Columbus Ins. Co. v. Walsh

• Citation: 18 Mo. 229
• Parties: COLUMBUS INSURANCE COMPANY, Respondent, v. WALSH, Appellant.
• Decision Date: 31 March 1853
• Court: United States State Supreme Court of Missouri

18 Mo. 229

COLUMBUS INSURANCE COMPANY, Respondent,

v.WALSH, Appellant.

Supreme Court of Missouri.

March Term, 1853.

1. An action lies to recover back money paid by an insurance company, in ignorance of an insurance subsequently effected, which avoided the policy.

2. The fact that the party in whose name the insurance was effected and to whom the loss was paid, merely acted as agent of the real owner, and had paid over to him, will not prevent his liability back to the company, unless he disclosed his agency before payment.

3. The fact that an agency of a foreign insurance company fails to take out a license according to law, will not prevent the company from maintaining or defending a suit.

Appeal from St. Louis Circuit Court.

This was an action brought by the Columbus Insurance Company against Edward Walsh, to recover back money paid upon a policy, after a loss, in ignorance of a subsequent insurance upon the same property, which avoided the policy.

The company, by its policy dated February 22, 1849, insured the firm of J. & E. Walsh, of which the defendant is surviving partner, in the sum of six thousand dollars, upon one-fourth of the steamboat Marshal Ney. The amount insured was four-fifths of the valuation of the said one-fourth. There was a clause in the policy which avoided it, if any other insurance should be obtained on the same interest, so as to increase the insurance beyond six thousand dollars. The firm of J. & E. Walsh held the legal title to three-fourths of the boat.

On the 24th of February, 1849, J. & E. Walsh effected an insurance of four thousand five hundred dollars upon one-fifth of three-fourths of said boat, in the Tennessee Marine and Fire Insurance Company. This policy recited a prior insurance of eighteen thousand dollars on the said three-fourths.

In October, 1849, the Marshal Ney became a total loss by a peril insured against, and J. & E. Walsh abandoned to the plaintiff, claiming the whole amount of the insurance. The loss (abating two and a half per cent.) was accordingly paid by the agent of the company, who then had no knowledge of the subsequent insurance. The sum of two hundred and one dollars was paid by balancing a premium account between the parties, and the balance by a draft on New York, in favor of J. & E. Walsh, which was protested for non-payment, and upon its return was paid by the company to the cashier of the bank of the state of Missouri, the indorsee and holder. This action was brought to recover back the amount thus paid.

The defendant denied that there was any other insurance on the one-fourth of the boat insured by plaintiff. He alleged that he was the legal owner of three-fourths of the boat, but that the bank of the state of Missouri was the beneficial owner. He also insisted that the plaintiff could not recover, because the policy was issued at the agency in St. Louis, and the plaintiff had not complied with the requisitions of the statute of Missouri, by filing a statement of its condition, an authenticated copy of its charter, &c.

Under the instructions of the court below, there was a verdict for the plaintiff.

Leslie & Barrets, for appellant.

I. The one-fourth insured by the plaintiff was not insured by the subsequent policy, and this is the legal construction of the policy.

II. There is no analogy between this case and those cases where money has been paid under a mistake of fact and against conscience. The policy contains a provision in respect to adjustment, under which a payment is to be regarded as a waiver of the condition by which the policy was avoided.

III. At least, the plaintiff could not recover on the ground of ignorance, unless he had used due diligence to get information.

IV. The defendant was not the real party in interest, but merely an agent.

V. The plaintiff had not complied with the law in relation to foreign agencies, and therefore could not recover. (1 Swift's Dig. 213.)

Kasson, for respondent.

I. Money paid under the circumstances of this case may be recovered back. (Mowatt v. Wright, 1 Wend 360; Wheadon v. Olds, 20 Wend. 176; Waite v. Leggett, 8 Cow. 195; Steel v. Lacy, 3 Taunt. 285; 1 Hill, 293; 1 T. R. 285; 9 Mees. & Wels. 54; 4 Mann. & Gran. 11.)

