Lee v. New Hampshire Insurance Co.

Clark, C. J. Plaintiff Lee owned a hotel at Dunn wbicb was under mortgage to bis coplaintiff, Godwin. Best was agent for eacb of tbe -three defendant insurance companies. He insured tbe hotel, in August, 1909, in tbe Shawnee Insurance Company, for $1,000; in tbe Eoyal Insurance Company, for $1,000; and in tbe New Hampshire Insurance Company, for $1,000. Tbe premiums on these policies were paid by Lee and tbe policies were delivered to Godwin, mortgagee. They contained a provision: “Any loss that may be ascertained and proven to be due tbe assured under bis policy shall be held payable to E. L. Godwin, trustee, as interest may appear.” On 14 October, 1909, at tbe instance of Strudwick, tbe special agent of tbe Shawnee Insurance Company, who came to Dunn and offered that bis company would carry tbe entire $3,000, a policy for that amount was .issued by tbe Shawnee Insurance Company, and Best notified tbe Eoyal Insurance Company and tbe New Hampshire Insurance Company that they bad been relieved of all liability upon their respective *448 policies, which had been canceled, and that the entire $3,000 insurance had been taken over by the Shawnee Insurance Company. Best also wrote to Lee, who was in Georgia, inclosing him this -new policy in the Shawnee Insurance Company for $3,000, stating that the change would save Lee $5 and requesting him to return the three policies of $1,000 each. Lee admits receiving the new policy and the letter and made no objection, though he did not return the three policies as requested. On the same day that Best wrote Lee he also notified the general agents of the Shawnee Insurance Company that he had canceled the three $1,000 policies mentioned above and had issued in lieu thereof a new policy in the Shawnee Insurance Company for $3,000. They received this letter and re-insured the entire risk of $3,000 in four other companies, retaining a profit for the Shawnee Insurance Company on the transaction. On 27 November, 1909, the hotel was burned. On G January, 1910, the general agents of the Shawnee Insurance Company wrote to Best claiming the premium on the $3,000 policy. At the time of the fire Lee had retained possession of the $3,000 policy for a month and 13 days without having made any objection. The $3,000 policy contained no clause making the loss payable to Godwin, as his loss might appear, and Godwin had no notice of the substitution of the $3,000 policy for the three $1,000 policies which had remained in his possession, a fact which doubtless accounts for their not being returned to Best by Lee on receipt of the new policy for $3,000. There is neither allegation nor proof that calls in question the entire good faith of all the parties to this transaction. Upon the above facts it is clear, without requiring the citation of authorities, that both the Shawnee Insurance Company and the plaintiff Lee are estopped and concluded by their conduct and acts to deny the cancellation of the three* original policies of $1,000 each issued in August, 1909, and the validity of the substitution of the $3,000 Shawnee policy in lieu thereof. The plaintiff Lee is therefore entitled to judgment against the Shawnee Insurance Company alone, which is liable to said *449 Lee in the sum of $3,000 according to the terms of the last policy issued by it. The Shawnee Insurance Company wanted all the business, and it has got it. As to the plaintiff Godwin, it is admitted that the realty after the destruction of the hotel is sufficient to pay off his mortgage, so in no event does he run the risk of any loss. But we are of opinion that, if he so desires, he is entitled to have judgment entered up for one-third part of his debt against each of the three original policies, to be canceled, however, by payment to him of the amount of his loss, which Lee is adjudged to make to him out of the recovery on the $3,000 policy held by Lee against -the Shawnee Insurance Company. Godwin is entitled to this because the release of the Royal Insurance Company and the New Hampshire Insurance Company was made without his knowledge and assent, and is only binding between the parties thereto, to wit, the plaintiff Lee and the Shawnee Insurance Company. As thus modified, the judgment of the court below will be Affirmed.