Jenks v. Liverpool, & London & Globe Insurance

Loring, J. The question presented by the report (as we construe it) is whether the Chief Justice was warranted in finding for the plaintiff. By the devise to Mrs. Cole, the fee in the land here in question vested in her as of the death of her husband on February 18, 1904. By the sheriff’s deed (dated August 10,1905) all the interest which she had on March 1,1904 (the date of the attachment) passed to the plaintiff subject to Mrs. Cole’s right of redemption. The year in which Mrs. Cole had a right to redeem the plaintiff’s title under the sheriff’s sale expired on August 10, 1906, nearly four months before the date of the fire, which took place on December 5, 1906. The plaintiff therefore was the owner of the fee at that time unless it had been extinguished by the tax title. We cannot assent to the defendants’ contention that it was so extinguished. At the time that the plaintiff bought the land at the execution sale he was the holder of this tax title under a deed dated October 15, 1904. If there was a merger of his rights at that time it ceased on the tax title being redeemed by Buck on October 11, 1906. If it is a fact that the mortgage to Buck is invalid (a question upon which we express no opinion) it does not follow that he can set up the tax title as a paramount title which has matured. Buck sought to redeem the tax title, not to buy it. Even if he had no right to redeem he got no greater rights by redeeming than he would have had if he had had a right to redeem. The defendants have also contended that since Mrs. Cole was a residuary devisee nothing passed to her until it was ascertained that there was a residue. But that is not so. The fee in land which is devised passes to the devisee subject to its being divested by a sale of it to pay debts, if a sale of it becomes necessary and takes place in the administration of the estate. Until a sale takes place the fee is in a residuary devisee. The plaintiff therefore at the time of the fire was the owner [596] of the fee subject to a first mortgage originally made to Adams (which seems to have been reduced to $4,000) and a second mortgage to Buck (the validity of which was questioned by the defendant at the argument) for $10,653.61. Both these mortgages covered other land as well as the land here in question. It was found by the auditor that the loss caused by the fire was a total loss and that the building “ was reasonably worth more than the amount of insurance written on it under the policies issued to the plaintiff.” The defendants have contended that under these circumstances the plaintiff is not entitled to the face of the policies. In support of that contention their counsel has cited cases in which it has been held in Massachusetts that a purchaser who has paid one or more instalments under a conditional agreement of purchase, (i. e. under a purchase where the title is not to pass until the whole purchase money has been paid,) can recover no more than the sum paid by her. Tabbut v. American Ins. Co. 185 Mass. 419. Ryan v. Agricultural Ins. Co. 188 Mass. 11, 13. The insurer’s interest in such a case is not unlike that of a mortgagee who cannot recover more than the amount of the mortgage debt. The same conclusion was reached in Doyle v. American Fire Ins. Co. 181 Mass. 139, where insurance was effected by one who had a tenancy by the curtesy initiate in -real estate owned by his wife as her separate estate. In the case at bar there was no finding by the auditor and no evidence which required a finding by the court that the plaintiff’s equity of redemption was not worth the face of the two policies. We do not mean to intimate that it would have been open to the defendant insurance company to go into this question of fact as to the value of the plaintiff’s equity of redemption. What we now decide is that in the absence of evidence as to its value the owner of an equity of redemption can recover the amount of the physical damage done to the property insured not exceeding the sum named in the policy. On that point Strong v. Manufacturers’ Ins. Co. 10 Pick. 40, is decisive. The learned counsel for the defendants has argued that this cannot be so. His argument (in effect) is that if a house worth $3,000 is insured by a company, by two policies each in the sum [597] of $3,000, one in favor of the owner (the holder of a tax title for example) and the other in favor of a person who has a right to redeem from the owner, it cannot be that each can recover $3,000. The questions involved in the case supposed have been the subject of much consideration in this Commonwealth and the view of the situation which has been adopted is this: Where each person in the case supposed procures insurance on his own account, the fund produced by the fire belongs to the person insured, and