Insurance Company v. Chase
ERROR to the Circuit Court for the District of Maine.
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 $5000 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, were 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 'said Insurance 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,' &c.
Under instructions of the court a verdict and judgment were given for the plaintiffs, and the case was now brought here on error.
Messrs. Fessenden and Butler, for the plaintiff in error:
I. There is a fatal variance between the allegation of interest in the declaration and the proof.
The allegation is, that William Chase was 'the owner and possessor in trust.'
The proof offered was, that William Chase was one of five trustees.
An averment of an entire interest is not supported by proof of a joint interest. 
The legal title to the church was vested in five trustees, and to give validity to their acts, it was necessary that they should act jointly in what concerned the joint property.
II. Regarding the insurance as 'for the parish,' the plaintiff is limited by the proof of the interest of William Chase, as trustee-viz.: one-fifth, as he was only one of five trustees.
1. Because he had no other interest.
2. Because he does not aver that anything more than his individual interest was insured, and the policy contains no formal words-as 'for whom it may concern.' 
III. If the preceding point is sound, then, as there were two other policies on the same property to an equal amount each, for the benefit of the same parties, the plaintiff in this action can recover only one-fifth of one-third, on the same principle.
IV. The proof shows that William Chase, having no other interest than as trustee, in fact insured the property for his individual benefit, and not 'for the parish.'
Having had no other interest than as trustee, and having insured the property in terms for his individual benefit, he could not recover.
Such insurance is void, either with or without notice to insurers.
1. Because insurance is simply a contract of indemnity, and the insured had no personal interest for the loss of which he could be indemnified.
2. Because if without notice to insurers, it is a fraud upon them. One of the first elements, entering into the question of risk, is the interest of the assured to protect the property. If he has no pecuniary interest in the trust property, as in case of a mortgage, it is for his interest that a loss should occur, for he is thereby benefited. Had instructions to this effect been given, the jury would have found a different and proper verdict.
3. Whether with or without notice, such insurance is void, because against public policy, tending to create an interest in the destruction of the property, and adverse to the interest of the cestui que trust.
Mr. John Rand, contra.
Mr. Justice DAVIS delivered the opinion of the court.
^1 Graves v. Boston Mar. Ins. Co., 2 Cranch, 419; Phillips on Insurance, 3d ed., vol. 2, §§ 20, 21, p. 614; Bell v. Ansley, 16 East, 141; Cohen v. Hannam, 5 Taunton, 101; Catlett v. Keith, 1 Paine, 594; Burgher et al. v. Col. Ins. Co., 17 Barbour, 274.
^2 Cases cited under 1st point: Phillips on Insurance, 1, § 380; Dumas v. Jones, 4 Massachusetts, 647; Pearson v. Lord, 6 Id. 81; Finney v. Warren Ins. Co., 1 Metcalf, 16; Same v. Bedford Ins. Co., 8 Id. 348; Turner v. Burrows, 5 Wendell, 541.