Little v. Phoenix Ins. Co.

• Decision Date: 19 November 1877
• Parties: Charles J. Little v. Phoenix Insurance Company
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

123 Mass. 380

Charles J. Little v. Phoenix Insurance Company

Supreme Court of Massachusetts

November 19, 1877

[Syllabus Material]

Suffolk. Contract upon a policy of insurance, by which the defendant insured the plaintiff against loss or damage by fire, in the sum of $ 3000, "on his household furniture useful and ornamental, wearing apparel, musical instruments, plate, plated ware, books, pictures, engravings, statuary and ornaments, situate in frame dwelling-house on North Beacon Street, corner of Chester Street Brighton," from August 19, 1872, to August 19, 1877. The policy contained the following provisions:

"And the assured hereby covenants and engages that the representation given in the application for this insurance contains a just, full and true exposition of all the facts and circumstances in regard to the condition, situation, value and risk of the property insured, so far as the same are known to the assured, and material to the risk; and that, if any material fact or circumstance shall not have been fairly represented, or if the assured shall make any attempt to defraud the said company; that in every such case the risk hereupon shall cease and determine, and the policy be null and void, -- unless confirmed by a new agreement thereupon, written after a full knowledge of such facts and circumstances."

"And the assured further covenants and agrees that, in case of any loss or damage, the said company shall have the right to enter upon and rebuild or repair the premises, or replace the property lost or damaged with other of the same kind and equal goodness, at any time within ninety days after due notice of the loss, or such further time as may be reasonable, or to pay for the same in sixty days after proof of the loss or damage thereon."

"All persons insured by this company, and sustaining loss or damage by fire, are forthwith to give notice thereof to the company; and as soon after as possible to deliver in a particular account of such loss or damage, signed with their own hands, and verified by their oath or affirmation; they shall also declare, on oath, whether any and what other insurance has been made on the same property; what was the whole value of the subject insured; what was their interest therein; in what general manner (as to trade, manufactory, merchandise or otherwise) the building insured, or containing the subject insured, and the several parts thereof, were occupied, at the time of the loss, and who were the occupants of such building, and when and how the fire originated, as far as they know or believe; and also, if required, shall produce their books of account and other proper vouchers; and, until such proofs are furnished, the loss shall not be deemed payable. Also, if there appear any fraud or false swearing, the insured shall forfeit all claim under this policy."

"It is expressly covenanted by the parties hereto, that no suit or action against this company, for the recovery of any claim by virtue of this policy, shall be sustainable in any court of law or chancery, unless commenced within twelve months next after the loss shall have occurred; and should any suit or action be commenced against this company after the expiration of the aforesaid twelve months, the lapse of time shall be taken and admitted as conclusive evidence against the validity of such claim, any statute of limitation to the contrary notwithstanding."

"This policy is made and accepted upon the above express conditions, but shall not be valid until countersigned by the duly authorized agents of the Phoenix Insurance Company, at Boston, Mass."

Writ dated September 3, 1875. The declaration alleged the making of the policy on the plaintiff's household furniture, a loss by fire on January 26, 1874, the giving of immediate notice of said loss by the plaintiff to the defendant, and the furnishing the proof of loss required by the policy in November following; that the delay in furnishing the proof of loss and in bringing suit upon the policy was caused by the negligence and improper action of the defendant; and that the defendant waived the conditions of the policy thereunto appertaining.

The answer contained a general denial; alleged that the proof of loss was not furnished nor the action begun within the time required by the policy; and that, if the plaintiff had any cause of action on March 30, 1875, the same was forfeited by the plaintiff's false swearing, in the proof of loss of that date, in regard to the amount and value of the property on the premises described, and in regard to the plaintiff's interest therein.

At the trial in the Superior Court, before Dewey, J., the jury returned a verdict for the plaintiff, and the defendant alleged exceptions, the material parts of which appear in the opinion.

Exceptions overruled.

