Insurance Company v. Chase - 72 U.S. 509 (1866)
U.S. Supreme Court
Insurance Company v. Chase, 72 U.S. 5 Wall. 509 509 (1866)
Insurance Company v. Chase
72 U.S. (5 Wall.) 509
One of five trustees of a church edifice, being the agent of an Insurance Company, accepted a risk in it from another of the trustees to whom the church was indebted, the policy being in the individual name of the insuring trustee, with a proviso that in case of loss the amount should be paid to a creditor of him the insuring trustee, to whom, however, the church was not indebted. The insuring trustee paid the premiums out of his own funds but on account of the parish, and with the assent of the trustees, and the fact of two previous insurances in other companies, where the insurance was made in the name of the proprietors of the church generally, was recited in this policy made in the individual name of the one trustee. A loss having occurred, held that the creditor of the insuring trustee was entitled to recover on the policy, the case showing that the insurance in the form in which it was made was made with the assent of all the trustees and it being a matter immaterial to the company (supposing the risk to be the same) whether the person appointed by the insuring trustee to receive the money retained it to his own use or paid it to the trustees.
This controversy arose on a policy of insurance. The underwriter admitted the loss by fire, but denied the obligation to pay, chiefly because the party insured had not an insurable interest in the property which was destroyed.
The case was this:
William Chase, Sewall Chase, J. F. Day John Yeaton, and J. W. Munger were the trustees of the Congregational Church on Congress Street, in Portland, and held the legal title to it, in trust for the society. Munger, one of the trustees, was also the agent at Portland of two insurance companies created by the laws of Massachusetts -- the Howard and the Springfield. On the 25th of November, 1859, he took fire risks for each company to the
amount of $5,000 on the church property -- the party assured in the Springfield Company being described in the policy as "The proprietors of the Union Church, Portland, Maine," and in the Howard Company as "William Chase, of Portland, Maine, payable in case of loss to Grenville M. Chase." Each policy contained a statement of the several sums for which the property was insured in the different companies.
Prior to these contracts of insurance, the Continental Insurance Company of New York had insured the church for an equal amount in the name of the proprietors, but the policy, although dated in 1857, recites the risks taken by the Springfield and Howard Companies in 1859, the reasonable explanation of this being that when the policy was afterwards renewed, these additional risks were incorporated into it.
William Chase, the assured in the Howard policy, was the treasurer of the parish for several years, and paid the premiums on the policies and the renewals of them. The premiums on the Springfield and Continental policies were charged to the parish; the Howard premiums were not, but were paid out of his private means, on account of the parish, which was done with the assent of the trustees. The society was indebted to William Chase in the sum of $15,000, but not to G. M. Chase. William Chase was, however, indebted to G. M. Chase, and obtained the Howard policy to secure him.
All this appeared by William Chase's own testimony, he having been called by the defendants in the case, and the only witness in it.
The church was badly damaged by fire on the 15th of March, 1862, and the Springfield and Continental Companies, recognizing their liability, paid to the trustees two-thirds of the loss sustained by the fire. The Howard Company, declining to pay, was sued by G. M. Chase, the payee in the policy, for the remaining third.
The declaration set forth that "William Chase was the owner and possessor in trust of the Union Congregational brick and slated Church," &c., and that
Company, in consideration of a premium in money then and there paid to them therefore by said William, made a policy of insurance, and thereby agreed to and with said William to insure upon said property,"
Under instructions of the court, a verdict and judgment were given for the plaintiffs, and the case was now brought here on error.