIFE

v.

THE NIAGARA FIRE INSURANCE COMPANY

Supreme Court of Vermont

February 1, 1888

Page 354

FEBRUARY TERM, 1888

ASSUMPSIT upon an insurance policy. Plea, general issue. Trial by jury, September Term, 1887, ROSS, J., presiding. Verdict for the plaintiffs.

Judgment reversed, and cause remanded.

Haskins & Stoddard, for the defendant.

OPINION

TAFT

Page 355

I. The defendant objected to an inquiry of a witness upon the subject of damages. Conceding the question to have been improper, the exceptions do not show that it was answered. To avail the defendant, it must so appear, and that the answer was prejudicial to it. Carpenter v. Corinth, 58 Vt. 214.

II. The assured warranted that there was no incumbrance upon the property. There was then upon record, an undischarged mortgage for eight hundred dollars, with accrued annual interest for sixteen years. The plaintiffs claimed that the presumption of payment applied, fifteen years having then elapsed since the date of the note and mortgage. The note matured in July, 1875, and it was at the latter date that the fifteen years began to run, so as to afford a presumption of payment from lapse of time. The fifteen years have not yet expired, the presumption, therefore, did not arise.

[60 Vt. 689] III. Was the undischarged mortgage an incumbrance within the meaning of an insurance contract? It has sometimes been so held, Warner v. Middlesex Mut. Ass. co., 21 Conn. 444; Muma v. Niagara, etc., Ins. Co. 22 U. Can. (Q. B.) 214, but we think the doctrine generally prevails, that if the mortgage debt has been paid, the undischarged mortgage is not an incumbrance, Merrill v. Agri'l Ins. Co., 73 N.Y. 452; Hawkes v. Dodge Co. M. Ins. Co., 11 Wis. 188, as cited in Bates Dig. Fire Ins. Dec. 256, and we so hold.

IV. The assured warranted that they, at the time of the contract, had "not omitted to state to the company any information material to the risk." The undischarged mortgage was held by Mrs. Eames, and she had prior to that time, secretly and voluntarily destroyed the note, but the assured had not been informed of that fact, so that they must have believed that the mortgage debt was then a valid subsisting lien upon the property. No payment had been made on either the principal or interest. The more important question in respect to the mortgage is, whether the failure to state to the company that they believed the property was mortgaged was not an omission to state information material to the risk. Statements as to incumbrances are material; they are made so by the policy; they have regard to the risk. The object of inquiry in respect thereto, is to ascertain the interest of the applicant in the property, so that the insurer can take into consideration the interest the applicant has in its preservation. He may have none, so that fire may occur from his neglect, or his active participation in its origin. The value of the property burned as found by the jury was eight hundred and...

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