Hartford Fire Ins. Co. v. Davenport

• Decision Date: 01 November 1877
• Court: Michigan Supreme Court
• Parties: Hartford Fire Ins. Co. v. John Davenport et al

37 Mich. 609

Hartford Fire Ins. Co. v. John Davenport et al

Supreme Court of Michigan

November 1, 1877

Argued October 30, 1877 [Syllabus Material]

Error to Van Buren. (Hawes, J.)

Assumpsit. Defendant brings error. Reversed.

Judgment reversed with costs and a new trial granted.

Arthur Brown for plaintiff in error. No one can be a party to the action except a party to the contract, Litchfield v. Garratt 10 Mich. 426; Pipp v. Reynolds 20 Mich. 92; Mellen v. Whipple 1 Gray 322; Turner v. McCarty 22 Mich. 265; where money due on an insurance policy is made payable to a mortgagee of property insured, he cannot sue for it, but the action must be brought in the name of the persons obtaining the insurance, Etna Ins. Co. v. Johnson 11 Bush 587; Van Buren v St. Joseph County Village F. I. Co. 28 Mich. 404. No action can be maintained on a policy made void by violation of the condition against leaving the premises vacant, Ashworth v. Builders Ins. Co. 112 Mass. 422; Keith v. Quincy Mut. F. I. Co. 10 Allen 228; and evidence cannot be given as to what the local agent said before the policy was issued, Hartford F. I. Co. v. Webster 69 Ill. 392; he could not waive the condition either before or after issuing the policy, Security Ins. Co. v. Fay 22 Mich. 471; Amer. Ins. Co. v. Padfield 78 Ill. 167; Simonton v. Liverpool Ins. Co. 51 Ga. 76.

Richards & Mills for defendants in error, supported the right of mortgagees of insured property, named in the policy as payees, to maintain suit on the policy, citing Pitney v. Glen's Falls Ins. Co. 65 N.Y. 6; Motley v. Mfrs. Ins. Co 29 Me. 337; Ripley v. AEtna F. I. Co. 29 Barb. 552; Cone v. Niagara F. Ins. Co. 60 N.Y. 619; Clinton v. Hope Ins. Co. 45 N.Y. 454; Ins. Co. v. Woodruff 2 Dutch. 541; Turner v. Quincy Ias Co. 109 Mass. 568; Martin v. Franklin F. I. Co. 15 Amer. L. Reg. N. S. 229; Patterson v. Triumph Ins. Co. 64 Me. 500; Ripley v. Astor Ins. Co. 17 How. Pr. 414; Grosvenor v. Atlantic F. I. Co. 17 N.Y. 399; Ennis v. Harmony Ins. Co. 3 Bosw. 516; Williams v. Ocean Ins. Co. 2 Met. 306; Barrett v. Union Ins. Co. 7 Cush. 175; Newman v. Springfield F. & M. Ins. Co. 17 Minn. 123; Lowell v. Middlesex F. I. Co. 8 Cush. 127; Loring v. Mfrs. Ins. Co. 8 Gray 28; Wood v. Rutland F. I. Co. 31 Vt. 552; Franklin v. Nat. Ins. Co. 43 Mo. 494; Sanford v. Mechanics' M. F. I. Co. 12 Cush. 549; Schemerhorn v. Vanderheyden 1 Johns. 139; Felton v. Dickinson 10 Mass. 290; Pacific Ins. Co. v. Catlett 4 Wend. 79; Jessel v. Williamsburgh Ins. Co. 3 Hill. 88. A general agent can bind an insurance company by a parol waiver of a condition forfeiting the policy in case the premises insured are left vacant, and estop the company from claiming that it is not bound, Peoria M. & F. Ins. Co. v. Hall 12 Mich. 202; Westchester Ins. Co. v. Earle 33 Mich. 143; North Amer. F. I. Co. v. Throop 22 Mich. 146; Pechner v. Phoenix Ins. Co. 65 N.Y. 195; Gloucester Mfg. Co. v. Howard F. I. Co. 5 Gray 497; Brockelbank v. Sugrue 5 C. & P. 21; Roberts v. Continental Ins. Co. 41 Wis. 321; Hotchkiss v. Ins. Co. 5 Hun 90; Planters' Mut. Ins. Co. v. Lyons 38 Tex. 253; Viele v. Ins. Co. 26 Ia. 56; North Berwick Co. v. Ins. Co. 52 Me. 336; Rathbone v. Ins. Co. 31 Conn. 193; People's Ins. Co. v. Spencer 53 Penn. St. 353; Winans v. Allemania F. I. Co. 38 Wis. 342; Devine v. Home Ins. Co. 32 Wis. 471; Commercial Ins. Co. v. Spankneble 52 Ill. 53; Miner v. Phoenix Ins. Co. 27 Wis. 693; Boehen v. Williamsburgh Ins. Co. 35 N.Y. 131; Ins. Co. v. Wilkinson 13 Wal. 222; Bouton v. Conn. Mut. L. I. Co. 25 Conn. 542; Baubie v. AEtna Ins. Co. 2 Dill. 156; Citizens Mut. F. I. Co. v. Sortwell 8 Allen 217; N. E. F. & M. Ins. Co. v. Schettler 38 Ill. 166; Howard Ins. Co. v. Bruner 23 Penn. St. 50; Franklin v. Atlantic Ins. Co. 42 Mo. 456; Combs v. Hannibal Ins. Co. 43 Mo. 148; McFarland v. Peabody Ins. Co. 6 W.Va. 425; May on Insurance § 143; facts made known to a general agent for an insurance company before a policy is issued, are constructively known to the company and cannot be set up to defeat a recovery on the policy, Beal v. Ins. Co. 16 Wis. 241; Ames v. Ins. Co. 14 N.Y. 253; Columbia Ins. Co. v. Cooper 50 Penn. St. 331; Campbell v. Merchants & F. Mut. Ins. Co. 37 N.H. 35; Clark v. Union Mut. F. I. Co. 40 N.H. 333; McEwen v. Montgomery County Insurance Co. 5 Hill. 101; May on Ins. § 132; Bodine v. Exchange F. I. Co. 51 N.Y. 117; Grady v. Amer. Cent. Ins. Co. 60 Mo. 116; AEtna Ins. Co. v. Maguire 51 Ill. 342; Rossiter v. Trafalgar Life Ass'n 27 Beav. 377; United Life Ins. Co. v. Ins. Co. of N. America 42 Ind. 588.

