N. H. Mutual Fire Insurance v. Rand

The policy issued by the plaintiffs sets forth in substance, that whereas the defendants had become members of the company, and had bound and obliged themselves, their heirs, executors, administrators and assigns, to pay all assessments that *434might be made upon them, and had secured to the company the sum of six hundred dollars as the amount of the deposite or premium for insuring two thousand dollars during the term of six years, that the company agreed to insure the defendants for that time, and to pay or satisfy them, their heirs, executors, administrators or assigns the sum insured, within three months after the property insured should be burnt or destroyed by reason or means of fire, and notice thereof, during the time the policy should remain in force, unless the directors should, within the three months, determine to rebuild or replace the property destroyed. The policy also contained this further clause : “ And we further promise, that when and so often as the property aforesaid, or any part thereof, or any other of equal value, built or supplied in the room thereof, shall happen to be injured by means of fire, such damage shall be made good, according to the estimate thereof, or repaired and put in as good condition as the same was before such fire happened.”

The note in suit was for six hundred dollars. It bears the same date as that of the policy, and was payable in such portions and at such times as the directors might, agreeably to their act of incorporation, require. The eighth section of the act, after providing that assessments shall be made upon the members as the losses shall occur, enacts, that if any member shall for the space of thirty days after notice neglect or refuse to pay the sum assessed upon him as his proportion of any loss, in such case the directors may sue for and recover the whole amount of his deposite note, with costs of suit; and the money thus collected shall remain with the treasurer of the company, subject to the payment of such losses and expenses as have or may thereafter accrue; and the balance, if any remain, shall be returned to the party from whom it was collected, on demand, after thirty days from the expiration of the term for which insurance was made.

It will be perceived that the company by their policy make two agreements in regard to losses. The first is, to pay or satisfy the defendants the sum insured, within three months after the property should be burnt or destroyed by fire, and notice thereof, *435unlefes the directors should determine to rebuild. This clause of the policy refers to total losses. They agree to satisfy the defendants the sum insured after the property is destroyed. The second agreement is, that when and so often as the property insured, or any part thereof, or any other of equal value, built or supplied in the room thereof, shall happen to be injured by means of fire, such damages shall be made good according to the estimate thereof, &c. This clause refers to partial losses. It provides for making good the “ damages” — not the payment of the whole sum insured; — when the property is “ injured” — not destroyed.

The provision, “ or any other of equal value, built or supplied in the place thereof,” refers to cases where the owners shall themselves remove their old buildings and erect new ones in their stead. In such instances the new ones would continue insured unless they were so altered as to increase the risk. This is apparent from the thirteenth section of the charter, in which it is stated that no alteration or repairs in buildings, not increasing the ,risk or hazard, shall in any wise affect the insurance previously made thereon. Should the risk be increased, notice would have to be given and the premium note and policy altered accordingly ; otherwise the policy would become void.

This policy was issued December 9th, 1848. The property insured was destroyed by fire September 20th, 1849; and the loss, to the extent of the whole insurance, was subsequently paid. The case, then, is one of total loss. And the company having paid the two thousand dollars, the full amount insured, have fulfilled their part of the contract. The extent of their engagement was to pay that sum and no more; and that they have done. They now call upon the defendants to perform what they allege to be their part of the contract; and one cannot doubt their right in so doing. The contract was mutual. The plaintiffs engaged to insure the defendants for six years, and the defendants agreed to pay such assessments as should, from time to time, be made upon their premium note, agreeably to the act of incorporation. The act of incorporation provides for assessments as *436losses shall occur, and that upon a neglect or refusal to pay the sum'assessed, the whole note may be collected and the avails applied as they might be required to meet the various losses; and if any balance should remain after the expiration of the policy, it should be refunded to the defendants. Now it appears to us that the tenor of the note, the provisions of the charter, and the nature of the contract, all unite in showing the liability of the defendants. An assessment has been duly made upon the note within six years from its date, and the defendants refuse to pay it unless the company will hold themselves bound to insure the gristmill erected in place of the one destroyed, as consideration for the assessment. They insist that the contract is at an end, unless the plaintiffs will assume a further liability. If this be so; if the contract is terminated on the part of the defendants when the property is destroyed and they reimbursed for their loss, then would the contract be most unequal in its effects. To test the position, we will suppose the company to consist of six members, whose policies all bear the same date and are for six years. During the second year three of the number have their property destroyed, and assessments are made to meet the losses. If these three are no longer liable on their notes, the company is in effect reduced to one half its number. During the third year two others lose their buildings and their losses are paid, and upon the same principle they are no longer liable. Only half of the time has now expired, still the company is reduced to one member. He has contributed largely to meet the losses of his associates, but is left to insure himself the remaining three years, and to defray his own loss, unaided by the former members, should his property be destroyed. This cannot be so; the members must all be liable during the term for which they entered the company.

Again, to hold that the defendants are not liable, unless the plaintiffs will bind themselves to make good any loss on the mill erected in the place of the one destroyed, would be equally unjust. If, in order to make the defendants liable upon this note, the plaintiffs must be holden on this policy for a second mill erected, then also might they be on a third or even a tenth, should *437so many happen to he destroyed during the six years ; and thus, instead of paying the two thousand dollars which they originally contracted to pay, they would he compelled to pay twenty thous- and. It appears to us quite clear that the views of the defendants upon this point are erroneous;

The evidence offered to show that the company were formerly in the practice of cancelling policies and surrendering notes on the happening of losses, would not aid the defendants, if proved. If, under a misapprehension of their legal rights, or from any other cause, they adopted for a time a practice that was unjust to the remaining members of the company, that cannot operate to change the terms or the legal effect of a written contract, whether it be the premium note given or the policy issued. We see no occasion to discharge the case in order to go into a trial upon this point.

The case is an agreed one. Were it not, an order would be made for judgment for the whole amount of the note, that the same might be paid into the hands of the treasurer, according to the provisions of the eighth section of the charter. As it is, judgment must be entered for the plaintiffs, according to the agreement, for the sum of forty-two dollars, with interest from December 1st, 1850.

Judgment for the plaintiffs.