Burbank v. Rockingham Mutual Fire Insurance

Eastman, J. The contract of insurance which was entered into by the defendants in this case, was made subject to the provisions and conditions of the charter and by-laws of the corporation. The twelfth section of the charter provides, “ that when any house or other building shall be alienated by sale nr otherwise, the policy shall thereupon be void, and be surrendered to the directors of said company to be cancelled.” The provisions of this section, as well as those of the others, are a part of the policy issued. Roberts v. Chenango Ins. Co., 3 Hill’s Rep. 501; Houghton v. Man. Mu. Fire Ins. Co., 8 Metcalf 114; Jennings v. Chenango Co. Mu. Fire Ins. Co., 2 Denio 75. And the first question which we propose to consider is, had the property insured become alienated, within the meaning of the charter, by the death of Samuel .Burbank, the assured. To alienate is to transfer the property in anything to another; and an alienation is to make a thing another man’s ; — to alter the possession from one to another. Such are the definitious given in the old books. As understood at common law, to alienate real estate is voluntarily to part with the ownership to it, either by bargain and sale, or by some conveyance, or by gift or will. The right to alienate was a right which the owner had over the real estate, to divert it from the heir. Alienation differs from descent in this, that alienation is effected by the voluntary act of the owner of the property, while descent is the legal consequence of the decease of the owner, and is not changed by any previous act or volition of the owner. A sale and conveyance is an alienation that takes effect from the time of the transfer, while a devise is an alienation that takes effect on the decease of the testator, according to the terms of the will. But property not transferred or devised is not alienated, according to the principles of the common law. There is, however, a species of involuntary alienation, so made by the statutes of 13 Edward I., and 27 Edward III., by which the land becomes answerable by attachment and extent for the debts of the owner. The doctrine and principles of alienation will be found discussed in 4 Kent’s Com. 441, and 2 Black. Com. 287. — 559 — Unless then there shall he something in the signification of the term “ alienate,” as used in the twelfth section of the charter, differing from the common law meaning of the word, the property did not become alienated by the death of the assured, and consequently the policy would not be made void thereby. We have, therefore, examined the policy, charter and by-laws, with some attention, to see if we could discover any good reason or principle for extending the construction of the term “ alienate” beyond its common law signification, and we have been unable to find either. The contract of insurance ought not to be terminated by the company, except by the express terms of the policy or the prohibited act of the insured. If the assured conveys the property, there is good reason why the insurance should cease. So in case it shall be devised; for the grantee or devisee can at once procure it to be insured. The company, too, have not contracted with either, and they might not be disposed to insure either. But where the property passes into the hands of an administrator, and is held by him for the creditors or heirs, who may be numerous and scattered, the same reason does not exist. It would in many instances be difficult if not impossible for them personally to effect an insurance, and it could only be done by the administrator for their benefit; and, in such instances, the property would necessarily be uninsured during the time intervening between the death of the assured and the appointment of the administrator. It is also a pertinent inquiry, whether the provision in the policy insuring the assured, and his heirs, executors, administrators and assigns, would not be entirely nugatory if the death of the assured operates, ipso facto, as an alienation of the property. The provision in the charter, requiring the assent of the directors in order to make an assignment or transfer valid, does not render void the other provision by which the assigns are insured. It only points out the course to be taken to make the assignment effective. In this case it is worthy of remark, that the defendants do not appear to have considered the death of Samuel Burbank as operating as an alienation of the property, till after the commence — 560 — ment of this suit. They made assessments and received the amount assessed against the property of James M. Burbank, the administrator, and gave him a receipt therefor. They voted to pay the administrator four hundred dollars, in full for the loss of property; and in their subsequent vote, rescinding the former one to pay, they did not place the rescission upon the ground that the property had become alienated, but upon the ground that they had received information that the assured had not a title in fee simple, unincumbered, to the mill insured, but that he had a less estate in the same. Were it necessary, also, for a decision of the case, an inquiry might likewise be instituted into the assessments made prior to the loss of the property, and subsequent to the death of Samuel Burbank, and collected of the administrator. Where the property has not been destroyed, but passes in some way into the hands of another, the policy is either void, or not, from the day that the property changes hands. If void, ought it not to be alike so for both parties ? The assured should be liable for his proportion of all losses and expenses up to that time; but as the company have paid nothing, so as to create a liability upon him during the whole term of the insurance, there would seem to be no principle that should make him holden to pay for subsequent losses, if the company is not also liable to him, or to the person holding the policy, for the destruction of the property insured. If the property is actually alienated, nothing can be recovered on the policy for anything that occurs subsequent to that time ; and ought the company to have any claim upon the assured for losses after that date ? -If they ought not, then if they make and collect assessments for losses that subsequently occur, with a knowledge that the property has been transferred, should it not be held that they elect to continue