Minnock v. Eureka Fire & Marine Ins. Co. of Cincinnati

• Citation: 90 Mich. 236,51 N.W. 367
• Parties: MINNOCK v. EUREKA FIRE & MARINE INS. CO. OF CINCINNATI, OHIO.
• Decision Date: 05 February 1892
• Court: Supreme Court of Michigan

51 N.W. 367

90 Mich. 236

MINNOCK v. EUREKA FIRE & MARINE INS. CO. OF CINCINNATI, OHIO.

Supreme Court of Michigan

February 5, 1892

Error to circuit court, Livingston county; WILLIAM NEWTON, Judge.

Action by John K. Minnock against the Eureka Fire & Marine Insurance Company of Cincinnati, Ohio, upon a policy of fire insurance. Judgment for plaintiff. Defendant appeals. Affirmed.

Clarence Tinker, for appellant.

Luke S. Montague, for appellee.

MCGRATH J.

This is an action upon a fire insurance policy. With its plea of the general issue, defendant gave notice: "(1) That said plaintiff never had any valid or legal policy of insurance or contract of insurance with said company, and that said company was never legally bound to pay any sum of money on said contract or policy declared on by said plaintiff in his declaration. (2) That said plaintiff has failed to make the necessary proof provided for and agreed to in said policy, and has failed to furnish the same to said company, as required in policy issued by said company. (3) That said contract or policy of insurance is void for the following reasons: That said plaintiff had permitted a suit to be commenced and carried on for the purpose of foreclosing a mortgage on said property covered by said policy of insurance, as claimed by said plaintiff, and that, according to the condition of said policy, it made the same void, being contrary to the conditions thereof, and gave no notice of the same to defendant, and that the said policy became and was void in consequence of the property insured becoming involved in litigation without notice to said company, and became and was void because the same was in litigation at the time said policy was issued, and no notice thereof given said company." The policy was dated December 30, 1888, and was to run three years.

The fire occurred March 25, 1890. Proofs of loss were furnished June 5, 1890. Suit was commenced in August, 1890. The trial was had in January, 1891. Plaintiff recovered, and defendant appeals.

1. The first question raised is that by the terms of the policy, and of an agreement between the plaintiff and the mortgagee, the right of action was vested in the mortgagee, and did not exist in plaintiff. The policy was taken out and the premium paid by plaintiff. The policy provided that the companies named "do each insure John K. Minnock against loss or damage by fire to the amount of one-half part of the sum of $2,500," and contained the clause, "loss, if any payable to Rufus Cate, mortgagee, as his mortgage interest may appear." In an agreement extending the time for the payment of the mortgage debt entered into between plaintiff and the mortgagee, this clause appears "And it is also agreed that said John K. Minnock, so long as the money secured by said mortgage shall remain unpaid, shall and will keep the mortgage interest of the said Rufus Cate or his assigns in the buildings insured against loss and damage by fire by insurance in amount and manner approved by the said Rufus Cate. And the policy of insurance shall be delivered to the said Rufus Cate, to be held by him until said mortgage is fully paid. In default thereof it shall be lawful for the said Rufus Cate" to insure, etc. This question is settled by Insurance Co. v. Davenport, 37 Mich. 608; Van Buren v. Insurance Co., 28 Mich. 398-404; Clay F. & M. Ins. Co. v. Huron S. & L. Manuf'g Co., 31 Mich. 346. The case of Richelieu & O. Nav. Co. v. Thames & M. Ins. Co., 58 Mich. 132, 24 N.W. 547, differs from the present case. There the Owen Sound Steam-Ship Company were owners of a vessel which the Richelieu & Ontario Navigation Company chartered for a term of years, and the charterers agreed with the owners to procure insurance, and that in case of total loss the insurance money should replace the vessel, and the rent cease, while in case of partial loss the charterers were bound to restore the vessel. Defendant by the policy insured the vessel, "on account of the Owen Sound Steam-Ship Co., loss, if any, payable to the R. & O. Nav. Co." The charterer (plaintiff) procured the insurance and paid the premium. The court say: 'This policy contains an express promise to pay the money to the plaintiff. It contains no reservation that plaintiff shall be paid according to the amount of any interest which may be shown, or any partial amount. The promise is unconditional to pay the whole of it. It was understood by the plaintiff that the insurance was in fact made for plaintiff's benefit, and it was really so made." In the present case, whatever plaintiff and the mortgagee may have intended by their agreement, the policy did not run to Cate, nor did it insure his interest only. Plaintiff procured the insurance and paid the premium.

2. It was claimed by defendant that the application for the policy of insurance contained a misrepresentation as to the amount of the incumbrances upon the property, but objection was made that defendant's notice did not set up such misrepresentation, and the court excluded testimony tending to show that fact. This precise question was raised in Insurance Co. v. Curtis, 32 Mich. 402, 403; and the court held that "the defense was one which the company had a right to waive, and the fact that no notice of such a defense was attached to the general issue would give counsel for plaintiff to understand that the company did not intend to rely upon any such breach, and would be likely, therefore, to prevent the plaintiff's counsel from making such preparation upon that point as they otherwise might do." Defendant asked leave to amend the notice, and the court refused to grant it; but the discretion of a trial court in denying a motion to amend a plea will not be reviewed unless that discretion has been abused. Souvais v. Leavitt, 53 Mich. 577, 19 N.W. 261. The application had been in the hands of defendant for two years. There was no claim that it had but recently learned of the existence of this mortgage. Plaintiff had been led to believe that any defense, so far as the matters set forth in the application were concerned, had been waived by defendant. It does not appear to us that the discretion of the trial court has been abused.

3. It is next contended that the policy was invalid because plaintiff took out other insurance without the written consent of the companies written on the policy. The policy provides that "if the assured shall have or hereafter make other insurance on the property hereby insured, or any part thereof, whether valid or not, without the consent of the companies written hereon, * * * this policy shall be void." The provision referred to is printed in small type among the conditions of the policy. On the face of the policy the following clause is written in: "No other insurance on above risk allowed unless by consent of this insurance company." This clause must have been designedly written in, and very probably as the result of some conversation upon the subject. The written clause has no office to perform, unless it is to change the terms of the printed provision relating to the same subject. When a written and a printed clause appear in a policy of insurance, relating to the same subject,-the former in a prominent place, and associated with the other written provisions of the policy, and the latter in small type, and therefore obscure,-the intention of the parties will be sought for in the written provision, rather than in the printed. Here the printed clause invalidated the policy unless the consent of the company was indorsed upon the policy, and the written clause did not require the consent to be indorsed upon the policy. One Phillips was the local agent of the defendant company. The company furnished to Phillips blank policies, which he issued when applied for, without reference of the application to the home office, and made daily reports to the company of the written provisions of the policies issued; and it appeared that the written clause above referred to was actually reported to the home office. The policy contained the following printed clause: "It is further understood, and made a part of the contract, that the agent of the companies has no authority to waive, modify, or strike from this policy any...