Heller v. Royal Insurance

Opinion, Me. Justice Mltchell : The facts in this case, as they appear in the affidavit of defence and the plaintiff’s statement, are practically undisputed, and they establish a complete defence. Defendant, by its policy, agreed to indemnify plaintiff for “ any loss accruing to her by reason of having to pay rent for the (therein) described [160] building such time or times as the building may be untenantable by reason of fire or fires occurring during the continuance of this policy.” A fire occurred in January, 1888, and the landlord entered to rebuild in J uly. That, as a legal consequence, would have suspended the payment of rent. It was a rescission pro tanto of the lease : Magaw v. Lambert, 3 Pa. 444; Hoeveler v. Fleming, 91 Pa. 322. Defendant was liable, under its policy for the rent from January to July, and that amount it paid. But the plaintiff and her landlord entered into an agreement by which the former agreed to continue to pay rent during the rebuilding of the store, and, in consideration therefor, the latter agreed to rebuild with certain improvements, and to give a new lease on more favorable terms. This agreement discharged the defendant. The payment of rent under it by plaintiff was a voluntary undertaking, not a legal obligation under the first lease, against which alone the policy undertook to indemnify her. It is set out in the pleadings that the landlord was insured as to his rent in the Pennsylvania Fire Insurance Company, and that that company, asserting a right of subrogation to the landlord’s claim for rent against the tenant, procured the landlord not to re-enter until the plaintiff made the agreement in question, and that by that agreement it was expressly stipulated that the rights and liabilities as to rent, and as to claims under their respective insurance policies, should not be affected. But these facts are entirely immaterial. If true, they showed a fraudulent attempt on part of the plaintiff, the landlord, and the Pennsylvania Fire Insurance Company, to shift a burden which belonged on them to the defendant. But, even if there was no such fraudulent purpose, the effect of the agreement was to continue upon the defendant an obligation from which the law.relieved it, and no stipulation between the other parties, without its consent, could accomplish such a result. It is said that the hardship of plaintiff’s situation forced her to make the agreement, and that without it the landlord would not have re-entered, and the defendant would then have been liable for an entire year’s rent. Perhaps so; perhaps not. What the landlord would have done there are no means of ascertaining, but what it was his interest to do is clear enough. He might have lain by and collected his rent from plaintiff till [161] the end of her lease, blit then he would have had to lose rent while he rebuilt; or, he might have rebuilt during her lease, and looked to his insurance for indemnity while the rent was suspended by the rebuilding. It was manifestly his interest,' therefore, to enter and rebuild during the running of plaintiff’s lease and his own policy in the Pennsylvania company. He had nothing to gain, and something to lose, by delay. The hardship in plaintiff’s situation was in having an insufficient insurance. She was bound to pay rent for three years, and only indemnified for one. It was her interest, therefore, to have the rebuilding done as soon as possible. The honest and proper course for all parties would have been to rebuild at the earliest convenient time. The plaintiff would then have paid rent until the rebuilding commenced, and would have been indemnified by the defendant. The rent would have been suspended during the rebuilding, and the landlord would have been indemnified by the Pennsylvania company. No one had anything to gain by departing from this plain course, except the Pennsylvania company, which, if the scheme had succeeded, would have transferred its own proper loss to the defendant. But, when the parties undertook to vary the defendant’s contract liability from that which the law imposed, their action was ineffective for such purpose, and as to the defendant totally void. Reference was made during the argument to the correspondence, and a claim suggested that the present defence had been waived. But such a view is untenable. The meaning of the letter of defendant’s counsel, dated April 17, 1888, is entirely clear. The defence which it says will not be raised is that defendant will be “ discharged from liability by reason of the landlord entering for the purpose of rebuilding.” Of course not. The fire had taken place in the preceding January, and nearly three months’ rent was due at the date of the letter. From liability for this rent, and such other as should accrue up to the entry of the landlord, such entry would not be a dis^ charge, and the letter says that such a defence will not be raised. But then, to make certain that its meaning is not more than this, it go.es on to say explicitly that defendant will not consent to anything which will vary the legal effect of tlie landlord’s entry, to wit, the suspension of the rent during the [162] rebuilding. There is here no waiver of any of defendant’s rights. Judgment reversed, and procedendo awarded.