Harris v. Gaspee Fire and Marine Insurance Co. and Others

9 R.I. 207

• Court: Supreme Court of Rhode Island
• Decided: March 6, 1869
• Status: Published

Opinion

Durfee, J.

On the 30th of July, 1859, the plaintiff, being interested in the manufacturing estate of the To uro Manufacturing Company, so called, in Newport, R. I., as the transferee of two mortgages thereon, given by L. J. Doyle to Lord, Warren, Evans & Co., and dated, the one August 21st, and the other, August 22d, 1856, procured from the defendant companies an insurance of his interest to the amount of $15,000, being $3,000 in each company. Each of the policies states that the said mortgages are “ subject to a prior mortgage on said estate for twenty thousand dollars, or about that sum, and in case of loss the amount of this policy is to be paid to said Caleb E. Harris whenever and as soon as his lien upon said property, by virtue of said mortgage, is established by decree of court or otherwise.1’ This provision in regard to payment appears to have been inserted because, at the time the insurance was effected, the extent of the plaintiff’s interest under the mortgages transferred to him, was in question ; for the reason that after those mortgages were made, and before they were recorded, certain conveyances and mortgages had been made to other parties, thus complicating the title. The fire occurred, during the continuance of the policy, December 31, 1859, and afterwards, in 1864, the extent of the plaintiff’s lien under the mortgages transferred to him, was established by a decree of the Circuit Court. The priorities of the parties interested in the property, as ascertained or admitted, in so far as we need state them, appear to have been as follows, to wit.:—

1. The Ooddington Manufacturing Co. held a mortgage for $20,000, being the prior mortgage mentioned in the policies, which covered the whole estate, subject to this mortgage.

2. "W. W. Bishop was the owner in fee of one undivided third.

8. W. W. Bishop held a mortgage for one other undivided third.

4. The plaintiff held a lien by his mortgages upon all the residue.

The property on which the mortgages were made was worth not less than $65,000 at the time of the fire. Since then, the Ooddington Manufacturing Company have sold the land and ruins under their mortgage and discharged their mortgage with the proceeds, and have paid over one third of what was left of the proceeds, to wit., $1,059.77, to the plaintiff, March 9th, 1866. The debt covered by the mortgages transferred to the plaintiffs was, at the date of the policies, $15,551.08.

These actions were brought in the Supreme Court, at the October term thereof, 1865.

1. The defendants contend that the plaintiff is not entitled to recover, because the policies, by their terms, are not payable until the plaintiff’s lien is established “upon said property,” which, they contend, means the whole property, whereas the lien decreed is only a lien upon two-thirds, subject to such priorities as practically reduces it to a lien on one-third. We do not ''think this is the fair construction of the policies. A lien upon two undivided thirds, or one undivided third, of a given estate or property, is, in our opinion, a lien upon said property. The lien, being upon an undivided interest, charges the whole propperty to the extent of that interest, which subsists as an undivided pai’t of every particle of the property. And this construction accords with the obvious design of the policies; for if, as we presume, they were designed as security against loss by fire, the plaintiff would desire to have them- hold, whether his mortgages were a charge upon one undivided third or upon three undivided thirds ; for the risk, except perhaps in the value of the interest exposed, would be the same in either case.

2. The plaintiff can recover only the amount of his loss by the fire, and of course nothing was lost by the fire which remained to be sold after- the fire. Out of what was sold the plaintiff received $1,059.77, and this, therefore, if it was his proper proportion of what remained, should be deducted from the value of his interest in the property to ascertain his loss. If, at the time the fire occurred, the value of his interest was $15,000, then $15,000 — 1,059.77=13,940.23 was his loss by the fire, and consequently the amount which the defendant companies ought to pay him under their policies. The question chiefly argued by the counsel in regard to this payment does not, in our view, arise.

3. We think the plaintiff is entitled to interest on the amount to be paid by the companies, only from the time the lien was established by the decree of the Circuit Court, to wit., from November 22, 1864, the companies having agreed to pay the amount of the policies, in case of loss, whenever and as soon as the lien should be established.

Judgment accordingly.