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2 Legal & Ins. Rep. 1 (1860)

handle is hein.journals/lglir2 and id is 1 raw text is: egal and Tasurna '1eprter. JAMES FULTON, Proprietor. 11 gu4Z n ofAz4mt5 One Dollar Per Year. OFFICE, 424 Walnut Street. * Five Cents Per Copy. VOL. II. PHILADELPHIA, JULY 14, 1860. NO. 1. The Legal and Insurance Reporter; JAMES FULTON, Editor and Proprietor. Published Semi-Monthly, at No. 424 WavrU STREET, PHILADELPHIn. T'max Os SusscIPTIoN,-41.00 per year. RATES op ADVERTISEMENTS,-As may be agreed upon. Select advertisements only inserted; and when insert- ed will be continued at the regular rates, until forbid- den. PERSONAL CONTROVERSY Is entirely excluded from this paper. The Reporter will not even reply to its own assailants. Its only answer to attacks will be to labor more faithfully and industriously to make a paper wnich shall be worthy of the patronage of Merchants, Lawyers, and reliable, upright Insurance Companies. NOTIcE.-Any person who sends us the names of five new subscribers will be furnished with this paper gra- Us, for one year, as regularly as issued. INSURANCE. Facts which ought to be disclosed in effecting Insuraece against Fire. It has been stated as a general rule that the insurer against fire is presumed to waive all information that he does not inquire after, but any circumstance evidently and materially enhancing the risk of fire, which is known to the applicant at the time of insuring, and not known or presumed to be known to the insu- rer, and of which he is not bound to inform himself, or to take the risk of it, must be dis- closed, although no inquiry is made respect- ing it. 1 Phillips, 355. But as Mr. Angell remarks, ,If a man is content to insure my house without taking the trouble to inquire of what materials it is constructed, how it is situated in reference to other buildings, or to what use it is applied, he has no ground for complaint that the haz- ard proves to be greater than he anticipated, unless I am chargable with some misrepre- sentation concerning the nature and extent of the risk. Angell on Ins. 200. If the applicant is called upon to speak, he is bound to make a full and true representa- tion of all the facts and circumstances in- quired after that are material to the risk. The materiality of a representation is entirely a question for the jury; but if the jury find the representation to be material, the conse- quence as a matter of law that the policy is void. ' There must be the most perfect fairness, says Mr. Angell, in obtaining a policy of Fire Insurance, in disclosing all circumstances material to the risk, and also that even the reasonable grounds of apprehension on the part of the assured must be stated, and that the insurer must be supposed to take the risk on the supposition that nothing unusual ex- ists. The assured must not conceal what he pri- vately knows, material to the risk. Good faith, says Lord Mansfield, forbids either party, by concealing what he privately knows, to draw the other into a bargain from his ignorance of the fact, and his believing the contrary. But either party may be in- nocently silent as to grounds open to both, to exercise their judgments upon. 3 Burr. 1905. There must be no improper or unjustifiable want of disclosure in effecting an insurance of any kind. In every sort of Insurance, says Mr. Angell, whether marine, fire, or life, it is held to be one of the plainest prin- ciples of equity, that a contract which one party has been induced to enter upon, from his ignorance of the thing concealed, shall not be enforced against him by the other who has concealed it. Angell on Ins. 233. It has been shown that the insured in ef- fecting marine insurance need not mention what the underwriter knows; the same rule applies also to fire insurance; but if there is a material concealment, notwithstanding the assured did not intend to commit fraud, it will avoid the policy; and a concealment which is only the effect of accident, mistake or inadvertence, is equally fatal to the con- tract as if it were designed. A material con- cealment is one, which, if communicated, would induce the underwriter either to de- cline an insurance altogether, or to charge a higher premium. Whether the facts were or were not material to the risk is, says Mr, Arnold, mainly a question for the jury. Arnold on Ins. 370. The underwriter, however, may waive in- formation by consenting to the insurance in the form that is proposed, and there are va- rious matters connected with the risk, about which the assured may remain silent, pro- vided that such silence was not intended to deceive or to defraud the underwriter.