The Hartford Fire Ins. Co. v. Olcott

• Decision Date: 03 February 1881
• Citation: 97 Ill. 439,1881 WL 10426
• Parties: THE HARTFORD FIRE INSURANCE COMPANYv.GEORGE OLCOTT.
• Court: Illinois Supreme Court

97 Ill. 439

1881 WL 10426 (Ill.)

THE HARTFORD FIRE INSURANCE COMPANY

v.GEORGE OLCOTT.

Supreme Court of Illinois.

Filed at Ottawa Feb. 3, 1881.

OPINION TEXT STARTS HERE

APPEAL from the Appellate Court for the Second District;--heard in that court on appeal from the Circuit Court of Peoria county; the Hon. DAVID MCCULLOCH, Judge, presiding.

George Olcott brought assumpsit, in the Tazewell circuit court, against the Hartford Fire Insurance Company on a policy of insurance. The clauses obligatory upon the company run as follows:

“THE HARTFORD FIRE INSURANCE COMPANY.

Hartford, Connecticut.

+-----------------+
                ¦No. 1365. ¦$5000.¦
                +-----------------+
                

By this policy of insurance, in consideration of the receipt of $75, do insure Benjamin S. Prettyman, of Pekin, for the amount of $5000, for the term of five years, as follows, viz: $3500 on his two-story brick, metal roofed dwelling-house, occupied by assured as his family residence; $1500 on his two brick barns, three hundred feet north of dwelling, both situated on the north-west corner of the north-east half of section 35, township 25 north, range 5 west, of the third principal meridian, adjoining the city of Pekin, Tazewell county, Illinois.

$10,000 other insurance permitted. Loss, if any, under this policy, payable to George Olcott, trustee for the Connecticut River Savings Bank, in Charleston, New Hampshire, to secure loan of $10,000.

Term, five years; amount, $5000; rate, 1 1/2; premium, $75.

Against all such immediate loss or damage sustained by the assured or his legal representatives, as may occur by fire to the property specified, not exceeding the sum insured, nor the interest of the assured in the property, except as hereinafter provided, from the 16th day of November, 1872, at 12 o'clock, noon, to the 16th day of November, 1877, at 12 o'clock, noon, to be paid sixty days after due notice and satisfactory proofs of the same, made by the assured, are received at the office of this company, in Chicago.”

The conditions in the policy relied upon in defence were the following:

“In no case shall the claim be for a greater sum than the actual damage to or cash value of the property at the time of the fire, nor shall the assured be entitled to recover of this company any greater proportion of the loss or damage than the amount hereby insured bears to the whole sum insured on said property, whether such other insurance be by specific or by general or floating policies, and without reference to the solvency or the liability of other insurers. * * * Damage to property not totally destroyed, unless the amount of said damage is agreed upon between the assured and the company, shall be appraised by disinterested and competent persons, mutually agreed upon by the parties. * * * Re-insurance to be on the basis, that in no event will this company be liable for a sum greater than such portion hereby re-insured bears to the whole sum insured by the company re-insured, and, in case of loss, this company to pay pro rata, at and in the same time and manner as the company re-insured.”

Annexed to the policy, and a part thereof, was the mortgage clause set out in the opinion.

The general issue was pleaded, and also several special pleas, to which demurrer was sustained.

The cause was removed, by change of venue, to Peoria county, by agreement of parties. The cause was heard before said last named court, at its May term, 1879, and, by agreement of parties, a jury was waived, and the issues were submitted to the court, who thereupon found for the plaintiff, and assessed his damages at $3745, for which amount, after overruling a motion for a new trial, judgment was rendered. Proper objections and exceptions were made or taken during the various stages of the trial to raise the questions here to be passed upon, and appeal was prayed and perfected to the Appellate Court of the Second District. That court, at its December term, 1879, rendered a judgment affirming the judgment of the circuit court, and this record is brought here by appeal, for the purpose of procuring a reversal of that judgment. The proofs introduced on the trial established that on the 16th of November, 1872, Benjamin S. Prettyman executed his promissory note, as recited in the opinion, to the Connecticut River Savings Bank; that on the same day he and his wife executed a deed of trust to George Olcott, as trustee, to secure that note, conveying the property, and upon the terms and conditions recited in the opinion; and that said Prettyman also paid the premiums, and the policies of insurance were issued and delivered to the bank, as is likewise recited in the opinion. Prettyman paid the premium out of the money he borrowed from the bank. He says it was all done at the same time and in the same transaction. On the 1st of May, 1876, other insurance, to the amount of $20,000, in four policies, one each for $5000, in the Underwriters, in the Niagara, in the Fire Association, and in the German American, was procured by and issued to Benjamin S. Prettyman and Sarah A. Prettyman. Each of these included $2750 on the dwelling house, and covered certain household furniture and chattels not covered by the first two policies. These last policies contained no mortgage clause, nor did they, in anywise, make reference to a mortgage.

