The plaintiff, interested as mortgagee, obtained the policy in suit in the name of the general owner, with his consent, paying the premium himself; and the policy being made payable to him in case of loss to the extent of his mortgage interest, the whole amount of insurance being less than his mortgage debt, it was held that he might maintain an action in his own name to recover the full amount.
Just before obtaining this policy, the plaintiff had two policies, — one in the Market Company, which company had stopped payment, and one in the North American Company. On receiving notice from the agent that the Market Company had stopped, he surrendered his policy to him to be cancelled, and received back the unexpired premium. The policy was returned by the agent to the company to be cancelled, and nothing more was heard from it. Held, that this policy must be considered to have been cancelled at the time it was so surrendered.
When the policy in suit was obtained, the agent of the defendant company knew all about the circumstances, undertook to procure the insurance, and do everything which was right. He afterward delivered the policy to the plaintiff who, relying on the agent, accepted it and paid the premium. In an action on the policy, held, that the company was estopped to deny that the fact of the existence of the insurance in the North American Company had been endorsed upon the policy agreeably to the terms of one of the conditions in the same.
The N. A. Co. having shortly afterward failed, the plaintiff procured from the defendants' agent another policy, — in the Germania Co., of which he was also agent, — and placed the policy in suit in his hands. The agent knew all the circumstances of the various insurances, but did not cause the company's consent to the second insurance to be endorsed. Held, that these facts were evidence from which the jury might find that the defendants had waived the condition in the policy requiring their absent to such further insurance, and this, notwithstanding the defendant company had no other knowledge of these circumstances than the knowledge of the agent, which was held to be the knowledge of the company.
The defendants contending that the property was misdescribed in the application, but it appearing that the agent knew all the circumstances on which the description depended — Held, that the knowledge of the agent was the knowledge of the defendants, and that in the absence of collusion the company were bound by the agent's representation.
The plaintiff, having purchased a mortgage of the furniture and personal property in the house without the general owner's consent, took possession of the same, made preparations for selling it in the house, and exhibited it to persons desirous of purchasing. The court instructed the jury that if this were done in good faith and by an innocent mistake, the plaintiff would be protected by the provisions of Gen. Stats., ch. 157, sec. 2; but the court having also instructed them that the amount insured ought to have been diminished as much as the premium ought to have been increased on account of such increased risk, instead of in the same proportion — Held that, whether the statute were rightly applied or not, this was erroneous.
The foreclosure of the plaintiff's mortgage having been effected after the fire and before the commencement of the action — Held, that this did not prevent the plaintiff from maintaining his action for the amount remaining due on his mortgage.
[fn*]CUSHING, C.J. [fn*] SMITH, J., having been of counsel, did not sit.
The first question which arose at the trial was on the motion for a nonsuit. The first reason assigned was the fact that after the fire the foreclosure of the mortgage had been completed, and therefore the plaintiff had no longer any interest as mortgagee. It seems to me to be plain enough that the plaintiff's rights in this regard were fixed given the property was destroyed by fire. I do not see how the foreclosure of the mortgage could in any way have operated to defeat the plaintiff's right to recover the amount which remained due on the mortgage.
It is true that by our law the foreclosure of the mortgage is prima facie payment of the mortgage debt, and if the objection had been made in this form it would have compelled the plaintiff to go forward, and, by showing the value of the property which remained after the fire, show the amount of his debt still remaining unpaid. This being an objection which might have been removed by evidence if seasonably taken must be considered as waived, and this branch of the motion was rightly overruled. The other branch was also rightly overruled, as will be shown hereafter.
The first instruction requested by the defendants, and the instructions actually given on the same subject, may be considered together.
The case shows that at the time of the making of the policy in suit it was not intended that the N. A. policy should be cancelled. It was not until a fortnight after the making of this policy that the plaintiff got notice that the N. A. Co. had suspended, and, on taking out the Germania policy, agreed that the N. A. policy should be cancelled. It would be difficult, I think, according to the ordinary rules of evidence, to prove an agreement to waive that condition previous to, or at the time of, making the policy with the condition in it; but I think that it was the duty of the agent to cause the proper endorsement to be made on the policy at the time it was issued, and he not having done so, and the plaintiff having paid his premium and taken his policy relying upon this, that the defendant company would be estopped from taking the objection; so that practically the result is the same, and there would be no reason to disturb the verdict for this cause.
If these views are correct, the portion of the charge numbered ten is, in this particular, immaterial.
So far, then, the instructions of the court to the jury were well enough, and the second branch of the motion for a nonsuit is also disposed of.
