Guest v. New Hampshire Fire Ins. Co.

• Decision Date: 05 May 1887
• Citation: 33 N.W. 31,66 Mich. 98
• Court: Michigan Supreme Court
• Parties: GUEST v. NEW HAMPSHIRE FIRE INS. CO.

33 N.W. 31

66 Mich. 98

GUEST v. NEW HAMPSHIRE FIRE INS. CO.

Supreme Court of Michigan

May 5, 1887

Error to Bay.

Shepard & Lyon, for plaintiff.

Pratt &amp Gilbert, for defendant and appellants.

CAMPBELL C.J.

In this case plaintiff recovered on a policy of insurance upon a dwelling. He had held a contract of purchase, which he had assigned, as collateral to a building debt, to one Harrison. Harrison afterwards took out a policy for his own interest. After the house burned, Harrison collected that policy, and applied the proceeds on the mortgage. The company defended on the ground that plaintiff did not state truly his interest; that the Harrison policy constituted other insurance, and vitiated this policy; and on some other questions, chiefly relating to the same general grounds. There was no written application, and there were no written questions and answers. The policy contained no reference to title, except the recital: "Lot held by virtue of a land contract." There is nothing in the case which shows that there was any misrepresentation concerning the title, unless a failure to mention the incumbrance to Harrison can be so treated. There was testimony both from plaintiff and the insurance agent indicating that the latter knew all about it. The case practically comes back to the question whether failure to mention the mortgage in the policy is a practical misrepresentation.

It was held in Castner v. Insurance Co., 46 Mich. 15, 8 N.W. 554, that a person getting insurance was not required to show the exact condition of his title unless requested to do so. In Farmers' Mut. Fire Ins. Co. v. Fogelman, 35 Mich. 481, it was held equitable ownership would support a recital of ownership. In O'Brien v. Ohio Ins Co., 52 Mich. 131, 17 N.W. 726, it was held a failure to mention incumbrances, if not inquired about, and if the application was oral, and no deceit practiced, was immaterial. A similar principle was laid down in Tiefenthal v. Citizens' Mut. Fire Ins. Co., 53 Mich. 306, 19 N.W. 9. As the loss of the insured property would diminish the mortgagor's means of paying the mortgage, it cannot be said that a mortgage lessens the insurable interest, unless there is a stipulation to the contrary, or some very peculiar state of things. The policy was not void here for that reason.

The policy is made voidable if the assured obtains further insurance without the written consent of the company indorsed thereon....