Bersche v. St. Louis Mutual Fire & Marine Insurance

Bates, Judge,

delivered the opinion of the court.

Plaintiffs below (respondents) sued the defendant (appellant) on a policy of insurance against loss by fire on their starch manufactory, in St. Louis, which was burned.

It was provided in the policy that the respondents’ application for insurance and also the charter of the company formed parts of the policy. In the charter (sec. 21) it was provided that if the assured have a lease estate, or if the premises be encumbered, the policy shall be void unless the true title of the assured and the encumbrance be expressed therein.

The application for insurance is a printed form, with blanks to be filled by the applicant. It contained certain printed questions, io which the answers of the applicants were made in writing. Among them was this: “ What is the title ? and whether encumbered by mortgage or otherwise, and to what amount ?” The answer given was “ Real estate, encumbered to the amount of f>-.”

At the trial, the defendant proved that the property was encumbered with deeds of trust, judgments, and mechanics’ liens, to a large amount; and the plaintiffs proved that after the fire the defendant gave to the plaintiffs notice of its intention to rebuild the premises destroyed by fire, as by the policy it had the privilege of doing.

The court instructed the jury, in effect, that the notice given by the defendant of its intention to rebuild was a waiver of its right to set up as a defence to the action, that *560the plaintiffs had not, in their application for insurance, stated the amount of the encumbrances; and, secondly, that the statement in the application (which formed a part of the policy) was an expression of the encumbrances upon the property within the intent and meaning of the twenty-first section of the charter.

The defendant now complains that both of these instructions were erroneous. Reversing the order in which they are copied in the record, the second instruction will be considered first.

The language of the charter does not require that the amount of the encumbrances should be stated. It is that the policy shall be void unless the encumbrances be expressed thereon. It was expressed thereon that the property was encumbered; so that, if the amount of the encumbrances had been deemed material to the risk, the defendant had information of their existence, and could have ascertained their amount, and it may be did so. (1 Phil. on Ins. 367; 7 Gray, Mass. 261.) All the useful purposes of an expression on the policy of the encumbrances seem to be fulfilled by the expression made. Indeed, if the defendant be particularly anxious now to know the amount of the encumbrances, which knowledge it did not desire when the policy was made, it may be answered that the defendant did know their amount, as they were all by judgments, mechanics’ liens, and recorded deeds, of which all persons are presumed to have notice. At any rate, the parties themselves have given the same construction to that expression; for it would be unjust to presume that the defendant would be guilty of so great a villainy as to issue a policy which it knew at the time was void and valueless. This construction, being adopted by the parties, and reasonable in itself, should prevail, and the instruction given by the court in accordance with it was correct ; and as that instruction necessarily disposes of the defence, it is unnecessary to say anything about the other.

Judgment affirmed.

Judges Bay and Dryden concur.