Jeremiah Carpenter v. Providence Washington Insurance Co

• Citation: 16 Pet. 495,41 U.S. 495,10 L.Ed. 1044
• Parties: JEREMIAH CARPENTER, Plaintiff in error, v. The PROVIDENCE WASHINGTON INSURANCE CO., Defendant in error
• Decision Date: 01 January 1842
• Court: United States Supreme Court

41 U.S. 495

16 Pet. 495

10 L.Ed. 1044

JEREMIAH CARPENTER, Plaintiff in error, v. The PROVIDENCE WASHINGTON INSURANCE CO.,

Defendant in error.

January Term, 1842

ERROR to the Circuit Court of Rhode Island.

The case was argued by Whipple, for the plaintiff in error; and by Green and Sergeant, for the defendants in error.

STORY, Justice, delivered the opinion of the court.

This is a writ of error to the circuit court for the district of Rhode Island. The original action was brought by Carpenter, the plaintiff in error, against the Providence Washington Insurance Company, the defendants in error, upon a policy of insurance, underwritten by the insurance company, of $15,000, 'on the Glenco Cotton Factory, in the state of New York,' owned by Carpenter, against loss or damage by fire. The policy was dated on the 27th of September 1838, and was to endure for one year. Among other clauses in the policy are the following: 'And provided further, that in case the insured shall have already any other insurance on the property hereby insured, not notified to this corporation, and mentioned in or indorsed upon this policy, then this insurance shall be void and of no effect.' 'And if the said insured, or his assigns, shall hereafter make any other insurance on the same property, and shall not with all reasonable diligence give notice thereof to this corporation, and have the same indorsed on this instrument, or otherwise acknowledged by them in writing, this policy shall cease and be of no further effect. And in case of any other insurance upon the property hereby insured, whether prior or subsequent to the date of this policy, the assured shall not, in case of loss or damage, be entitled to demand or recover on this policy any greater portion of the loss or damage sustained than the amount hereby insured shall bear to the whole amount insured on the said property.' 'The interest of the assured in this policy is not assignable, unless by consent of this corporation, manifested in writing; and in case of any transfer or termination of the interest of the assured, either by sale or otherwise, without such consent, this policy shall henceforth be void and of no effect.' Annexed to the policy are the proposals and conditions on which the policy is asserted to be made, and among them is the following: 'Notice of all previous insurances upon property insured by this company shall be given to them, and indorsed on the policy, or otherwise acknowledged by the company in writing, at or before the time of their making insurance thereon, otherwise the policy made by this company shall be of no effect.

The declaration averred, that during the continuance of the policy, he, Carpenter, was the owner of the property by the policy insured, and was interested in said property to the whole amount so insured by the company; and that on the 9th of April 1839, the factory was totally destroyed by fire, of which the company had due notice and proof. The cause came on for trial upon the general issue, and a verdict was found for the defendants. The plaintiff took a bill of exceptions to certain instructions refused, and other instructions given by the court in certain matters of law arising out of the facts in proof at the trial; and judgment having been given upon the verdict for the defendants, the present writ of error has been brought to ascertain the validity of these exceptions.

The facts which were in proof at the trial were very complicated, but those which are material to the present inquiry will be, as briefly as they may be, here stated. The premises were originally owned in equal moieties by Egbert and Epenetus Reed. In June 1835, Epenetus Reed conveyed his moiety to H. M. Wheeler, who gave a bond and mortgage on the premises to secure $8000 of the purchase-money to Epenetus Reed. On the 17th of October 1836, Egbert Reed sold his moiety of the premises to Samuel G. Wheeler, and the latter thereupon gave a bond and mortgage for the sum of $10,000 (the purchase-money) to Epenetus Reed; and on the same day, he, Wheeler, made an additional agreement, under seal, with Epenetus Reed, by which he covenanted that he would effect a policy of insurance upon the property, in the name of himself, or of himself and Henry M. Wheeler, for the sum of least $10,000, and assign the same to him, Reed, as collateral security to the said last bond and mortgage, and would annually renew the policy, or effect a new one, and keep each assigned to Reed as security, in such way and manner as that the said property shall be insured for at least the sum of $10,000, and the policy held by him as collateral security as aforesaid; and if he neglected so to insure and assign for the space of ten days, then, that Reed might do the same, at the expense of Wheeler, and add the premium which he might be compelled to pay, with interest thereon, to his said bond and mortgage, and to collect the same therewith, or that Wheeler would pay the same to him in such other way as he might desire.