- Fletcher v. Commonwealth Insurance Co., 18 Pick. 419. As regards representing the insurer's inter- est in the building, he need not state that it is a qualified, conditional, or temporary one, unless inquiries are made on the subject, or conditions in the policy requiring it; but where inquiry is made as to the title, the answers must be full, and strictly true. Lock v. North America Insurance Company, 13 Mass. 40. Facts which ought to be disclosed in effecting a Life Insurance Policy. The same general principles which are laid down in effecting Fire and Marine Insur- ance are applicable to effecting Insurance on Lives. The applicant for a Life Insurance is bound to make a true and full disclosure of all mate- rial facts within his knowledge, and not known or presumed to be known to the in- surers, which he cannot but know would in- duce them to demand a higher premium, or decline the risk, though no inquiry is made about such facts. 1 Phillips, 64. A mere opinion may be honestly expressed in effecting a Life Insurance, and although incorrect, will not avoid the policy. The applicant for a Life Insurance need not disclose an infirmity which does not diminish his expectation of life, if not inquired about; but if he conceals or misrepresents anything material, as for instance the concealment of the name of the attendant physician, and the diseases for which he had prescribed, the policy would be void. Maynard v. Rhodes, 1 C. & P. 860. If the life to be insured is subject to insan- ity or mental imbecility, or anything that is material to the life must be stated, though there is no inquiry put specifically calling for the fact. Huguernie v. Baily, 6 Launt. 181. In case of a misrepresentation and conceal- ment the policy is void, though the decease of the life is not in the least owing to the cir- cumstances misrepresented or concealed. 1 Phillips, 367. Misrepresentations or concealments of a third person referred to by the assured, will avoid the policy, if known and assented to by the assured. PHILADELPHIA.-The entire population of Philadelphia is not much less than 700,000, and it covers more ground than any other city in the Union. Its whole length is twenty- three miles, and its average width is about five and a half. This gives it an area of not far from eighty-two thousand seven hundred acres. Within the limits of the city, we have one hundred thousand dwelling-houses, five thousand manufactories, ten thousand five hundred stores, three hundred and twenty churches, three hundred school-houses, four- teen cemeteries, eighteen banks, nine railroad depots, sixty fire engine houses. C vests in any per-son who, by assignment or otherwise, becomes entitled to the money se- SUPREME COURT OF PENNSYLVANIA, cured to be paid. It relieves the mortgagee AT LANCASTER, 1860. of the troubles and delays which are liable to ______attend foreclosure by bill in equity. It is to John Bradley be strictly pursued in all essential particulars, vs. and when it is, the sale that is made in pur- The Chester Valley Railroad Company. suance of it is virtually a foreclosure of the In Pennsylvania, a trustee to whom a mortgage hasmagtedsthepoweroexreslytonferohe been executed by a corporation, to secure its bonds, cannot be authorized or compelled to sell the mort- purchaser a perfect title to the whole estate, gaged property in default of the payment of interest and thus to secure to himself the benefit of on the bonds, when the mortgage itself does not pro- an outside price. vide for a sale in such a contingency. A power of sale for breach of any condition, is a le- gitimate part of the instrument, and it is to be executed mortgagees, where the common law and Chan- according to the terms of the appointment. cery jurisdiction have not been restrained and If the mortgage create a trust, and provide that the regulated by statute. But we have grown power of sale is to be executed by the trustee in cer- tain contingencies, he may be controlled, restrained and directed by a Court of Equity, at the suit of a party never had a distinct Chancery tribunal, and standing in thd relation of a cetui que trust, the rule because our old act of 1705 prescribed an easy for his guidance being derived from the instrument and satisfactory course for forclosing the itself. But where there is no trust to be administered as equity of redemption, and bringing the mort- the immediate object of the suit-or the contingency gaged estate to a fair public sale. has not happened which was to bring it into exercise, But the scire facias given by that statute Courts of Equity have no jurisdiction in Pennsylvania does not lie until a year after the last instal- over mortgages;-mortgagees are left to their common law and statutory remedies. ment of the mortgage debt falls due, and hence Certificate to Nisi Prius of Philadelphia. we have felt obliged to give liberal construc- tion to the remedies of the creditor on his The opinon of the Court was delivered by bond for non-paymant of interest and instal- WOODWARD, J. ments of the principal debt. The remedies of a mortgagee against his It is manifest, however, that neither