Reed v. Equitable Fire & Marine Ins. Co.

• Decision Date: 16 July 1893
• Citation: 17 R.I. 785,24 A. 833
• Court: Rhode Island Supreme Court
• Parties: REED v. EQUITABLE FIRE & MARINE INS. CO.

24 A. 833

17 R.I. 785

REED

v. EQUITABLE FIRE & MARINE INS. CO.

Supreme Court of Rhode Island.

July 16, 1893.

Action of assumpsit by Thomas D. Reed against the Equitable Fire & Marine Insurance Company on an insurance policy. On demurrers to the replication. Overruled as to first point, and sustained as to others.

Simon S. Lapham and John W. Hogan, for plaintiff.

Charles P. Robinson, for defendant.

STINESS, J. The plaintiff sues upon a fire insurance policy dated January 10, 1891, for the sum of $1,300. The house and barn covered by the policy were totally destroyed by fire, November 5, 1891. The defendant's second plea sets up a condition that the policy should be void, except as to the interest of the mortgagee of the premises, in case the insured had or should afterwards have other insurance on said property without the assent of the defendant company in writing or in print, and avers that there was other insurance on said property, at the date of the policy, in the Attleboro Mutual Fire Insurance Company, without such assent, whereby the policy became void. To this plea the plaintiff replies—First, that the defendant had notice of the prior insurance at the time of making the contract; second, that there was no other insurance at the time of the loss; third, that as the Attleboro Company's policy had the same provision it became void upon the procurement of the policy in suit; and, fourth, that the plaintiff, before the issuing of the policy, informed the agent of the defendant company that the property was already insured in the Attleboro Company, as alleged in the plea. The defendant moved to strike out the first and fourth replications for certain technical defects, but, these having been amended, the case now stands on demurrer to all the replications.

The first question is whether the defendant company is estopped from setting up the clause in question by notice to itself of the prior insurance at the time the policy was issued. The notice is not pleaded strictly as an estoppel, but, since the facts set forth can be shown on trial without special pleading, we see no reason why it may not be set up in the replication with the same legal effect that the fact would have in evidence. The same question was decided in Greene v. Insurance Co., 11 R. I. 434, where it was held that a mistake in a policy, limiting the amount of insurance after due notice to the company of a larger amount, might be shown in evidence by way of estoppel. The ground of the decision was that it would be a kind of fraud for the insurer to insist upon a forfeiture for which they were more blamable than the insured. It would be taking advantage of one's own wrong. We see no reason to question that decision, and following it we must hold the first replication to be good.

As to the second replication, we think it is clear that, as the condition in question relates to the validity of the contract at its inception, it is immaterial what the facts were at the time of the loss. If the policy was invalid at its issue, for want of consent for other insurance, it was invalid altogether. If it was not invalid, then it does not appear to be void at all, and hence it is of no consequence what the fact was at the time of the loss.

To sustain the third replication, we think it must appear that "other insurance, "in the sense of the policy, is valid insurance. It has been held that when a policy is void by its own terms it is no insurance and no breach of the condition relating to other insurance. See May, Ins. (2d Ed.) § 365, and cases cited. The first policy in this case was valid prior to the date of the policy in suit. If the last policy was invalid, and there has been no subsequent insurance, it is difficult to see upon what ground the first policy is avoided, and the second held, as set up in the replication. With precisely the same clause in each policy, the principle is not plain which would select the second as the subsisting policy and avoid the first. There maybe good reason for saying that both should be avoided, as a guard against temptation on the part of the insured to obtain what he may suppose to be other good insurance; but we see no good reason for holding that the operation of the clause avoids the first policy and holds the second. In Insurance Co. v. Schettler, 38 Ill. 166, cited by the plaintiff, it was held that other insurance on the property became void by a removal of the store insured from one lot to another, which was expressly assented to by the plaintiff in error, and hence there was no other insurance on the property to which the policy in suit attached after such consent, which was given upon the payment of a new consideration and increase of rate. The case is therefore quite distinguishable from the case at bar, and its syllabus seems to go beyond the decision. The cases of Carpenter v. Insurance Co., 16 Pet. 495, and Funke v. Insurance Co., 29 Minn. 347, 13 N. W. Rep. 164, do indeed support the plaintiff's contention that the first policy was avoided by the issuing of the second, but upon the ground, which would be fatal to the replication,...