In the early morning of the 16th of November, 1877, the dwelling house was destroyed by fire. Notice and proofs of loss were furnished the insurance company, and Prettyman and wife made claim on all six of the companies in which policies had been taken out. They entered into an agreement with these companies to appraise the amount of damages to which they were entitled, and left it to two persons, mutually selected, to make such appraisal. The persons thus selected appraised the total damages at $11,374.48, making the proportion of the Hartford and Phœnix companies $2211.71 each, and, as between these parties, the loss was adjusted upon that basis, but neither Olcott nor the Connecticut River Savings Bank was party to the agreement to make this appraisal, nor acquiesced therein after it was made. The other facts necessary to an understanding of the case appear in the opinion.

Messrs. PADDOCK & IDE, for the appellant:

1. The contract declared on and offered in evidence was a simple contract between appellant and B. S. Prettyman, for the payment of money by appellant to Prettyman, and not to appellee. It was based on a consideration moving from Prettyman alone, and gave no right of action at law in the name of appellee. Wood on Fire Ins. 817, sec. 488; 1 Addison on Contracts, 50; Dicey on Parties to Actions, 81, et seq.; New England Ins. Co. v. Wetmore, 32 Ill. 242; Illinois Mut. Ins. Co. v. Stanton, 57 Id. 354; Granger v. Howard Ins. Co. 5 Wend. 202; Blymire v. Boistle, 6 Watts, 182; Martin v. Franklin Ins. Co. 38 N. J. L. 140; Grosvenor v. Atlantic. Ins. Co. 17 N. Y. 391; Clay Ins. Co. v. Huron, Salt & L. Co. 31 Mich. 346; Hartford Fire Ins. Co. v. Davenport, 37 Id. 609; St. Paul Ins. Co. v. Johnson, 77 Ill. 598; Westchester Ins. Co. v. Foster, 90 Id. 121; Continental Ins. Co. v. Hulman & Cox, 92 Id. 145; Chamberlain v. New Hampshire Ins. Co. 55 N. H. 249.

2. Passing by the question whether appellee could rightfully sue at law in his own name, we say the special pleas presented a defence to the suit. In sustaining a demurrer to these pleas, the circuit court held the appellee exempt from the obligation of the contract sued on. The first error assigned relates to this branch of the case. Hulman et al. v. Continental Ins. Co. 92 Ill. 145; May on Ins. sec. 13.

3. The third and fourth pleas admitted a cause of action, but alleged new matter in bar of the suit, viz: as to all in excess of the amount awarded, by the appraisal, and as to the amount awarded, tender and refusal. The second plea was new matter. None of them amounted to the general issue, because none of them went in denial of the declaration. Gould's Pl. chap. 6, secs. 94, 95; Knœbel v. Kircher, 33 Ill. 308; Cook v. Scott, 1 Gilm. 333; Abrams v. Pomeroy, 13 Ill. 133; Strader v. Snyder, 67 Id. 404; White v. Cloyes, 32 Id. 325.

4. As the policy provides that in no case shall the claim be for more than the actual damage to the property, and that the assured shall be entitled to recover of the appellant only that proportion of the damage which the sum insured by the appellant bears to the whole sum insured on the property, this binds appellee to observe the principle of indemnity, which is the first principle of the law of insurance. The result thus far, as we think, carries the damages to be paid by appellant beyond the point of indemnity.

5. The amount of insurance of 1876 was a part of the whole sum insured on the property, within the meaning of the policy sued on. Continental Ins. Co. v. Hulman & Cox, 92 Ill. 145; Mussy v. Atlas Ins. Co. 14 N. Y. 79.

6. On the trial, under the general issue, there was a variance between the contract alleged and that proved, in this: It was alleged that the consideration was paid by ( i. e. for) appellee. The proof was that Prettyman paid it for himself. The averment that the premium was paid by appellee means that Prettyman advanced it on the credit of appellee, to be reimbursed by the latter, which is not true. 1 Saund. Pl. & Ev. 194.

Messrs. STEVENS, LEE & GALLAGHER, and Messrs. COHRS & GREEN, for the appellee:

If the contract was made for the benefit of Olcott, the plaintiff, he can maintain an action upon it. St. Paul Fire and Marine Ins. Co. v. Johnson, 77 Ill. 600; Continental Ins. Co. v. Hulman & Cox, 92 Id. 145; Motley v. Mfg. Ins. Co. 29 Me. 338; Gantzert v. Hoge, 73 Ill. 30; Moore v. House, 64 Id. 163; Newman v. Sprg. Fire and Marine Ins. Co. 17 Minn. 125.

The trustee held this insurance as a security, which Prettyman could not, by any act or omission, impair. We insist that any construction of the first section of the mortgage provision, exempting the trustee interest from any act or neglect of...