Lindley v. Union Farmers' Mut. Fire Ins. Co.

• Decision Date: 26 April 1876
• Citation: 65 Me. 368
• Parties: JOHN LINDLEY v. UNION FARMERS' MUTUAL FIRE INSURANCE COMPANY.
• Court: Maine Supreme Court

65 Me. 368

JOHN LINDLEY v. UNION FARMERS' MUTUAL FIRE INSURANCE COMPANY.

Supreme Judicial Court of Maine.

April 26, 1876

1875.

ON FACTS AGREED.

ASSUMPSIT on a policy of insurance against fire.

The plaintiff, July 1, 1869, made written application to the defendant company, for insurance upon his dwelling house and outbuildings, valued at $800, and upon his two barns valued at $300 each; and the same day received from the company a policy running four years, for $500 on his dwelling house and adjoining buildings, and for $50 upon each of his barns.

On January 1, 1873, the plaintiff applied in writing to the Hartford Fire Insurance Company for insurance upon the same and other property, (representing that there was no insurance thereon; ) upon house, ell and shed, valued at $2000, upon stable valued at $800, upon furniture and apparel valued at $1000 and upon organ valued at $125; and upon the same day received from the Hartford Company a policy for $1300 on his house, ell and shed, for $500 on household furniture and apparel, $100 on organ, and $200 on barn.

The first policy contained this provision: " 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 company, and have the same indorsed on this instrument, or otherwise acknowledged by them in writing, this policy shall cease and be of no effect," & c.

The Hartford policy contained a provision of forfeiture, " if the assured shall have, or shall hereafter make, any other insurance on the property hereby insured, whether such other insurance is valid or invalid, without the consent of the company written hereon."

Neither of the companies received the notice, or gave the consent provided in the policies.

June 17, 1873, the " house and outbuildings" described in the policies, were suddenly destroyed by fire.

The plaintiff brought suit upon the Hartford policy, which was entered March term, 1874, answered to by the company, and settled in July, 1874, for $1000 paid by the company to the plaintiff. Whereupon the Hartford policy was canceled and surrendered, and the action entered neither party at the September term, 1874.

The writ in this case was dated August 10, 1874; the plea was the general issue, and the case was made law on facts agreed substantially as stated above.

D N. Mortland & G. M. Hicks, for the plaintiff.

A. S. Rice & O. G. Hall, for the defendants.

I. The cases Jackson v. Mass. Mut. Fire Ins. Co., 23 Pick. 418; Clark v. New England Mut. Fire Ins. Co., 6 Cush. 342; and Hardy v. Union Mut. Fire Ins. Co., 4 Allen 217; which establish in Massachusetts, the rule of law, that to avoid a policy containing a clause against subsequent insurance without notice, the subsequent insurance must be by a valid and legal policy, are in direct conflict with Carpenter v. Providence Washington Ins. Co., 16 Pet. 495; and Bigler v. New York Ins. Co., 22 N.Y. 402. And that rule has received no countenance in this state except in the dictum of Judge Tenney, in Philbrook v. New England Mut. Fire Ins. Co., 37 Me. 137. Its adoption in this state is still an open question; and in view of the fraudulent practices to which it is likely to lead, it is respectfully submitted that it is good law, as well as the safer policy, to hold, with the supreme court of the United States, that if the second policy, at the time it was made, was treated by all the parties thereto as a valid and subsisting policy, and has never in fact been avoided, then the policy declared on is void.

II. But however the court might decide the foregoing proposition, the plaintiff, in this case by bringing suit upon the second policy, and collecting it, is now concluded, upon the principle of election, from denying its validity. " The general rule is, that a person cannot accept and reject the same instrument." 2 Story's Eq. Jur., § 1077, n. 2. " This same rule of election applies to every species of right." Weeks v. Patten, 18 Me. 42. It is analogous to estoppel, and constitutes a rule of law. In order to enable a court of law to enforce the principle, the party must have acted upon an instrument in such a manner as to be deemed concluded by what he has done, that is to have elected. 2 Story's Eq. Jur., § 1080. Smith v. Smith, 14 Gray 532. Weeks v. Patten, 18 Me. 42. Smith v. Guild, 34 Me. 443.

The only cases to be found which sustain such a proposition are Philbrook v. N. E. Mut. Fire Ins. Co., 37 Me. 137, where the abovementioned dictum stands absolutely unsupported by authority, and Hardy v. Union Mut. Fire Ins. Co., 4 Allen 217, which is based solely upon the dictum. In neither of these cases, however, did the fraud of over-insurance, which is a distinctive feature of this case, exist. And in the latter case the court say, that the doctrine of estoppel does not apply, because the defendants " have not been injuriously affected" by the second policy. But in the case at bar the policy contains another clause, by the terms of which the plaintiff could only recover of defendants the proportion of the loss sustained, which the amount insured by their policy bore to the whole amount insured; so that defendants are injuriously affected by the second policy, first, by being deprived of the opportunity to cancel their policy, if they so elected, or, second, by being deprived of the benefit of the reduction of plaintiff's claim in the proportion above stated.

BARROWS J.

The defendants place their defense wholly on the ground that the plaintiff, in violation of the terms of the policy on which he declares, made a subsequent insurance upon the same property, and did not give notice thereof with all reasonable diligence to the defendant company, and have the same indorsed on his policy, or otherwise acknowledged by them in writing.

It is admitted by the defendants, that the buildings insured were acciden tally destroyed by fire before the expiration of the term for which they were insured, and that preliminary proof of loss was received by them without objection. It is admitted by the plaintiff, that some mon ths before the fire he procured a policy in the Hartford Fire Insurance Company for a term of three years upon these buildings and certain personal property therein contained, for $2100, $1500 of which was on the buildings, upon which policy, after the fire, he brought suit, which the Hartford Company compromised, after it had been one term in court, by the payment of $1000, for which plaintiff canceled and surrendered his policy in that company. But the plaintiff contends that his policy in the Hartford Company was invalid, and that he could not have compelled that company by law to pay his loss thereon, on account of a stipulation which it contained, that " if the assured shall have, or shall hereafter make any other insurance on the property hereby insured, whether such other...