Dutton v. N. E. Mutual Fire Ins.

29 N.H. 153

• Court: Superior Court of New Hampshire
• Decided: December 15, 1854
• Status: Published

Opinion

Eastman, J.

The defendants. issued the policy in suit to Henry Dutton, on the 11th day of October, 1847, upon an application made and signed by him on the 5th of October, six days previous to the date of the policy. On the 26th day of August, 1848, the policy was duly assigned to the plaintiff, and the assignment approved by the company ; and on the third day of June, 1849, the property insured was consumed by fire.

No controversy exists in regard to the plaintiff’s right to bring the suit as the assignee of Henry Dutton, the insured, nor in regard to the destruction of the property; but the defence rests mainly upon two grounds: first, that there was a misrepresentation in the application for insurance— the application representing the property to be incumbered only to the amount of §300, whereas the defendants allege that it was in truth subject to a lien for labor and materials fur-wished under the statute of Maine, and also that at the time of the issuing of the policy there was a further mortgage upon the property, which was executed on the 11th day of October, 1847, the day of the date of the policy' — and, second, that the case shows fraud, and that the policy is void on that ground.

With regard to the incumbrances upon the property, one question only was put in the application, which was this: “ Is the property incumbered ?” and the answer was “ $300.” Was this answer a compliance with the charter and by-laws which formed a part of the contract of insurance between the parties, and was a true representation given as required.by general principles, and by their contract? The defendants contend that the answer was in fact a misrepresentation, and did not disclose all the incumbrances ; and if this be so, the action cannot be sustained.

It is said that there was a mechanic’s lien upon the property. Was this so ? The statute of Maine upon this subject is as follows:

“ Section 37. Any person who shall performdabor or furnish materials for erecting, altering or repairing any house or other building or appurtenances, or furnish labor or materials for the above purposes, by virtue of any contract with the owner thereof, or other person who had contracted with such owner, shall have a lien to secure the payment of the same, upon such house or building, and the lot of land on which the same stands, and upon the right of redeeming the same when under mortgage; and such lien shall continue in force for the space of ninety days from the time when such payment becomes due.

“ Section 38. Such person may secure the benefit of such lien by an attachment of such house or building, land or right of redemption, within thfe said ninety days; and such attachment shall have precedence of all other attachments, ■not made under any such lien.” Rev. Stat. of Maine, ch. 125, §§ 37, 38.

Whether the claim of Hinckley & Egery was of the character to be protected by this statute before it was settled by Dutton, in September, 1847, we do not propose to consider. The particulars of it are not given, nor the time when due, and we cannot see how much of it, if any, would fall within the purview of the statute. A portion of it appears to have been for machinery, and that is not in terms specified in the act; although, perhaps, it might be regarded as coming within its spirit.

Nor is it necessary to determine whether the lien created by this statute is an incumbrance contemplated by the application and the by-laws and charter of the company. No judicial construction has ever been put upon our statute in regard to the subject, that we are aware of. Our act is not so broad in its provisions as that of Maine, and it is not generally in force throughout the State, being confined in its application to those cities and towns which may adopt it. But, as observed, it is unnecessary to put any construction upon the act relied on by the defendants; for we think that the lien, whatever may have been its character, was terminated by the giving and receiving of the note of Dutton for the demand.

The account was against Eastman & Dutton, and whatever was furnished was delivered to them. But on the 26th of September, 1847, prior to the application for the insurance and the issuing of the policy, Hinckley & Egery took the note of Dutton alone, for the balance of the account. This note, as we understand the case, was taken in satisfaction of the account against Eastman & Dutton, and the claim against them was thereby relinquished. Whatever lien, therefore, there may have been created by virtue of the contract to furnish the labor and materials, was lost by the new contract; and Hinckley & Egery probably so understood it, for the mortgage to them of the whole property was about that time made out to secure the note. No attempt was ever made to enforce the lien, and the mortgage was ex-eeuted on the 11th of October, fifteen days after the note was given.

But it is said that this mortgage of October 11, 1847, was an incumbrance, and makes void the policy. It is true it was an incumbrance from the time of its execution ; but whether it was executed before or after the issuing of the policy, (both bearing the same date,) does not appear; nor is it necessary to know, as it was not an incumbrance when the application was made ; and it was not the duty of the insured to notify the company of its execution. The charter and by-laws do not require any notice of subsequent incumbrances.

If the assured stated his title to the property truly when he made his application, that was all that was required under this'charter. And this he did; the only incumbrance on the property at that time was the $300 mortgage. The mechanic’s lien had become extinct on the 26th of September, and the mortgage to Hinckley & Egery, although in contemplation, was not executed, and did not become an incumbrance' on the property till October 11th. It was no fault of the applicant that the policy was not issued immediately after the application was made.

In our opinion, then, the policy cannot be avoided on the ground of misrepresentation or concealment of any incumbrances existing upon the property.

Neither do we think that the defendants stand any better upon their second position ; that of fraud. There may be facts disclosed in the case which would be competent evidence to be submitted to a jury on such a question ; but the court cannot infer fraud from what is set forth. All that is stated may have been done by Dutton, in honesty and good faith. Dilatoriness, although oftentimes as injurious to a creditor as fraud itself, is, nevertheless, not in itself fraud, nor can we, as a court, so find it.

According to the provisions of the case there must be,

Judgment for the plaintiff.