Battles v. York Co. Mutual Fire Ins. , 41 Me. 208 ( 1856 )

Rice, J.

Section 11, of the defendants’ charter, reads as follows: — “ Said company may make insurance for any term not exceeding six years; and any policy of insurance issued by said company, signed by the president, and countersigned by the secretary, shall be deemed valid and binding on said company in all cases where the assured had a title in fee simple, unincumbered, to the building, buildings or property insured, and to the land covered by said buildings; but if the assured has a less estate therein, or if the property or premises are incumbered, policies shall be void, unless the true title of the assured and the incumbrances on the same, are expressed therein.” By the terms of the policy, the application, which is in writing and signed by the plaintiff, is made part of the policy; and such application is to be taken as part of the contract of insurance, in the same manner it would be if incorporated into the policy itself. , Philbrook v. New England M. F. Ins. Co. 37 Maine, 137; Williams v. same, 31 Maine, 219. In such case, all the material statements in such-application are changed from representations into warranties. Burritt v. The Saratoga Co. M. F. Ins. Co. 5 Hill, 188; 31 Maine, 219.

The 7th section of the defendants’ charter, gives them a lien upon the property insured, for the sum of the deposit note and the cost which may occur in collecting the same, which lien continues during the existence of the policy and the liability of the assured therein, notwithstanding any transfer or alienation.

The 11th interrogatory in the plaintiff’s application is as follows: — “Is the property incumbered? If so, how much, and to whom?” The answer is, “mortgaged for $1100 to Wm. Cressey.”

A want of truth in a representation is fatal or not to the insurance, as it happens to be material or immaterial to the risk undertaken; but when the thing is warranted to be of a particular nature or description, it must be exactly as it is represented to be, otherwise the policy will be void, and there is no contract. Angell on Ins. § 147.

It is sometimes the practice of companies, who insure against fire, to make inquiries of the assured, in some form, concerning all matters which are deemed material to the risk, or which may affect the amount of premium to be paid. This is sometimes done by conditions annexed to the policy, and sometimes by requiring the applicant to state particular facts, in a written application for insurance. When thus called upon to speak, he is bound to make a true and full representation concerning all matters brought to his notice. Burritt v. Saratoga Co. M. F. Ins. Co., 5 Hill, 188.

A warranty by the assured in relation to the existence of a particular fact, must be strictly true, or the policy will not take effect; and this is so whether the thing warranted be material or not. It would be more proper to say that the parties have agreed to the materiality of the thing warranted, and that agreement precludes all inquiry on that subject. 5 Hill, 188.

If. the application contain an interrogatory whose aim is to ascertain whether there be an incumbrance on the property proposed to be insured, and the answer do not disclose the extent of that incumbrance, the policy will be void. Leohner v. Home Mutual Ins. Co., 2 Bennett, 247.

The insured must represent truly his interest in the property insured or his policy will be void. Brown v. Williams & Thomaston M. F. Ins. Co., Trustees, 28 Maine, 252.

A representation made to a mutual fire insurance company, in answer to their questions, by one applying for insurance on a building against fire, that there is no incumbrance thereon, is a material representation, which if false avoids the policy, although the company be established by the laws of another State, and may not therefore have a lien on the property insured. Davenport v. New England M. F. Ins. Co. 6 Cush. 340; Packard & al. v. Agawam M. F. Ins. Co. 2 Gray, 334.

Nor is the result changed if the incumbrance has been placed upon the property by a party other than the assured. Warren v. Middlesex Mutual Assurance Co. 21 Con. 444.

The case finds, that at the time of the application the property insured was not only encumbered by the mortgage to Cressey, disclosed by the plaintiff, but was also under mortgage to Sydenham Bridgham for twelve hundred dollars, which fact was well known to the plaintiff.

But it is contended that the existence of the Bridgham mortgage is wholly immaterial, as Cressey had agreed to apply the payments from the plaintiff, as fast as made, to the extinguishment of the Bridgham mortgage, and had actually left the plaintiff’s notes and mortgage in the hands of the witness Andrews, for that purpose. We think this answer cannot avail, because the mortgage of the plaintiff to Cressey was not so large by one hundred dollars as was the mortgage from Cressey to Bridgham, so that, if it had been duly assigned and appropriated in payment, it would not have discharged the Bridgham mortgage by one hundred dollars.

Should it be suggested that the Cressey mortgage, as subsequently enlarged, was sufficient to pay the Bridgham mortgage, the answer is, that increase was made in fraud of the rights of the defendants, who occupy the condition of subsequent purchasers, or encumbrancers, and against whom that increase is absolutely void, if indeed it would not, of itself, avoid the policy.

At the argument much stress was laid upon the fact, that in the offer by the defendants’ counsel to prove that the property was over valued, for the purpose of reducing the damages, should the plaintiff be entitled to recover, they did not contend that there was any actual fraud, but insisted that the facts show a legal fraud. This proposition was confined to the question of damages, and cannot in any way affect the questions which have already been considered.

From these considerations, being of the opinion that the action cannot be maintained, it becomes immaterial to examine the rule of damages laid down by the presiding Judge, or to determine whether the evidence upon that point was admissible or otherwise. A nonsuit must be entered.

Tenney, C. J., and Hathaway, Cutting, and Goodenow, J. J., concurred.