rem- mortgagor, as existing at common law, and edy under the statute, nor under the bond ac- as modified in equity, may be stated briefly, comoanying the mortgage, are adapted to the as follows:- large securities which corporations are in the First, He had a right to take possession of habit of creating for loans, which are to be the mortgaged premises, and to use and enjoy negotiated in the money markets of the coun- them as a prudent owner would do; but co- try. They postpone the payment of the prin- relative to this was the right of the mortgagor cipal debt much beyond the ordinary race of to compel him to account for the profits, and debts. Their draft upon the future is seldom to restore the possession when the rents and less than twenty years, and if a capitalist were profits of the estate had paid debt, interest told that his only remedy on such a mortgage and charges. would be the privilege of issuing a scirefacias Second, The right of foreclosure, whereby twenty-one years after date, he would not be he acquired an absolute title to the incumber- very likely to give the corporation the use of ed property. This was by a bill in chancery his money. praying for the foreclosure of the mortgag- Or, if he should be pointed to our judicial or's equity of redemption, on account of non- decisions, which enable a mortgagee to sue payment of the debt according to the terms his bond for unpaid interest, and to sell the of the contract; but it was subject to many mortgaged premises, with the same effect as a vexatious delays, arising not only from the sale upon scire fades under the statute, he difficulty of making all proper persons parties, such as heirs, devisees, and incumbrancers, similar to his own were issued, or were to be but chiefly from the power that Chancery as- issued-that they were broadcast over the samed, to enlarge the time for redemption on land-that any one of the holders would have a bill to foreclose. the same right as himself to proceed to sell After final decree of foreclosure, the mort- the mortgaged premises-and that before he gagee might sell the estate, and, according to could know of such a proceeding, his entire some authorities, if he did this fairly, and it security might be swept beyond his reach. produced less than the mortgage debt, he This view of his remedies would not be likely might still have remedy against the mortgag- to prove much more satisfactory than the or's other estate for the balance of the debt. other. To make sure of this result, the practice has The borrowing corporations understand prevailed in several States of the Union, and this. They know money cannot he obtained it is not unknown in England, to make the on securities whose legal remedies are so re- bill for foreclosure conclude with a prayer for mote, precarious, and unsatisfactory. They the sale of the premises, and such sales when judge rightly that a mortgage is a mere con- decreed and made, have all the effects of a tract, and when devising a security to win strict foreclosure to extinguish the equity of public confidence, they remember that the redemption. The price is substituted for the more facilities it affords for redress or possible pledged estate, and if it prove insufficient to breaches, the more will it commend itself to pay the creditor in full, he may proceed on public favor. Accordingly, instead of leaving his bond against the mortgagor for the bal- their prospective creditors to the remedies of ance of his debt. This power of Chancery to our common Pennsylvania mortgage, they decree a sale, instead of a foreclosure, is now always stipulate that the trustees shall have regulated by statute in England. See 15 and power to enter for breach of any condition, 16 Vie. C. 86, sec. 48. and exercise the corporate franchise for the Third, A third and very important right of benefit of creditors, or shall have power to the mortgagee is to sell the premises in pur- sell the premises after due notice, or to do- suance of an expres power given in the mort- dare the principal debt overdue, and to pro- gage. This power is common in the English ceed by scirefacias to foreclose the mortgage. mortgages, but has been unknown in Penn- The mortgage before us is fashioned upon sylvania mortgages until within the last few this model. It provides that if the Company years. Corporation mortgages have become shall fail to pay principal or interest of their a common mode of creating marketable se- debt, the trustees may take possession of the curities for raising loans. It being a power road, receive the tolls, rents, issues and profits, annexed to the estate and coupled with an and after defraying the necessary charges and interest, it is necessarily irrevocable. It be- expenses, apply the balance to the principal comes part of the mortgage security, and and interest of all bonds unpaid.

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