Hadley v. Insurance Co. , 55 N.H. 110 ( 1875 )

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.