Sulphur Mines Co v. Phenix Ins. Co. Of Brooklyn

• Decision Date: 18 March 1897
• Citation: 94 Va. 355,26 S.E. 856
• Parties: SULPHUR MINES CO. v. PHENIX INS. CO. OF BROOKLYN.
• Court: Virginia Supreme Court

26 S.E. 856

94 Va. 355

SULPHUR MINES CO.

v.PHENIX INS. CO. OF BROOKLYN.

Supreme Court of Appeals of Virginia.

March 18, 1897.

Insurance— Incumbrances —Appeal.

1. A provision in a policy that it should be void if the property was mortgaged on or after the date of the policy was valid, and a breach thereof forfeited the policy.

2. An objection that restrictive provisions in an insurance policy were printed in small type, in violation of Code, § 3252, cannot be first raised on appeal.

Error to law and equity court of Richmond.

Action by the Sulphur Mines Company against the Phenix Insurance Company of Brooklyn. Judgment for defendant, and plaintiff brings error. Affirmed.

Leake & Carter, for plaintiff in error.

Staples & Munford, for defendant in error.

KEITH, P. The Sulphur Mines Company sued the Phenix Insurance Company in the law and equity court of the city of Richmond upon a policy of insurance, claiming the sum of $2,132.53 as damage sustained by it by reason of the destruction by fire of certain property insured in the defendant company. The policy contains the following provision: "This policy is null and void if the property hereby insured, or any part thereof, is mortgaged or otherwise incumbered, either prior or subsequent to date hereof, unless consent to same is indorsed hereon by properly authorized agent of this company."

It appeared in evidence upon the trial that the property insured was incumbered at the time of the insurance and of the fire by a deed of trust, dated February 25, 1885, to Eugene Kelly and Isaac Davenport, Jr., to secure 300 $1,000 coupon bonds of the plaintiff company.

The plaintiff, over the objection of the defendant, introduced evidence tending to show that its officers and agents had never noticed this provision in the policy until after the loss; that it had policies written in a number of other companies, only one of which objected to paying the loss assessed against it; that the insurance was placed by Mr. Montague, a stockholder and director of the plaintiff company, who states that he had oftentimes insured property for railroads and other large corporations, in insurance companies which he represented, without ingrafting the condition against incumbrances in the policy at all, not deeming it necessary to state the amount in volume of the several mortgagesusually resting upon such corporations, but he could not state that such was the habit of the defendant company. It appears that Montague & Co. were applied to for insurance upon plaintiff's property for $41,500, insurance for $10,000 of which was written in companies represented by him, and the residue distributed among his friends, of whom Moore & Co. represented the defendant company.

Mr. Moore, a witness for the defendant, testified that he was the agent for the Phenix Insurance Company of Brooklyn when the policy sued on was issued, that Montague & Co. were not the agents or subagents of the defendant company, that he had no knowledge of the deed of trust when the policy issued, and that his first intimation of it was received when the proofs of loss were made out. As agent of the defendant company, he had policies in his possession, already signed by the president, which he, the agent, had the right to sign and issue. The witness further stated that, in case of large corporations, it was unusual to ask "whether or not there is a mortgage on the property, " that he had insured the Richmond & Danville Railroad Company for a very large amount of money, and that there is no statement on its policy with regard to the mortgage clause. He further states that, if he had been informed at the time the policy was issued of the existence of a deed of trust on the plaintiff's property, it would have made no difference, except that the loss, if any, would have been made payable to the trustee; that all the facts would have been communicated to the insurance company, and it would have decided whether or not to issue the policy.

The whole matter of law and fact was submitted to the court without the intervention of a jury, and thereupon a judgment was entered for the defendant, to which a writ of error was allowed by one of the judges of this court.

May on Insurance (volume 1, § 290) says: "If no inquiry be made, nothing but good faith is necessary touching the title or interest." And in section 291a: "If the policy is to be void by an incumbrance without written consent of the company, such incumbrance avoids it, whether known...