Springfield Fire & Marine Insurance v. Chandler

Mr. Justice Robb delivered the opinion of the Court: That the provision upon which the defendant relies to void this policy is reasonable and competent for the parties to agree upon is settled. Dumas v. Northwestern Nat. Ins. Co. 12 App. D. C. 245, 40 L.R.A. 358; Northern Assur. Co. v. Grand View Bldg. Asso. 183 U. S. 308, 46 L. ed. 213, 22 Sup. Ct. Rep. 133. The sole question therefore is whether, by said instrument of July 5, 1911, plaintiff encumbered the insured property. If he did, the company had a right to insist'that its liability under the policy was thereby terminated. Hunt v. Springfield F. & M. Ins. Co. 20 App. D. C. 48. Admittedly, when this instrument was executed, plaintiff owed Ebersolé $650, which he was then obligated to pay in thirty days. It is familiar law that a precedent debt is a good consideration for a chattel mortgage. Knowles Loom Works v. Vacher, 57 N. J. L. 490, 33 L.R.A. 305, 31 Atl. 306; Collerd v. Tully, 78 N. J. Eq. 557, 80 Atl. 491, Ann. Cas. 1912 C, 78; State v. Surles, 117 N. C. 720, 23 S. E. 324; Gaertner v. Western Elevator Co. 104 Minn. 467, 116 N. W. 945. It is equally plain that an extension of time of payment constitutes a valuable consideration for such a mortgage. Martin Bros. v. Lesan, 129 Iowa, 573, 105 N. W. 996; Fuller v. Brownell, 48 Neb. 145, 67 N. W. 6. In the present case, there was not only a precedent debt, but an extension of time of payment, for, under the new arrangement, the plaintiff was given, more time in which to pay .tire balance due. There 213 was therefore ample consideration for a chattel mortgage.' Plaintiff, lioAvever, insists that, inasmuch as title had already passed, and this instrument is in form a conditional contract of sale, it is a mere nullity, and did not affect the title of the plaintiff. This contention is one that no court of justice would for a moment entertain. AYhatever the form of the instrument, it is perfectly apparent that the plaintiff, Avlien he executed it, understood that it was to be used by Mr. Ebersole in raising money. That it Avas so used the plaintiff admits in bis testimony. (dearly, had he defaulted in the payment of the indebtedness thereby secured, the automobile could have been sold under this instrument and the proceeds applied to the liquidation of the balance due. Tbe intent of plaintiff to vest the legal title to this chattel in Ebersole clearly appearing from the instrument Avhich he executed, the particular form of that instrument is immaterial. The property was encumbered Avithin the meaning of the policy. .Inasmuch as the defendant insisted upon the letter of its contract, it was entitled to a directed verdict. The judgment, will therefore be reversed, with costs, and the cause remanded for further proceedings. See Slocum v. New York L. Ins. Co. 228 U. S. 364, 57 L. ed. 879, 33 Sup. Ct. Rep. 523; Pedersen v. Delaware, L. & W. R. Co. 229 U. S. 146, 57 L. ed. 1125, 33 Sup. Ct. Rep. 648 Reversed and remanded.