The evidence tended clearly to show that it was agreed that the Market policy was cancelled, and that it was cancelled. The term cancel is, I think, often used as equivalent to destroy, or put an end to, and probably is not often understood by parties who use it as meaning the actual erasure of a writing, or the destruction of the paper on which it is written. I cannot doubt, when the policy was surrendered to the agent, and the unused premium restored to the insured for the purpose of putting an end to the policy, that an end was put to it, unless it should appear that the agent assuming to do this had not the necessary authority. All we know from the case is, that he returned the policy to the company, and that nothing more was heard of it. The request of the defendants on this point was rightly denied.
The instructions numbered five, six, seven, and eight — so far as related to subsequent insurance, on the authority of Clark v. Ins. Co., 40 N.H. 333, Barnes v. Ins. Co., 45 N.H. 23, 24, and Pierce v. Ins. Co., 50 N.H. 297 — were, as to the necessity of endorsing the existence of the Germania policy on the policy in suit, entirely correct. On the authority of Marshall v. Ins. Co., 27 N.H. 164, and Campbell v. Ins. Co., 37 N.H. 35, and secs. 2 and 3, ch. 157, Gen. Stats., I think that the instructions numbered one, two, three, and four were substantially correct, with this exception, — that in so far as section 2 is relied on to prevent the consequences of a mistake, inasmuch as the evidence tended strongly to show that if the character of the house and circumstances connected with it had been made known to the secretary of the company the premium would have been much larger, the jury should have been instructed that if they found the premium would have been larger were it not for this mistake, the amount of insurance should be proportionally diminished, — that is, as I understand, the amount insured should be reduced to such a sum as the amount of premium actually paid would purchase. For example: if there were an insurance of $1,000 at one per cent., which but for an innocent mistake in the application would have been two per cent., the insurance must be reduced from $1,000 to $500. I think this a material error in the charge.
As the case finds that the agent, Davis, had full knowledge of all the circumstances about the occupation of the house, and as the agent's knowledge is to be taken to be the defendants' knowledge, the instructions numbered there and four seem to be immaterial.
The instructions requested by the defendants, numbered two and three, have been sufficiently disposed of in considering the instructions actually given.
The case does not show that any evidence was offered tending to prove over-insurance, so that the requested instruction numbered four was uncalled for.
It is not necessary to determine whether the statute, — Gen. Stats., ch. 157, sec. 2, — was rightly applied in the instructions numbered eleven and twelve, as the instruction in regard to the deduction to be made in the amount insured appears to have been erroneous. The instruction was, that the jury should deduct the amount by which the premium ought to have been increased from the amount of insurance. If, for instance, the jury had found that the premium should have been increased one dollar, they would by this rule have deducted one dollar from the amount insured, whereas, in this case the amount of insurance should be reduced by 1-21 part, which would have been nearly $200, viz., $190.48.
It is suggested in the plaintiff's argument, that, as the verdict shows that the jury made no deduction, the mistake in the charge could have done no harm, but I am not satisfied that the result would have been such if the jury had been made to understand how largely the amount insured would have been reduced by a small increase in the amount of premium.
The defendants' counsel in his brief takes the position that the action cannot by maintained in the name of the present plaintiff; but I cannot find in the case any evidence that such position was taken at the trial, and it must therefore be considered as waived.
In the case of Chamberlain v. Insurance Company, post, decided at this (March) term, it is held in a similar case that the action was rightly brought.
For the error in instructions eleven and twelve, the verdict must be set aside.
LADD, J.
The instruction as to the deduction to be made in case the jury should think the risk was increased, was clearly and confessedly wrong, inasmuch as they were directed to deduct the amount they thought the premium ought to have been increased, instead of a sum proportionate to their estimate or the increase of the risk. But it is said the verdict shows conclusively that this erroneous rule was not used by the jury in assessing the damages, because they have the full amount of the policy; that no deduction whatever being made, it is certain the rule was not applied; and, therefore, the defendants were not prejudiced, and the verdict should not be set aside. If we were dealing with a pure matter of mathematics, this would be so, undoubtedly. But when we observe that the instruction, in its practical application, required the jury to deduct only one dollar where they should have deducted about two hundred, it seems to me impossible to say that the defendants were not prejudiced. It is not difficult to suppose that a jury might consider one dollar or five dollars as too trifling a sum to be deducted from a verdict of four thousand dollars, when, had they understood the practical effect to be a deduction of two hundred or one thousand dollars, they might have regarded the matter in quite a different light. Upon this ground I am of opinion that the verdict should be set aside, without inquiring whether the mistake, if there was one, comes within the scope and application of Gen. Stats., ch. 157, sec. 2, or not.
FOSTER, C.J., C. C. I entirely concur in all the views expressed by my learned brethren, suggesting, as they have done, that it becomes unnecessary to consider the question of the applicability of ch. 157, sec. 1, Gen. Stats., to the present case; but, for a consideration of that matter, I refer to my opinion in Chamberlain v. New Hampshire Fire Insurance Company, post.
Verdict set aside and a new trial granted.