Fitchburg Sav. Bank v. Amazon Ins. Co.

• Decision Date: 07 October 1878
• Citation: 125 Mass. 431
• Parties: Fitchburg Savings Bank v. Amazon Insurance Company
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

125 Mass. 431

Fitchburg Savings Bank v. Amazon Insurance Company

Supreme Court of Massachusetts

October 7, 1878

[Syllabus Material]

Worcester. Contract upon a policy of insurance dated June 1 1876, by which the defendant insured F. S. Coolidge against loss or damage by fire or lightning to the amount of $ 1500 for the term of six months from June 1, 1876, upon certain mill property, "payable in case of loss to the Fitchburg Savings Bank, mortgagee." The policy also contained on its face, and before the signatures of the officers of the defendant company, the following provisions: "If any change takes place in the title or possession of the property, whether by sale. lease, legal process, judicial decree, voluntary transfer, conveyance or otherwise, or if the interest of the assured be any other than the entire, unconditional, free and unincumbered ownership of the property, and is not so expressed in the written portion of the policy, then and in every such case this policy shall be void." "The following facts are considered material to the risk and must be fully disclosed to the company, viz.: all facts relating to the title, ownership, possession or occupancy of the property insured, or any incumbrance thereon." "No waiver or modification of any of the terms or conditions of this policy shall be made in any event."

At the trial in the Superior Court, before Bacon, J., without a jury, it appeared that the buildings insured were destroyed by fire on October 7, 1876, and due proof of loss was made; and that the plaintiff had mortgages on the property to the amount of $ 4000.

The plaintiff was then allowed by consent to prove the following facts, all objection to the competency of the facts being reserved: On June 1 or 2, 1876, a policy of insurance, No. 157, 728, with printed provisions like those in the present policy, and bearing the same date, on the same property and for the same amount, describing the property as owned by F. S. Coolidge, was issued through C. B. Dennis & Company, the local agents of the defendant, at Fitchburg, to the plaintiff, as mortgagee, who paid the premium thereon, and Dennis & Company made report thereof to the defendant at Cincinnati upon the usual blank provided for that purpose, and gave a copy of the written portion of the policy, and sent at the same time the following letter to the defendant:

"Dear Sir: Mr. Coolidge having indorsed notes of several of his customers, who have suspended, he has been obliged to stop. But his assets are equal to his debts, and his relations with his creditors are pleasant; he will be running again very soon, he expects within a month. There is no moral hazard, as the property is only partially insured, ($ 4000 in all, and the property is worth $ 10,000.) It is under good charge and well cared for. He is an intimate friend of ours, and we can vouch for him and the risk, as we are very well acquainted with all the circumstances in relation to it."

To this letter the defendant replied by letter dated June 26, 1876, as follows: "In re Fitchburg Savings Bank, mortgagee. As a general rule we decline propositions for insurance on mills not in operation, but are disposed to listen to your plea in regard to Mr. F. S. Coolidge, provided form of policy can be modified. If you can write it to owner, Mr. Coolidge, direct, loss if any payable to bank as its mortgagee interest may appear, we will carry the risk, in which case make full daily report of new No., values, other insurance, &c. If this modification be not acceptable, cancel 157, 728, and let us withdraw altogether from the risk."

Dennis took this letter to the plaintiff, showed it to its officers, and the first policy was cancelled and the present policy delivered to the plaintiff on June 28 or 29, 1876, and report thereof was made by Dennis & Company to the defendant.

Andrew Jewett, the assistant treasurer of the plaintiff, testified as follows: "I recollect Dennis coming to the bank about the insurance; we told him we wanted about $ 2500. He wanted to put some of it in...