II. Where the insured professes to act on his own account, the party paying has the right to look to him as the real and only contracting party, in his suit to recover back the money. (1 Hill, 287, 293; 1 Taunt. 359; Buller v. Harrison, 2 Cowp. 566.)

III. It is the province of the court to construe written instruments patent on their face. (1 Zabriskie. [N. J.] 663; Ib. 711; 9 Iredell, 327; 3 Cranch, 186; 14 Penn. State 171; 10 Mass. 384.)

IV. The policies in this case were correctly construed. It was a mathematical impossibility for the defendant to insure one-fifth of three-fourths, without insuring on the interest taken by the plaintiff. But he had insured eighteen thousand dollars on the three-fourths, prior to the insurance in the Tennessee company, making the whole amount insured on the three-fourths, twenty-two thousand five hundred dollars, which was at the rate of thirty thousand dollars for the boat, thus covering the entire valuation, the very thing which the plaintiff's policy was intended to prevent, in order that the insurer might be interested in the safety of the boat.

V. The fact that the plaintiff has not complied with the statute of Missouri by filing certain papers with the county clerk, will not authorize defendant to hold money of the plaintiff received by him. The act affes its own penalties and this is not one of them.

RYLAND, Judge, delivered the opinion of the court.

The principal questions involved in this controversy, relate to the overinsurance of the boat and the capacity of the defendant. Walsh--whether he was acting for himself or as agent for the bank of Missouri.

1. The insurance was made on account of J. & E. Walsh. The company valued the boat at thirty thousand dollars. The one-fourth of this estimated valuation is seven thousand five hundred dollars. The insurance is made on four-fifths of this one-fourth, which amounts to six thousand dollars, leaving one-fifth of this one-fourth uninsured. This insurance was effected on 22d February, 1849. The stipulation in this policy made void this insurance, if any other insurance should be effected, by which a greater amount than six thousand dollars on this one-fourth of the boat should be insured. On the 24th of February, 1849, the defendants procured insurance in the Tennessee Marine and Fire Insurance Company, upon one-fifth of three-fourths of the said boat, valuing the said three-fourths at twenty-two thousand dollars, stating that eighteen thousand dollars was insured in other offices upon said three-fourths. This one-fifth, according to estimation, was valued at four thousand five hundred dollars.

This last insurance then, did most obviously increase the amount beyond the six thousand dollars, which had been insured on the one-fourth of the boat in the Columbus company. This last insurance covered the whole three-fourths at the valuation of thirty thousand dollars, making it twenty-two thousand five hundred dollars; consequently the increase of the amount of the one-fourth was one thousand five hundred dollars. So, then, the one-fourth part of the steamer was, in spite of the stipulation in the policy that it should have been only four-fifths of the estimated valuation insured fully and wholly insured to its full amount, seven thousand five hundred dollars. This is in violation of the stipulation; this avoided the policy. This, had it been known to the company, would have been a complete bar to a recovery for the loss. It was, however, paid upon this void policy; the plaintiff alleges that the payment was made through ignorance of the facts; that it was never discovered until about three weeks before this action was commenced Here, then, has been the payment of money through ignorance of the existence of facts which rendered the policy no longer binding; in such a case can it be recovered? In our opinion there can be no room to doubt the plaintiff's right to recover the money thus paid. In Mowatt v. Wright, (1 Wend. 360,) the court, by Savage, chief justice, uses this language: “The action for money had and received, in general, lies for money which, ex equo et bono, the defendant ought to refund, as for money paid by mistake, or upon consideration which happens to fail, etc. A mistake which entitles a party to sustain this action, must be a mistake of fact.” “An error of fact takes place, either when some fact which really exists is unknown, or some fact is supposed to exist, which really does not exist.” In Wheadon v. Olds, (20 Wend. 174,) it was held that “where a contract was made upon an assumed state of facts, in reference to whh...