Thompson v. Phenix Ins. Co.
136 U.S. 287 (1890)

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U.S. Supreme Court

Thompson v. Phenix Ins. Co., 136 U.S. 287 (1890)

Thompson v. Phenix Insurance Company

No. 311

Argued April 29-30, 1890

Decided May 19, 1890

136 U.S. 287

Syllabus

Under some circumstances, a receiver would be derelict in duty if he did not cause to be insured the property committed to his custody, to be kept safely for those entitled to it.

If a receiver, without the previous sanction of the court, applies funds in his hands to pay insurance premiums, the policy is not, for that reason, void as between him and the company, but the question whether he has rightly applied such funds is a matter that concerns only himself, the court whose officer he is, and the parties interested in the property.

Where a receiver uses moneys in his hands without the previous order of the court, the amount so expended may be allowed to him if he has acted in good faith and for the benefit of the parties.

When, by inadvertence, accident, or mistake, a policy of insurance does not correctly set forth the contract personally made between the parties, equity may reform it so as to express the real agreement.

A policy of fire insurance, running to a particular person as receiver in a named suit, provided that it should become void

"if any change takes place in title or possession (except in case of succession by reason of the death of the assured), whether by legal process, or judicial decree, or voluntary transfer or conveyance."

Held:

(1) That this clause does not necessarily import that a change of receivers during the life of the policy would work a change either in title or possession.

(2) That the title is not in the receiver, but in those for whose benefit he holds the property.

(3) That in a legal sense, the property was not in his possession, but in the possession of the court, through him as its officer.

The principle reaffirmed that when a policy is so drawn as to require interpretation, and to be fairly susceptible of two different constructions, that one will be adopted which is most favorable to the insured.

Although the policy in this case provided that no action upon it should be maintained after the expiration of twelve months from the date of the fire, yet the benefit of this clause might be waived by the insurer, and will be regarded as waived if the course of conduct of the insurer was such as to induce the insured to delay bringing suit within the time limited, and if the insured delayed in consequence of hopes of adjustment, held out by the insuring company, the latter will not be permitted to plead the delay in bar of the suit.

Page 136 U. S. 288

In equity. Decree dismissing the bill. The plaintiff appealed. The case is stated in the opinion.

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