Parcell v. Grosser

Mr. Justice Sterrett delivered the opinion of the court, If it were not for the alleged parol agreement in relation to the insurance on buildings, effected by plaintiff prior to the contract of sale, he would undoubtedly have been entitled to a verdict for the premises described in the writ to be released on payment of the residue of purchase money, $1,200, and interest, within such time as the jury might have considered reasonable. As to the terms of the written contract of March 30th, 1872, there is of course no dispute. Plaintiff covenanted therein to sell and convey the premises in controversy to defendant, on or before March 29th, 1874, and in consideration thereof the latter agreed to pay $2,200, $1,000 in hand and the residue in two equal annual payments with interest, with the privilege of paying the whole $1,200 within one year or less from that date. It is further provided that payment of the purchase money is “a condition precedent to the execution of the deed or deeds of conveyance” by plaintiff. It is conceded the hand money was duly paid, but neither of the deferred instalments lias ever been actually paid by defendant. Ills contention is that in equity, as between himself and plaintiff, they have been paid and satisfied ; that if plaintiff had acted in good faith in regard to the insurance policy he would have received the insurance money for the buildings which were destroyed by fire before the first deferred payment matured ; that as the result of his bad faith and gross negligence, insurance money fully equal to the unpaid instalments, and which should have been collected and applied in satisfaction thereof, was wholly lost. Shortly before the contract of sale, plaintiff had effected an insurance on the buildings for $1,500, and testimony was received, under exception, tending to prove that it was verbally agreed between the parties that he should continue to hold the policy as collateral security for the unpaid purchase money, etc.; that in pursuance of a mutual understanding [620] that the arrangement was partly, at least, for the benefit of defendant, he at plaintiff’s request shortly before the fire paid, the only assessment that was made on the policy after the contract of sale; that on the day after the fire, plaintiff in response to notice from defendant visited the premises, and bjr his acts and declarations assured him that he would attend to collecting and property applying the insurance money. The testimony tending to prove these and other corroborating facts and circumstances was fairly submitted to the jury with proper instructions, under which they rendered a verdict for defendant. In so doing, they must have found the facts, in relation to the insurance, as claimed by defendant. It was therefore the duty of plaintiff to have taken the proper steps to collect the insurance money. It is contended, however, on his behalf that, assuming the facts to be as the jury must have found them, no such duty rested on him; and, moreover, that by the contract of sale, the policy, not being transferred, became void. There is nothing in the facts of the ease or the law applicable thereto, that Avarrants either of these conclusions. The effect of a mere contract of sale, on the relative rights of the parties thereto and their interest in existing policies of insurance, was considered in The Perry County Insurance Co. v. Stewart, 7 Harris, 45; Insurance Co. v. Updegraff, 9 Harris, 513; Reed v. Lukens, 8 Wright, 200; Hill v. Cumb. Valley M. P. Co., 9 P. F. Smith, 474, and cases therein referred to. In the case first above cited it is said, “ where one has entered into an agreement for the sale of his insured property, but has not made a conveyance thereof, nor received the purchase money, his interest in the property and policy is not thereby parted Avith, so as to bar his right of action on the happening of a loss.” It is also held in Reed v. Lukens, supra, that “ the money due on a policy of insurance for a loss by fire, occurring between the date of such contract and the time fixed for delivery of deed, as between the company and the vendor by whom it was insured, belongs to the latter, but as he is a trustee for the vendee he must account in equity to his cestui que trust for the insurance money.” The same principle is more fully elaborated in Hill v. The Cumb. Val. M. P. Co. supra. This case is also authority on the point that 'the policy was not avoided by the contract of sale. There has been something said about the company having cancelled the polic3r, but we fail to see anything in that position. They had no right to cancel it Avithout returning a ratable proportion of the premium to the assured for the unexpired time, which was not done. The conclusion of the jury vras warranted by the laAv, and the facts found by them. The only question as to which we [621] had any doubt, is whether the admission of evidence to prove the parol agreement as to the insurance policy, impinged on the well known rule against the admission of parol testimony to vary the terms of a written contract. We are not satisfied it did. Moreover, the agreement in relation to the insurance was collateral to and not an essential or necessary part of the contract of sale. It practically constituted a separate and distinct agreement, which was afterwards recognized by the parties and acted upon when plaintiff called on defendant to pay the insurance assessment. The evidence as to their understanding in regard to the policy of insurance was full, clear and explicit, supported by four witnesses, one of whom was plaintiff himself. The case was well tried, and the result reached by the verdict was just and equitable. There is nothing in the case to indicate that the plaintiff in the exercise of reasonable diligence would not have received the insurance money or at least enough thereof to satisfy the deferred payments. It was his duty to do so. Instead of performing that duty, he acted in bad faith, misled the defendant, and the result was the insurance money was lost. The jury came to the conclusion that plaintiff should bear the loss, and in that we think they were right. Judgment affirmed.