E. D. Sohier & J. D. Bryant, for the defendant.

R. M. Morse, Jr., for the plaintiff.

Colt, J. Eudicott & Soule, JJ., absent.

OPINION

Colt, J.

The plaintiff's title to the furniture insured was acquired by bill of sale from Charles Green, absolute in form, but intended by the parties only as security for money lent. The property at the time of the sale was in a dwelling-house owned by the plaintiff, but occupied up to the time of the fire by Green. The parties to the sale went to the house, saw the property, and declared that possession of it was given to and received by the plaintiff. It remained in the custody of Green, but it was understood that while the latter was to have the use of it, the legal title was to be in the plaintiff. The furniture belonged originally to one Charles Green, who sold it to Paul B. Green, and gave to him a receipted bill of parcels, at the bottom of which, at the time of the sale to the plaintiff, was written the words, "I hereby transfer and sell all of the above furniture to Charles J. Little, of Boston, Mass." This addition was duly dated, signed by Paul B. Green, and delivered to the plaintiff.

1. The defendant contends that on this evidence the plaintiff had no insurable interest in the goods, because there was only a pledge of the property to secure the payment of money, the lien on which was lost by allowing the goods to remain in the possession of the pledgor. But the written instrument produced is something more than an informal bill of parcels. It is sufficient to transfer the legal title, and it is evident that both intended that the legal title should be held by the plaintiff as security. Such an intention is inconsistent with a pledge by which the title remains unchanged in the pledgor, subject only to the lien.

The question is not as to the validity of the transfer as against creditors or subsequent purchasers. It is sufficient that the plaintiff acquired a title to the specific property insured which had not been defeated by creditors or otherwise at the time of the fire, and by the destruction of which he has suffered direct loss to the value of the property destroyed. Haley v. Manufacturers' Ins. Co. 120 Mass. 292, 296. Eastern Railroad v. Relief Ins. Co. 98 Mass. 420, 423. Williams v. Roger Williams Ins. Co. 107 Mass. 377, 379. Clark v. Washington Ins. Co. 100 Mass. 509.

We do not see that the defendant has any just cause to complain of the instruction given upon this point. ^[*] For the reason above stated, it cannot be fairly said that it was inapplicable to the facts, or tended to mislead the jury. The instruction requested was properly refused. ^[+] The transaction, as we have seen, could not be construed as a pledge, and, in the absence of any written condition, it could not in law, at least, be treated as a mortgage. Pennock v. McCormick, 120 Mass. 275. In legal effect it was a sale, with a right on the part of the seller by verbal agreement to repurchase. 2. The property was described in the policy, and is alleged in the plaintiff's declaration, to be the plaintiff's household furniture. But the considerations above stated dispose of the objection that the plaintiff had no such property as he caused to be insured and as he alleged in his writ. The jury were justified in finding that the legal ownership of it was in the plaintiff.

3. There was no material concealment or misrepresentation, in the absence of any inquiry or express stipulation on the subject, in failing to state that the property was in the custody of a lessee of the plaintiff. It was truthfully described as his household furniture, although it was not in his actual custody or in a house occupied by him. The written part of the policy gives accurately the location of the building in which it was placed.

4. The statements in the printed part of the proofs of loss "that the property belonged exclusively to the assured, and that no other person had any interest therein," and that "the articles named belonged to and were in the possession of the insured at the time of the fire," do not, in law, amount to fraud or false swearing within the terms of the policy. The jury may well have found that the plaintiff had the absolute and exclusive legal title; and, as to the possession of the assured at the time of the fire, it is stated, in the clause immediately preceding the statement relied on as false and fraudulent, that the building containing the property destroyed was occupied in its several parts by Green and his family as a dwelling-house.

5. The instructions given as to the effect of misstatements in the proofs of loss were correct. ^[**] The condition in the policy is that the insured shall forfeit all claim under it, if there appears any fraud or false swearing. This implies something more than some mistake of fact or honest...