the other person (who had an interest in the building burned but no interest in the policy) has no rights (either in law or in equity) to the fund produced by the fire under that policy. The other person did not pay the premiums or agree to pay them, and he could not have been forced to pay them or any part of them if there had been no fire. Consequently he has no interest in the proceeds of the policy in case of a fire. This principle was acted upon in King v. State Mutual Fire Ins. Co. 7 Cush. 1; Suffolk Fire Ins. Co. v. Boyden, 9 Allen, 123, where it was held that (in the absence of a contract to the contrary) a mortgagee who had insured his interest in the property mortgaged had a right to the proceeds of the.policy without assigning to the company his debt against the debtor. His security was impaired by the fire and he had a right to collect from the insurance company the amount of that impairment. The Massachusetts standard form of fire insurance policy now in use contains a contract to the contrary. R. L. c. 118, § 60. This principle was again acted upon in International Trust Co. v. Boardman, 149 Mass. 158, where it was held that an attaching creditor who had insured his interest and had collected the face of his policy did not have to account to the other creditors of the debtor for the proceeds of his insurance, but could keep the proceeds of his insurance and collect the whole of his debt in competition with other creditors of the debtor represented by a common law assignee. In the case supposed the owner lost $3,000 by the building worth $3,000 being burned, unless the other person redeemed. He is entitled to $3,000, the proceeds of his policy, and the person who had the right to redeem the building cannot redeem the fund. The property which the other person had a right to re*deem is less valuable by $3,000 than it was before the fire. He [598] is entitled to S3,000, the proceeds of his policy, and he can redeem the land or not as he sees fit. Insurance companies can prevent double recovery in the case supposed above by electing “ to rebuild or repair the premises,” as .they have a right to do under the Massachusetts standard policy. If the insurance companies do that the new or repaired building becomes subject to the rights to which the building was subject before the fire. For other cases illustrating the principle we have been discussing see Haley v. Manufacturers' Fire & Marine Ins. Co. 120 Mass. 292; Washington Mills Emery Co. v. Weymouth & Braintree Ins. Co. 135 Mass. 503. The next defense set up is that the statements in writing were not rendered “ forthwith.” The statement in writing in case of the Liverpool and London and Globe Insurance Company was rendered on December 20,1906, and that in case of the Orient Insurance Company on January 23, 1907. The auditor found that they were “ filed within such time as was demanded under the terms of the contracts of insurance.” We do not know what facts were before the auditor on which this finding was made. The auditor’s report w&a prima fade evidence on this point and the judge was warranted in finding that it was not overcome by the fact that these statements in writing were rendered when they were rendered. The plaintiff stated in his statement in writing rendered to the Liverpool and London and Globe Insurance Company that “The property insured belonged to Charles C. Jenks and no other person or persons had any interest therein except. . . .” [This blank was not further filled out.] The statement that the property belonged to Charles C. Jenks was true. He was the owner subject to certain liens. All that the insured was required to set forth in the statement in writing was “ the interest of the insured ” in the property burned. We do not think that the statement should be construed to mean that there was no incumbrance on the property. A similar point was decided in Strong v. Manufacturers’ Ins. Co. 10 Pick. 40, and in Fowle v. Springfield Fire & Marine Ins. Co. 122 Mass. 191. See also in this connection Hinckley v. Germania Ins. Co. 140 Mass. 38. The defendants have cited 1 Clement, Fire Insurance, 210, as an [599] authority to the contrary. The statement in that text book is founded upon Davis v. Grand Rapids Fire Ins. Co. 36 N. Y. Supp. 792, affirmed on the opinion below in 157 N. Y. 685. In that case the plaintiff, in answer to a demand on the part of the company that the insured should state all incumbrances on the property insured, answered that “ the property belonged to the assured, and no other person or persons had any interest therein.” It might well be held under those circumstances that the statement was a statement that there were no incumbrances. See in this connection Draper v. Charter Oak Fire Ins. Co. 2 Allen, 569. The entry must be r , , ,, - ,. J Judgment on the finding.