Hutchinson v. Western Ins. Co.

Decision Date31 March 1855
Citation21 Mo. 97
PartiesHUTCHINSON, Respondent, v. THE WESTERN INSURANCE COMPANY, Appellant.
CourtMissouri Supreme Court

1. A condition annexed to a policy of insurance that the assured shall cause any previous or subsequent insurance to be endorsed on his policy, is a condition precedent, and is not satisfied by verbal notice to the insurer of such other insurance.

Appeal from St. Louis Court of Common Pleas.

This was an action upon a policy of fire insurance for $3000, dated October 29, 1851, upon a mill in Illinoistown. The 6th condition annexed to the policy is set out in the opinion of the court. The 11th condition was as follows: “The policy may always be transferred, provided such transfer be endorsed upon the policy and brought to the office for approval within thirty days from the date thereof; otherwise, the premium shall be considered as sunk for the benefit of the assurers.”

At the date of this policy, E. C. Hutchinson, the plaintiff, was the owner of the mill. There was a previous insurance for $2500 in the City Insurance Company of Cincinnati, which was endorsed on defendant's policy. On the 30th of December, 1851, the policy in the City Insurance Company of Cincinnati having expired, the plaintiff effected an insurance for $2,000 upon the same property in the Commercial Insurance Company of Charleston for one year. The defendant's agent, as a witness testified, was verbally informed of this subsequent insurance, but was never requested to endorse it on the policy, and it never was endorsed. On the 25th of February, 1852, Hutchinson sold the mill to H. W. Watkins for the sum of $5000, of which $1000 was to be paid in cash. For the remaining $4000, Watkins executed a deed of trust upon the property. The deed of trust contained a clause to the effect that the property should be kept insured in the name of Hutchinson, at the expense of Watkins, and that in case of loss, the insurance should be received by Hutchinson, “and applied and credited by him on account of said indebtedness, and the balance, if any, paid to Watkins.”

The defendant's agent was, according to the testimony of a witness, informed of the sale to Watkins, and requested to endorse it on the policy, but stated that it was unnecessary to do so, as the plaintiff retained an interest. It did not appear, however, that he was informed of the stipulation in the deed of trust as to the application of the insurance money.

On the 6th of June, 1852, and before defendant's policy expired, the mill was destroyed by fire. Notice and proofs of loss were served on the defendant, and a witness testified that the only reason assigned for a refusal to pay, was the sale to Watkins.

The Court of Common Pleas instructed the jury to the effect that notice to the defendant of the subsequent insurance before a loss was a sufficient compliance with the 6th condition of the policy, and refused an instruction that it must have been endorsed on the policy. Other instructions were given and refused, which it is not thought necessary to notice.

After verdict and judgment for plaintiff, the defendant appealed.

Wickham & Snead, for appellant.

I. Parol evidence is inadmissible to prove verbal notice of subsequent insurance, the conditions of insurance requiring it to be endorsed on the policy in writing. (1 Phill. on Ins. sec. 8, § 67, 68, p. 51. 13 Mass. 99. 2 Denio, 79, and cases cited. 1 Mood. and Walk. 367, 370. 7 Cushing, 179-80.17 Mo. Rep. 248. 5 Pick. 34. 16 Peters, 512. 14 Mass. 152.) II. A condition in a fire policy not complied with defeats the policy; and even though verbal notice of the subsequent insurance was given to appellant, still, unless such subsequent insurance was endorsed on the policy, there is no such substantial compliance with the 6th condition of the policy as will entitle the respondent to recover. (6 Wend. 488, 494. 16 Peters, 510-12. 5 Ohio Rep. 466-7. 14 Mo. Rep. 3, 8. 13 Ohio, 64. 4 Howard, 222-3. 2 Cranch, 166-7-8. 2 Johns. Rep. 109, 114. 16 Ohio, 165. 19 Ohio, 149, 176-7.) III. The agreement in the deed of trust, through which the plaintiff claimed his present interest in the property insured, to the effect that he should credit on the notes of Watkins whatever, in case of loss, he might recover from the insurance companies, would, if binding on him, discharge the defendant from liability, whether Watkins caused the property to be insured in plaintiff's name or not, because, 1st, it would deprive the company of its equitable right of subrogation. (2 Phill. on Ins. (new ed.) 399, 400. 16 Wend. 397. 8 Johns. 246. 9 East, 72. 4 Edwards' Ch. Rep. 95. 3 Rob. (La.) 427.) 2d. It would operate as an equitable assignment of the policy, and so not having been approved by the company and endorsed, as is stipulated in the 11th condition, would avoid the policy. (1 Phill. on Ins. p. 64, sec. X, § 90. 24 Pick. 204. 1 Curtis, 196.) Moreover, the respondent, not being the real party in interest, could not bring this action in his own name under our statute. 3d. It would be against public policy, by making it immaterial to respondent whether the property was burned or not, and by putting it in the power of Watkins to reap a benefit from such destruction; for, besides having his debt paid to respondent by this insurance, he may insure and recover the full value of the property in his own name as owner. (9 Wend. 408.)

T. Polk and F. A. Dick, for respondent.

I. Parol evidence was admissible to prove actual notice to the defendant of the insurance in the Commercial Insurance Company. 1. By the words of the 6th condition of the policy, notice is sufficient to prevent an avoidance of the policy. 2. The notice is not required to be in writing, and so parol notice is good. (5 Hill, (N. Y.) 101.) 3. Any doubt as to the meaning of the 6th condition should be resolved against the company. (1 Sumner, 440.) 4. The action of the company, in placing their refusal to pay on other grounds, shows their construction of the 6th condition. II. The object of the condition, (which is to prevent the assured from getting too large an insurance,) was fully answered by the endorsement on the policy of $2500 of insurance on the same property in the Cincinnati City Insurance Company. This policy expired before the fire, and the subsequent insurance of $2000 was intended to replace it. The amount of insurance was diminished, instead of being increased. III. It is not necessary to inquire into the effect of the agreement between Watkins and the plaintiff, as there was no evidence that it was ever carried...

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