Gale v. Belknap County Insurance , 41 N.H. 170 ( 1860 )

Bell, C. J.

Tbe insurance company resist tbe payment of tbe loss sustained by tbe plaintiff, on tbe ground tbat before tbe loss occurred tbeir policy bad become void by its own terms, by reason tbat tbe insured'bad procured another insurance on tbe same property, without tbe consent of their directors.

It is not and cannot be questioned here, tbat a policy, with stipulations like that in suit, is avoided by a subsequent insurance, obtained without the assent of the insurers. Blanchard v. Atlantic Insurance Company, 33 N. H. 9; Fabyan v. Union Insurance Company, 33 N. H. 203. But tbe plaintiff contends that he never accepted the second policy; and that if he had, it was by its terms not valid nor binding on the insurers, because of the previous insurance in the defendant company — the last policy containing similar provisions as to other insurance on the property, to those contained in the jiolicy in- suit.

By the law now in force the plaintiff is a competent witness, and his testimony, it is agreed, would prove his intention to hold under the Belknap policy, and not under the subsequent policy of the Gilmanton company; that be had no design to be insured in both ; and that he went twice from his.house the week before the fire, to see the agent of the latter company, and to return the policy, which he took with him for that purpose; but he did not find him at home. But, it distinctly appears that before the fire occurred he said nothing, either to the agent or to any one else, indicating an intention to decline, or not to accept the last policy; and we think it very clear that a policy issued upon his own application cannot be affected by any mere intention or secret determination of his own mind, not communicated to others. Its effect must depend on/and be determined by, his acts and declarations communicated to others. If acts or declarations material in the case are proved, and a question arises as to the character, purpose or effect of them, the intention of the party acting or speaking may be shown, either directly or from circumstances. Martin v. French, 24 N. H. 440; Norris v. Morrill, 40 N. H. 395.

As to the second point, we regard the law as settled, that where, in a policy of insurance against fire, it is stipulated that the policy shall be void if any other or subsequent insurance upon the property shall be, or be made, without the consent of the company or its directors, and another is made by other insurers without such consent, which contains a similar provision, the second policy is inoperative and invalid; it does not bind the insurers, and therefore does not avoid the first policy.

This point was expressly decided in Jackson v. Massachusetts Insurance Company, 23 Pick. 418. The same principle was applied in Clark v. New-England Insurance Company, 3 Cush. 342, where it was held that if a second policy was void, for misrepresentation by the insured, of facts material to the risk, as, for instance, by denying the existence of an incumbrance on the property, it would not invalidate the previous policy; and in Stacy v. Franklin Insurance Company, 2 W. & S. 506, 544, it was held that an insurance, to avoid a policy, must be a valid and legal policy, and effectual and binding on the assurers.

This question was incideu tally considered in the Atlantic Insurance Company v. Goodall, 35 N. H. 232, where it was said, upon the authority of Jackson v. Massachusetts Insurance Company, before cited, and of Barrett v. Union Insurance Company, 7 Cush. 179, where numerous authorities are cited, that it seems clear that the original insurance must always defeat the operation of that which is subsequent, when the same provision here in question is found in both charters, and its own validity must always remain unaffected by such second and abortive policy.

One-ease onlyis_ni±ed in support of the contrary doctrine — that of Carpenter v. Providence Insurance Company, 16 Peters 495 — where it was held that where a policy was procured by misrepresentation, it is not, therefore, to be treated as utterly void ab initio. It is merely voidable, and may be avoided upon due proof of the facts; but until avoided it must be treated, for all practicable purposes, as a subsisting policy.

The weight of this decision is not a little impaired by the case of Carpenter v. Providence Insurance Company, 1 Story 57, where the same judge, upon the same policy and upon the same facts, held, only three years before, that the policy Avas utterly void.

In our judgment neither of these decisions was correct. The policy was neither utterly void, nor was it voidable, in the sense that it Avas a valid and binding contract, and to be so treated, for all practical purposes, until it was avoided. On the contrary, it was an instrument invalid and inoperative, binding upon nobody, until and unless it should be ratified and confirmed by some further act on the part of the assurers, with knowledge of the facts which cause the invalidity, either by an express assent to be bound, or by some implied waiver of the objections. Hale v. Union Insurance Company, 32 N. H. 299; Leathers v. Farmers’ Insurance Company, 24 N. H. 262.

There is an intrinsic absurdity in holding that to be an insurance by which a party is bound to make good another’s loss, only in case he pleases to do it.

Judgment for the plaintiff.