Campbell, J. Cooley, C. J. and Graves, J. Concurred: Marston, J. did not sit in this case.

OPINION

Campbell, J.

The defendants in error brought suit upon a policy of insurance issued to one Headly and on the face of it appearing to be for different sums on five distinct buildings and upon furniture and other personal property also, the aggregate sums insured amounting to $ 2500. The policy contained the following clause: "Payable in event of loss to the property on said farm premises to the executors of the estate of Ira Davenport as mortgagees, as their interest may appear." The mortgage was for $ 2000 on real estate.

There was a condition which declared that "if the premises hereby insured shall become vacated by the removal of the owner or occupant, and so remain for a period of more than fifteen days, without notice to the company and consent endorsed hereon," it should become void.

The premises were burned during such a vacancy, but evidence was received and acted on that before the issuing of the policy the insured had stated to the agent that he expected during the currency of the policy to leave his house vacant during a year or more, and was informed it would make no difference.

This is one of the errors assigned, and it is claimed in support of the ruling below, that the company is estopped from relying on this forfeiture.

We do not think the case is within any such principle. This Court has held in several cases that there may be waivers or estoppels which do away with the written conditions of a policy by reason of the conduct of the insurers inconsistent with reliance upon them. Peoria M. & F. Ins. Co. v. Hall 12 Mich. 202; Westchester Ins. Co v. Earle 33 Mich. 143; North American Fire Ins. Co. v. Throop 22 Mich. 146; Aurora F. & M. Ins. Co. v. Kranich 36 Mich. 289.

These cases, so far as they apply at all, relate to a knowledge by the company of existing facts at the time of their action, when such action would not be consistent with any idea that they were to be discharged from liability by reason thereof.

But in this case the vacancy concerning which the parties conversed, if there was any such conversation, was one contemplated in the future, and the stipulation or understanding, if it amounted to anything, was an executory contract, intended to form a part of the contract of insurance. This being so, the doctrine cannot be admitted that any part of the completed contract can rest in parol. The policy was the conclusion of the bargain, and its acceptance would exclude any parol promises inconsistent with it. There is no resemblance between a parol variance of a written contract and a waiver of a condition after it has become binding on the parties.

It may also be suggested, although perhaps not very important, that the declaration sets out the contract as written and relies on it, and is not consistent with a claim to strike out a material condition.

We are also of opinion that the plaintiffs below showed no right to sue upon the contract. The parties to this policy were Headly and the company. Van Buren v. St. Joseph County Village Insurance Co. 28 Mich. 398; Clay Fire and Marine Ins. Co. v. Huron Salt and Lumber Man'g Co. 31 Mich. 346. The policy was to insure his interest and not that of the mortgagees, and any money paid to them would enure to his benefit. They hold no assignment of the policy and sue as original parties.

No one can dispute the right of parties to a contract to make money payable to a third person if they see fit. It is not important in this case to inquire whether if the policy before us gave the mortgagees an exclusive right to the whole insurance money they might not sue for it. In the present case the policy does not purport to do any such thing. It covers property not included in the mortgage, and only provides for payment to them of the insurance money due upon the property with which they were concerned. Upon the trial it appeared that other property was burned, and the court excluded them from recovering beyond their own share, and Headley lost his share of the money entirely.

Now there can be no splitting up of causes of action on a single policy. The party insured retained by the terms of the policy itself interests beyond the control of the mortgagees. Their interests were several and not joint. Under such circumstances it cannot be held that the mortgagees have any control of the policy which would authorize them to sue upon it. No doubt the company would be protected in paying them their share as equitable appointees, but they cannot be treated as trustees for Headly's benefit. He and not they must be held the legal owner of the policy, which stands in his name and was made for his benefit. No case has been cited and we cannot conceive that any will be found, which would justify us in holding the mortgagees having only a partial interest under an appointment in a policy authorized to assume its legal ownership. Whoever sues must be able to enforce the whole policy.

As this will probably dispose of the case, we need not consider the other points.

Judgment must be reversed with costs and a new trial granted.

Cooley C. J. and Graves, J. concurred: Marston, J. did not sit in this...