HUNT
v.
SPRINGFIELD FIRE AND MARINE INSURANCE COMPANY
AI-generated. These summaries, headnotes, and key points are machine-generated and may contain errors or omissions. Always verify against the full opinion text below. Not legal advice.
The Supreme Court determined whether a fire insurance policy's provision requiring the insured's unconditional ownership of property and prohibiting chattel mortgages was breached by the existence of trust deeds securing debt payments. The Court held that trust deeds to secure money are legally equivalent to chattel mortgages in their essential features and method of enforcement, and therefore violated the policy conditions, establishing that insurance policy conditions protecting insurers against conditional transfers must be construed to encompass all functionally similar instruments regardless of their formal designation.
© FLexlaw, Inc. — AI-generated enrichments are proprietary. All rights reserved.
Mr. Justice Brown,
after making the foregoing statement, delivered the opinion of the court.
The sole question presented by the record in this case is' whether the provision in the policy for the unconditional ownership of the property by the plaintiff, and for the nonexistence of any chattel mortgage thereon, was broken by certain trust deeds to secure the payment of money in each case.
Plaintiff relies upon the familiar principle of law that the conditions of a policy of insurance, prepared as they are by the company, and virtually thrust upon the insured, frequently without his knowledge, must be construed strictly, and while the legal effect of a chattel mortgage and of a deed of trust to secure the payment of money may be practically the same, they are in law different instruments; and that a condition against one is not broken by the existence of the other. We recognize the rule laid down by this court in Thompson v. Phenix Insurance Company, 136 U. S. 287, that in case of attempted forfeiture, if the policy be. fairly susceptible of two constructions, the one will be adopted which is more favorable to the insured. This rule was reiterated in McMaster v. New York Insurance Company, 183 U. S. 25, but we cannot recognize it as applicable to this case.
A deed of trust and chattel mortgage with power of sale are practically one and the same instrument, as understood in this District. In the language of Mr. Justice Morris, in speaking of mortgages of real estate in Middleton v. Parke, 3 D. C. App. 149:
“The deed of trust is the only form of mortgage that has been in general use in the District of Columbia for many years. The common law mortgage is practically unknown with us; and every one understands that, when a mortgage of real estate here is spoken of, the deed of trust is what is intended. . . . The deed of trust is here used as the equivalent of a mortgage; and so the term is universally used by the community. Indeed, while a mortgage is not necessarily perhaps a deed of trust, a deed of trust to secure the loan of money is necessarily a mortgage.”.
It was said by this court in Shillaber v. Robinson, 97 U. S. 68, 78, that “if there is a power of sale, whether in the creditor or in some third person to whom the conveyance is made for that purpose, it is still in effect a mortgage, though in form a deed of trust, and may be foreclosed by sale in pursuance of the terms in which the power is conferred, or by suit in chancery.” The legal effect of the two instruments has been recognized as practically the same in several cases in this and other courts. Platt v. Union Pacific R. R. Co., 99 U. S. 48, 57; Palmer v. Gurnsey, 7 Wend. 248; Eaton v. Whiting, 3 Pick. 484; Wheeler & Wilson Mfg. Co. v. Howard, 28 Fed. Rep. 741; Bartlett v. Teah, 1 McCrary, 176; Southern Pacific R. R. Co. v. Doyle, 11 Fed. Rep. 253; McLane v. Paschal, 47 Texas, 365.
There may be cases under particular statutes recognizing a difference between them in reference to the application of the recording laws, as appears to be the case in Maryland, Charles v. Clagett, 3 Maryland, 82, but in their essential features and in their methods of enforcement they are practically identical. Both are transfers conditioned upon the payment of a sum .of.money; both are enforceable in the same manner, and the difference between them is one of name rather than substance. . The provision in the policy is one for the protection of the insurer, who is entitled, if he insists upon it in his questions, to be apprised of any fact which qualifies or limits the interest of the insured in the property, and would naturally tend to diminish the precautions he might take against its destruction by fire.
In passing upon the identity of the two instruments in this' case we may properly refer • to the further provision of the policy that the interest of the insured must be an uncondi-tionaj and. sole ownership. While the breach of this condition is not specifically urged in the briefs, we may treat it as explanatory of the other condition against the' existence of chattel mortgage. The. company evidently intended by this provision to protect itself against conditional transfers of every kind. The contract of the company is a personal one with the insured and it is not bound to accept any other person to whom the latter may transfer the property.
The conditions of the policy in this case were broken by the trust deeds, and the judgment of the court below is, therefore,
Affirmed.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By
-
Sun Ins. Off. v. Scott, 284 U.S. 177 (U.S. 1931)…policies prohibiting chattel mortgages without consent endorsed on the policy is intended to reduce the moral hazard, and is a valid stipulation, the violation of which constitutes a complete defense. Hunt v. Springfield Fire & Marine Insurance Co., 196 U. S. 47. The loss payable clause above quoted is not informative to the insurer of the existence of a chattel mortgage, but performs the office of protecting a creditor of the insured who has no interest in the insured property by mortgage or otherwise agai…
-
Harvey v. Union Cent. Life Ins. Co., 45 F.2d 78 (4th Cir. 1930)…Bank v. Insurance Co., 95 U. S. 673, 24 L. Ed. 563; Moulor v. American Life Ins. Co., 111 U. S. 335, 4 S. Ct. 466, 28 L. Ed. 447; Liverpool, etc., Ins. Co. v. Kearney, 180 U. S. 132, 21 S. Ct. 326, 45 L. Ed. 460; Hunt v. Springfield, etc., Ins. Co., 196 U. S. 47, 25 S. Ct. 179, 49 L. Ed. 382; Kelsey v. Union Central Life Ins. Co. (C. C. A.) 196 F. 195. Beating these general principles in mind, wo proceed to a discussion of the three main issues in the ease. 1. Anniversary date from which the extended insu…
-
Atl. Life Ins. Co. v. Pharr, 59 F.2d 1024 (6th Cir. 1932)…aning of the language used by the company is open to doubt, that doubt must be resolved against the company and in favor qf the insured. Thompson v. Phenix Ins. Co., 136 U. S. 287, 10 S. Ct. 1019, 34 L. Ed. 408; Hunt v. Springfield F. & M. Ins. Co., 196 U. S. 47, 25 S. Ct. 179, 49 L. Ed. 381; Mutual Life Ins. Co. v. Hurni Packing Co., 263 U. S. 167, 44 S. Ct. 90, 68 L. Ed. 235, 31 A. L. R. 102. So construing the provisions of the policy as a whole, we are constrained to the opinion that the company was unde…
Authorities Cited
- Thompson v. Phenix Ins. Co., 136 U.S. 287 (U.S. 1890)
- Platt v. Union Pac. R.R. Co., 99 U.S. 48 (U.S. 1878)
- McMASTER v. N.Y. Life Ins. Co., 183 U.S. 25 (U.S. 1901)
- Nat'l Bank v. Ins. Co., 95 U.S. 673 (U.S. 1877)
- Shillaber v. Robinson, 97 U.S. 68 (U.S. 1877)