Tarbell v. Vt. Mutual Fire Ins.

The opinion of the court was delivered by ROSS, J. The conveyance from Erskine to Thayer, and the bond from Thayer to Tarbell are parts of one transaction and are to be considered in that light. Thus considered, Tarbell was the real purchaser from Erskine and the conveyance to Thayer, absolute on its face, between Thayer and Tarbell, was oirly for security for the payment of the balance of the purchase money-In equity Tarbell was a mortgagor in possession, and Thayer a mortgagee holding the absolute title as security for the payment of his debt, the same as one holding under a mortgage deed, after the law day has passed. The true relation of these parties to the property, was made known — on the facts stated in the bill and admitted by the demurrer — to Orcutt, the agent of the defendant, when he made and took the application for the insurance. In making and taking the application, Orcutt was the agent of the defendant. Being fully informed, by the applicant, in regard to the true state of the title, and of the relations of Tarbell and Thayer thereto, his representation thereof in the application, bound the defendant, and estopped it from denying the truth of the representations of the title as there made. Ring v. Fire Ins. Co., 51 Vt. 563. If these were all the facts that are contained in the orator’s bill, on proper proof of loss by fire, a recovery at law could be liad in an action on the policy, without the same being reformed. Ring v. Fire Ins. Co., supra. But from the agreed facts, and statements in the bill, admitted by the demurrer, it appears that subsequently to the issuing of the policy, and before the loss by fire, Tarbell’s indebtedness to Thayer was taken up by the notes to Tewksbury. This discharged Tarbell’s indebtedness to Thayer, and Thayer held the title solely for Tarbell’s benefit. Thayer held the title to other land, in [58] equity belonging to Tarbell, as security for the payment of other indebtedness. Tewksbury assumed and paid both of these debts of Tarbell to Thayer. Tarbell gave his notes for both to Tewksbury, and to secure their payment had Thayer convey both parcels to Tewksbury, and Tewksbury mortgaged them back to Thayer, Tarbell taking a bond from Tewksbury for a conveyance to him, on his payment of his notes. The legal effect of these transactions was to pay and discharge Tarbell’s equitable mortgage to Thayer, and to create another from Tewksbury to Thayer, and another and larger one, both in amount and property covered, to Tewksbury. Tarbell told Orcutt the defendant’s agent of these transactions, and he made no objection'. No knowledge of them ever came to the directors of the defendant. It is to be obvserved that no allegation is made, that Tarbell ever inquired of Orcutt what it Avas necessary for him to do to keep the policy of defendant alive upon, the property, nor did he request Orcutt, nor did Orcutt undertake to do anything to that end. It is manifest from this statement that R. L. 3617 does not apply. That section only binds mutual fire insurance companies for the acts and neglects of the several agents appointed by them * * “ while i/% the performance of their duties as the agents of said compa/rdes^ Moreover the policy of the defendant, then held by Tarbell, though running to Thayer, contained a provision making the charter and by-laws of the defendant a part of the contract, with this by-laAV plainly printed thereon: “ Mortgages.” “ Wherever any one shall alienate conditionally by mortgage, his policy shall be void unless he shall make a representation thereof in writing to the directors, stating the amount, and to whom mortgaged, who shall have power to give their consent to said mortgage, or to cancel said policy, as they shall judge proper on examination of the same.” This by-law clearly points out AA'hat must be done to keep a policy alive when a mortgage is placed upon the property insured, and takes from an agent and reserves [59] to the directors alone, the power and right to confirm the policy. There was no compliance, or attempted compliance, by the assured with this by-law, nor any excuse shown for a noncompliance. Hence, by force of the by-law which was a part of the contract, the policy became void, by the neglect of the assured before the fire occured. It is no answer that Tarbell, who was the person beneficially insured in the name of Thayer, and who held the policy, did not -acquaint himself with its provisions. He was bound to do so or suffer for his neglect. Neither can it be answered that this is the same mortgage which existed when the policy issued. In the equitable mortgage then existing, Tarbell was the mortgagor and Thayer the mortgagee. When the loss occurred, Tewksbury held the title to this and another lot of land as security for the payment of Tarbell’s obligations to him, which were greater in amount, and covered another lot of land, than the original equitable mortgage from Tarbell to Thayer. Besides this, Tewksbury had become a new party and had mortgaged both lots of land back to Thayer to secure the payment of his notes to Thayer. The debts thus secured by new conveyances of the same and other land, were also in part new, and other than existed when the policy issued. On these facts for the Court of Equity to give the orators the relief prayed for, would be to disregard, rather than enforce, to make rather than construe, their contracts. The decree is affirmed and ca/use remanded.