From the 17th of October 1836, to the 6th of December 1837, Henry M. Wheeler and Samuel G. Wheeler continued to own the factory, in equal moieties, and transacted business under the firm of Henry M. Wheeler & Company. On that day, Samuel G. Wheeler sold his moiety to Jeremiah Carpenter. On the 18th of April 1838, Henry M. Wheeler sold and conveyed his moiety to Carpenter, who thus became the sole owner of the entire property. The last conveyance declared the property subject to a mortgage on the premises from Henry M. Wheeler and wife, dated in June 1835, to Epenetus Reed, on which there was then due $6000, which Carpenter assumed to pay. There had been a prior policy on the premises in the Washington Insurance office, which, upon Carpenter's becoming the sole owner, the company agreed to continue for account of Carpenter, and in case of loss, the amount to be paid to him. That policy expired on the 27th of September 1838, the day on which the policy, upon which the present suit is brought, was effected.

It is proper further to state, that other policies on the same factory had been effected, and renewed from time to time, from December 12th, 1836, for the benefit of the successive owners thereof, by another insurance company in Providence, called the American Insurance Company; and among these was a policy effected by way of renewal, on the 14th of December 1837, in the name of Henry M. Wheeler & Company, for $6000, for the benefit of Henry M. Wheeler and Carpenter (who were then the joint owners thereof), payable, in case of loss, to Epenetus Reed. The sale by Henry M. Wheeler to Carpenter, on the 18th of April 1838, of his moiety, having been nofitied to the American Insurance Company, the latter agreed to the assignment; and the policy thenceforth became a policy for Carpenter, payable, in case of loss, to Epenetus Reed. And on the 23d of May 1838, Carpenter transferred all his interest in the policy to Epenetus Reed. The policy, thus effected on the 14th of December 1837, was (as the Washington Insurance Company assert) not notified to them at the time of effecting the policy made on the 27th of September following, and declared upon in the present suit; nor was the same ever mentioned in, or indorsed upon, the same policy; and upon this account, the company insist, that the present policy is, pursuant to the stipulations contained therein, utterly void.

Subsequently, viz., on the 11th of December 1838, the American Insurance Company renewed the policy of 14th of December 1837, for Carpenter, and at his request, for one year. This renewed policy was never notified to the Washington Insurance Company nor acknowledged by them in writing; nor does it appear ever to have been actually assigned to Epenetus Reed, down to the period of the loss of the factory by fire. On this account also, the Washington Insurance Company insist, that their policy of the previous 27th of September 1838, is, according to the stipulations therein contained, utterly void.

It seems to have been admitted, although not directly proved, that a suit was brought upon the policy of the 14th of December 1837, at the American Insurance office, after the loss, by Carpenter, as trustee of or for the benefit of reed, for the amount of the $6000 insured thereby; and that at the November term 1839, of the circuit court, the company set up as a defence, that there was a material misrepresentation of the cost and value of the property in the factory insured, made to them at the time of the original insurance; and it being intimated by the court, that if such was the fact, it would avoid the policy, the plaintiff acquiesced in that decision, and discontinued or withdrew the action, before verdict.

The instructions prayed and refused, and also the instructions actually given by the court, are fully set forth in the record. It does not seem important to the opinion which we are to pronounce, to recite them at large, in totidem verbis; since the points on which they turn admit of a simple and exact exposition.

The first instruction asked the court, in effect, to say, that the original policy of the American Insurance Company, made in December 1836, and the several renewals thereof, although made in the name of the Wheelers (the mortgagors), being in fact for the use and benefit of Epenetus Reed, the mortgagee, were, for all substantial purposes, the policy of Reed, and could never inure to the benefit of the Wheelers, or of Carpenter; and that neither the Wheelers nor Carpenter had any any such interest therein as rendered it incumbent on them to give any notice of its existence to the Washington Insurance Company; and that it was, to all intents and purposes, as if Reed had effected the said policy in his own name, upon his specific interest as mortgagee. This instruction the court refused to give; and on the contrary, instructed the jury, that as by the memorandum made on that policy, on the 14th of December...