Hazard v. Franklin Mutual Fire Insurance

7 R.I. 429

• Court: Supreme Court of Rhode Island
• Decided: March 6, 1863
• Status: Published

Opinion

Ames, C. J.

The main question in this case is ruled by the decision in Hoxsie v. The Providence Mutual Fire Insurance Co. 6 R. I. Rep. 517. This policy ivas effected upon the plaintiff’s interest in the insured premises ; the amount due upon it in case of loss to be paid to the Providence Institution for Savings, to whom he had mortgaged them. When this mortgage was discharged and a new one given to Nichols, nothing more can be fairly implied from the defendants’ recording the assignment of the policy to the new mortgagee, than that they were willing that the insurance should continue for the benefit of the new mortgagee ás it had done for the old one. There was no new contract of insurance. The parties to it, and the subject of it, were the same as before ; and the record was an acknowledgment by the defendants that they had notice of the mortgage to Nichols, and of the assignment of the policy for his security, and assented to both. The engagement with Nichols went to this extent, and no farther: and if it is to be construed as a new insurance of his interest in the premises, it is difficult to see upon what principle the plaintiff cah maintain this action. He was no party to, but merely anractor in,'lhat -contract, and has no interest in the loss. It remained, however, the plaintiff’s insurance' upon his interest,_ for which his note was to fye assessed; and the loss when received by Nichols was, so'Tar as it would go, to extinguish the mortgage debt. By a plain condition of the policy, it became void upon the plaintiff’s conveyance of the insured premises ; and whether Nichols assented to, or was ignorant of, the conveyance at the time it was made, he must abide by the conditions of the contract under which he claims. Although the decision in Hoxsie v. The Providence Mutual Insurance Co. could not, under the facts in that case, go to this extent, the grounds upon which the decision was put clearly did; and we adopt them in application to the case before us.

It is unnecessary to decide jyhether, if the defendants had assessed th« policy of the plaintiff and collected the assessments with full knowledge that he had alienated the premises insured, such conduct would operate as a waiver of the forfeiture of the policy, or estop them from setting up the alienation in defence to a suit for the loss. The pro off fails to bring home to them such knowledge. The registry of the deeds of conveyance operates as constructive notice of them only to those who claim title to the subject of conveyance; and the newspaper notices, the last of which was not of a sale, but of an intent to sell, are no further brought to their knowledge than that they v^ere' contained in newspapers taken at the office. Such proof of knowledge is quite too uncertain for"the purpose here claimed; especially in the face of the testimony of the secretary of the company, whose duty it was, when assessments were ordered by the directors, to distribute them amongst the policies, and collect them of the policy-holders, that he did not know of the alienation, nor to his knowledge did any officer of the company, at the time the assessments in question were made upon the policy of the plaintiff and collected of him; and that as soon as it was made known to them, the policy of the plaintiff was no farther assessed.

We are of opinion, however, that the plaintiff is entitled to recover, under the money counts of his declaration, the amount of these assessments, with interest, as paid and received by mistake. The liability to assessment upon his premium note, for losses occurring during the continuance of his policy, is the consideration of the right of each member of this mutual insurance company to his own indemnity. This- liability and right being correlative, it justly follows, that when without fraud on his part, and, as in this case, from the pressure of' circumstances, a member is forced into an act which forfeits his policy, the company can assess his note for no longer a term than it indemnifies him under his policy. The fifth section of the charter of this company, in application to the case provided for by it, is conceived in this spirit, and the omission of the company to assess this policy after ascertaining that the plaintiff had forfeited it, affords us their view of their rights, and an example of their practice, under it.

Let judgment be entered for the plaintiff, for the amount of the two assessments, with interest on each from ¿he time of payment.