Lindley v. Union Farmers' Mutual Fire Insurance

Barrows, J.

The defendants place their defense wholly on the ground that the plaintiff, in violation of the terms of the policy on which he declares, made a subsequent insurance upon the samo property, and did not give notice thereof with all reasonable diligence to the defendant company, and have the same indorsed on his policy, or otherwise acknowledged by them in writing.

It is admitted by the defendants, that the buildings insured were acciden tally destroyed by fire before the expiration of the term for which they were insured, and that preliminary proof of loss was received by them without objection. It is admitted by the plaintiff, that some mon ths before the fire he procured a policy in the Hartford Fire Insurance Company, for a term of three years upon these buildings and certain personal property therein contained, for $2100, $1500 of which was on the buildings, upon which policy, after the fire, he brought suit, which the Hartford Company compromised, after it had been one term in court, by the payment of $1000, for which plaintiff canceled and surrendered his policy in that company. But the plaintiff contends that his policy in the Hartford Company was invalid, and that he could not have compelled that company by law to pay his loss thereon, on account of a stipulation which it contained, that “if the assured shall have, or shall hereafter make any other insurance on the property hereby insured, whether such other insurance is valid or invalid, without the consent of the company written hereon . . . this policy shall be void.”

The defendants not questioning the proposition that the Hartford policy was void by reason of this stipulation and the prior insurance in the defendant company, endeavor to maintain, as matter of law, that the cases in Massachusetts, in which it is hold that to avoid a policy containing a clause against subsequent insurance without notice, the subsequent insurance must be by a valid and legal policy, are likely to lead to fraudulent practices, and ought not to be followed, that they have never yet been adopted in this state, or received any countenance except in a dictum in Philbrook v. N. E. Mut. Fire Ins. Co., 37 Maine, 137, that they are in conflict with decisions of the supreme court of the United States, and of New York, and that the true rule is, that “if the second policy at the time it was made was treated by all the parties thereto as a valid and subsisting policy, and has never in fact been avoided,” then a prior policy containing terms and conditions with respect to subsequent insurance like the one here in suit will be void. The defendants further contend that the plaintiff is estopped from denying the validity of the policy in the Hartford Company, by virtue of his reception of a valuable consideration in settlement of his suit thereon.

That there is a direct conflict between the decisions of the Massachusetts court in Jackson v. Mass. Mut. Fire Ins. Co., 23 Pick., 418; Clark v. N. E. Mut. Fire Ins. Co., 6 Cush., 342; and Hardy v. Union Mut. Fire Ins. Co., 4 Allen, 217; and those of the United States supreme court, in Carpenter v. Providence Washington Ins. Co., 16 Pet., 495; and the supreme court of New York in Bigler v. New York Ins. Co., 22 N. Y., 402, upon the principal point here raised, cannot be denied.

The doctrine of the Massachusetts court is supported by the decision of the supreme court of Pennsylvania, in Stacey v. Franklin Fire Ins. Co., 2 Watts & Serg., 506; and while a decision of the point by our own court was not absolutely necessary to the conclusion reached in Philbrook v. N. E. Mut. Fire Ins. Co., 37 Maine, 137, it formed so important a step in the process by which the court arrived at the result, that it was doubtless well considered, and substantially agreed to.

The case of Clark v. N. E. Ins. Co., 6 Cush., 342, was carefully considered, the doctrine of the United States court in 16 Pet., thoroughly discussed, and the Massachusetts court adhered to the decision in 23 Pick., 418. The point was up for a recon- ,. sideration in Hardy v. Union Mut. Fire Ins. Co., 4 Allen, 217, a case not distinguishable in its essential facts from the one before us, where the company making the subsequent insurance had recognized the validity of the policy issued by them, and had paid the insured the amount secured by it; and the court reiterated its former decisions of the principal question, and adopted the doctrine asserted in Philbrook v. N. E. Mut. Fire Ins. Co., 37 Maine, 137, with regard to the supposed effect of a payment by the subsequent insurers upon a void policy, holding that the facts which occurred subsequently to the loss did not constitute an estoppel in favor of the defendants.

Yery clearly that must be so; the defendants could be no more injuriously affected by those acts than they would be by a donation of like amount to the plaintiff from any other party. The mere contingency that the company issuing the subsequent policy will do this, does not amount to an insurance. If the rights of the parties are to be governed by a stipulation that the policy granted by the defendants shall be void in case the assured shall afterwards “make any other insurance on the same property,” not made known to the insurers and indorsed or otherwise acknowledged by them, we think both law and logic unite in declaring that an abortive attempt to make insurance does not meet the call nor avoid the first policy.

The Hartford Company have fortified their condition by stipii\ lating for a forfeiture, “whether such other insurance is valid or invalidand this would include a case of simple procurement or holding of a policy whether binding or not. But such is not the condition in the policy issued by these defendants.

We find no such overpowering weight of authority or reason in favor of the defendants’ construction of the terms of this condition, as inclines us to retract the intimation given by this court in Philbrook v. N. E. Ins. Co., 37 Maine, 137. The defendants having agreed to a default unless the plaintiff’s action is defeated by what is erroneously claimed to be a second insurance, the defense fails. There is another view of the case leading to the same result. In 1861, the legislature of this state designing to make the contract of insurance what it purports to be, a contract of indemnity against all fair accidental losses by the perils insured against, enacted among other provisions in c. 34, Laws of 1861, that no breach of any of the conditions or terms of the contract by the insured shall affect the contract unless the risk was thereby materially increased.

This was substantially re-enacted in H. S., c. 49, § 19; and in § 20, it is declared that “all provisions contained in any policy of insurance in conflict with any of the provisions hereof are null and void; and all contracts of insurance made, renewed or extend-' ed in this state, or on property within this state, shall be subject to the provisions hereof.” The defendants claim here to be relieved by this alleged breach of one of the terms of the contract by the insured.

But under the statute provisions just quoted, the plaintiff’s action would not be defeated even by a subsequent valid policy of insurance, unless it also appeared that the risk was thereby materially increased. The case is barren of any such proof. The insurers expressly admit that during the life of the policy the buildings were accidentally destroyed by fire, and that notice of the loss was given to them, which they received without objection. It was against such a loss as they have admitted, that they contracted to indemnify the plaintiff. Defendants defaulted,.

Appleton, C. J., Walton, Dickerson, Danforth and Libbey, JJ., concurred.