Gillett v. Liverpool & London & Globe Insurance

Lyoh, J.

To strengthen his security for the mortgage debt by an insurance upon the mortgaged property, two methods were open to the plaintiff. He might have taken a policy directly to himself, insuring his mortgage interest alone, if he could find an insurer willing to issue such a policy; or he could obtain a policy running to the mortgagors, stipulating that the loss, if any, should be paid to him as his interest should appear. Perhaps such a policy would not be an insurance of the mortgage interest, as such, but probably would cover such interest. Either mode would protect the plaintiff’s security under his mortgage, but with this difference: had the pol^ run to himself alone, insuring only his mortgage interest, it would not be defeated by an unauthorized insurance upon the same property, obtained by the mortgagors, while a policy running to the mortgagors, insuring the property generally (as in the present case), would be defeated by such unauthorized insurance.

*208, The plaintiff did not stipulate with the agent of the defendant company, Mr. Huntington, for a policy to himself, insuring only his mortgage interest. The only testimony on the subject was given by the plaintiff himself, and is as follows: “ I applied to Mr. Huntington for the insurance on this property after the mortgage was executed. I received this policy upon the application.” In answer to the question by his own counsel, “At the time when you applied to Mr. Huntington for this insurance did you state to him what interest you had in the property?” he further testified: “I think I did tell him that I had a mortgage on the property, and wanted to insure my interest in it.” He further testified that he paid the premium for such insurance. Thus, it is undisputed that the plaintiff applied for an insurance upon the mortgaged property to secure his interest therein under his mortgage, without any agreement or reservation as to its form or the stipulations it should contain. The agent issued the policy in suit upon such application, which gives the plaintiff the security he desired. The plaintiff accepted it as a compliance with his application, and held it nearly a year before the property was burned, without making any objection that it did not comply with the original parol contract for the insurance. We think it too late for the plaintiff to be now heard to allege that the policy does not contain the terms of the contract of insurance which the parties made, even did the testimony tend to show (which it does not) that a parol agreement was in fact made to the effect that the policy should issue to the plaintiff, insuring his mortgage interest alone.

Much weight is given in the argument of counsel for the plaintiff to the fact that the plaintiff paid the premium for the insurance. But this fact must be considered in connection with the covenant in the mortgage that the mortgagors should insure the property, and, failing to do so, *209that the plaintiff might insure the same, and that the expense thereof should be added to and constitute a part of the mortgage debt. So, when the plaintiff says he paid the premium for the insurance, the effect of his testimony is that he thereby increased the mortgage debt by the sum so paid. Moreover, the above covenant clearly contemplates an insurance of the mortgagors’ interest in the property, which could only be effected by a policy running to them. The covenant is ample authority to the plaintiff to insure the property in their names.

Having thus determined that the plaintiff is bound by the stipulations in the policy in suit, it necessarily results. that the obtaining by the mortgagors of any unauthorized insurance on the same property invalidates the policy, under the stipulation therein against additional insurance without the consent of the defendant company. Has this stipulation been violated? Mrs. York, one of the owners of the property, obtained policies in her name alone in March, 1884, on substantially the same property, for §4,000, without the consent or knowledge of the defendant company. Hothing appears adverse to the validity of such additional insurance. The policy in suit permitted concurrent insurance to the amount of §2,000 only. Had this insurance been effected by M. A. York & Go., it would doubtless have defeated the policy. It may be conceded that these policies for §4,000 insure only the interest of Mrs. York in the insured property, which, presumably, is one hall' thereof.

It is maintained by counsel for plaintiff that, because the policies -were obtained by and issued to Mrs. York alone, the §4,000 insurance is not a breach of the stipulation against other insurance. The rule invoked to support this proposition is thus laid down in 2 Wood on Ins. sec. 371: “In order to amount to other insurance, the interests covered by the policies must be identical.” We think such *210interests are identical in the present case. The policy in suit insures the interest of Mrs. York in the insured property, and the additional policies issued to her insure the same interest. We find no established rule that because Solomon York’s interest in the property was insured by the policy in suit, and not by the $4,000 policies, the latter policies do not constitute double insurance. In Continental Ins. Co. v. Hulman, 92 Ill. 145, it was held that an unauthorized insurance by the wife was a breach of a stipulation against other insurance in a former policy on the same property*, issued to her and her husband. Such we think the Jaw. Several distinctions between the Illinois case and the one under consideration are noted by counsel, some of which are real and some are not, but we think these do not affect the applicability of the rule there laid down, to this case.

The case of Westchester F. Ins. Co. v. Foster, 90 Ill. 121, is relied upon as holding a different rule. The case is this: Foster held a mortgage on certain property*, executed by B. He obtained an insurance upon the property, paid the premium, and, without the knowledge or authority' of B., took a policy in their joint names; the policy1' containing the usual stipulation as regards other insurance. B. had obtained another insurance in violation of the stipulation. The court held that, under the circumstances, the insurance was solely for F.’s benefit, and that the policy* was not invalidated by such act of B. The difference between the two cases is, the policy in the Illinois case ran to Foster, the mortgagee, and in legal effect, as the court held, to him alone, while here the policy runs to the mortgagors alone. This difference is radical and controlling, and calls for the application in this case of a different rule of law.

Another case much relied upon by counsel for the plaintiff may properly be noticed in this connection. It is that of Pitney v. Glen’s Falls Ins. Co. 65 N. Y. 6. Norman and *211George N. Pitney were joint owners of the insured property, which was a quantity of wool. Norman obtained a policy in his own name. Afterwards he told the agent that he had forgotten to mention the interest of George and his intention to have that interest insured. The agent attempted to accomplish that purpose by inserting in the policy these words: “In case of loss, if any, one half payable to George N. Pitney, as his interest may appear.” Under these circumstances, it was held that the interest of George N. in the wool was covered by the policjr. That case does not hold that a breach of a covenant against further insurance would not have resulted, had either of the owners of the wool insured his interest therein in his own name without the consent of the company. Hence the. case is not in point here. That case was decided by a bare majorit}^ of the commission of appeals; Lott, 0. C., and Eael, C., dissenting. "We should hesitate to indorse all the doctrines there asserted without further examination.

We conclude that the policy in suit was invalidated by the unauthorized insurance obtained by Mrs. York, and hence that the court properly directed a verdict for the defendant.

By the Court.— The judgment of the circuit court is affirmed.