in force the policy ? But without pursuing the question of alienation any further, we have no hesitancy in holding that the property did not become alienated by the death of Samuel Burbank, and that the descent of the title to the heirs, if there were any, was not an alienation, according to the principles of the common law, nor within the meaning of the charter. — 561 — The representation of the title and interest in the property, as required by the eighteenth article of the by-laws, was not strictly correct. The article requires that the “ applicant for insurance shall make a true representation of the situation of the property on which he requests insurance, so far as concerns the risk and value thereof, and of his title and interest therein.” The insurance was made February 10th, 1845, and was to Burbank alone. The application stated the property to be Burbank’s, and that it was unincumbered. In the strict technical sense of the phrase, it was his, and it was unincumbered; while, at the same time, the Hobsons and Bangs had a bond of one undivided half of it. Their interest was such as could have been taken by an extent. (Edgerly v. Sanborn, 6 N. H. Rep. 397; Pritchard v. Brown, 4 N. H. Rep. 397.) It was an equitable interest, and such as could have been insured. (Columbia Ins. Co. v. Lawrence, 2 Peters’ Rep. 25; McGivney v. Phoenix Fire Ins. Co., 1 Wendell 85.) And Burbank should have stated the situation of the property, just as it was. Had he done this, the company would probably have made the insurance quite as readily, and no defence of misrepresentation could have then been made. But whatever would be held to be the effect of the representation that was made — whether it would have rendered void the policy or not — the objection, whatever its force, was cured by the agreement entered into September term, 1849. The defendants, by that agreement, admitted that the property insured by the policy was owned by Samuel Burbank at the time of the execution of the policy, as set forth in his application. This agreement, being made in term time, becomes part of the record, and is, as the books term it, a solemn admission of the fact. Doe v. Bird, 7 Car. and Payne 6; Langley v. Ld. Oxford, 1 Mees. & Wels. 508; 1 Greenl. Ev., §§ 27 and 186. It is an admission that there was, in truth, a correct representation in the application, of the title and interest of the assured in the property. Burbank could have effected an insurance upon the whole property, according to the agreement of the Hobsons and Bangs, — 562 — if the company would take the risk ; and as he probably acted in good faith in making the application, supposing that he had a right so to do, it was by no means discreditable in the company to make the admission which they did. Nor can the position that there was here a double insurance be successfully maintained. The fifteenth section of the charter provides, “ that if insurance on any house or building shall be and subsist in said company, and in any other office, or from or by any other person or persons at the same time, the insurance made in and by this company shall become void, unless such double insurance subsist with the assent of the directors, signified by indorsement on the back, of the policy, signed by the president and secretary.” There is no pretence that this property was insured in any other company, nor was there any other person than Burbank insured by this company, unless it were the Hobsons and Bangs. Only one policy was issued, and that was to Burbank. The amount taken upon the whole property was only six hundred dollars, while the consideration agreed to be paid by the Hobsons and Bangs for the one undivided half, was eight hundred and sixty-five dollars and forty-five cents. There was, then, no excess of insurance; no application by the Hobsons and Bangs for an insurance ; no policy issued to them; and nothing that could be construed into a double insurance, unless it were the agreement of the Hobsons and Bangs, made on the Blst of January, 1845, that. Burbank might procure an insurance of three hundred dollars upon wffiat they termed their half of the mill, at their expense, as security in fact to Burbank for the amount for which they were at that time indebted to him. Now, we think there can be no doubt that this was not such a double insurance as the charter contemplates. It was a mere agreement between those who were interested in the property, entered into without any appearance of fraud, and to the injury of no one. The Hobsons and Bangs can have no claim upon the company, for the company made no contract with them. If they have a claim upon any one, it can only be upon the plaintiff, by virtue of the agreement made between them and Samuel Burbank. — 563 — It is hardly necessary to allude to the verbal agreement made between Burbank and the Hobsons and Bangs, in 1844, about the time the bonds were given, since that agreement must have been superseded by the written one that was executed in January, 1845, a short time before the insurance was effected. It is stated in the argument that this suit cannot be maintained by the adniinistrator. But no question of that kind is raised in the case, and none is properly before us. The property destroyed was situated in the State of Maine ; and what the statutes of that State are, as applicable to cases of this kind, does not appear. If before us, they might show that the administrator had the control of the rights occuring under the policy, and that he was the proper person to institute the suit. Had the property destroyed been situated in this State, so that the question would have to be determined by our laws, we might perhaps inquire whether the administrator had not such an interest in the policy, as trustee for the creditors or heirs, or both, and also to recover compensation for his own services, as would enable him to bring the suit. But it is not necessary to determine the question suggested in the argument, as it is not raised by the case. Neither is it necessary, in the view which the court have taken of the plaintiff’s right of recovery, to consider at all the effect of the vote of the directors to pay four hundred dollars in full for the loss. Our opinion is, that the plaintiff’s right of action is complete without any reliance upon that vote; that the defence set up cannot be sustained, and that there must be Judgment on the verdict.