HARTFORD FIRE INS. CO. V. WILLlA:\fS.
925
moment it will be provided for. In any event she will be amply secured out of the proceeds of sale. It is ordered, adjudged, and decreed that the judgment held by the petitioner, Dora Madden, is a proper claim against the property and franchises of the Port Royal & Western Carolina Railway Company; that said claim take priority and precedence over the mortgage of the said railway company, executed to the Central Trust Company of New York, bearing date 2d May, 1887, and over the bonds secured thereby; that in any order of sale hereafter to be made of said property and franchises this pri. ority and preference must be provided for and secured; that the amount of said claim is $5,000, with interest from the 9th day of March, 1893, and costs, $97.45.
KING v. MOSHER et al. , (Circuit Court of Appeals, Eighth Circuit. October 15, 1894.) No. 444. In Error to the Circuit Court of the United States for the District of braska. Action by Shepherd H. King against Charles W. Mosher and others, commenced in the district court of Lancaster county, Neb., and removed on petition of defendants Into the circuit court of the United States for the district of Nebraska. There was an order overruling a motion to remand the cause to the state court and sustaining a demurrer to the complaint, and a final judgment for defendants. Plaintiff brings error. Aftlrmed. Allen W. Field and Edward P. Holmes, for plaintiff in error. T. M. Marquette, J. W. Deweese, F. M. Hall, and F. E. Bishop, for defendants in error Homer J. Walsh and others. Charles O. Whedon and Charles E. Magoon, for defendant In error Thompson. Before CALDWELL, SANBORN, and THAYER, Circuit Judges. of Bailey v. Mosher (No. 418, decided at the present term) 63 Fed. 488, and
CALDWELL, Circuit Judge. This case is similar in all respects to the case
on the authority of that case the judgment of the circuit court is afllrmed.
HARTFORD FIRE INS. CO. v. WILLIAMS et al. (Circuit Court of Appeals, Eighth Circuit. October 22, 1894.) No. 454.
1.
FmE INSURANCE-MoRTGAGE CLAUSE-ADDITIONAL INSURANCE-PRORATING.
The. provision, in a mortgage- clause of a fire policy, that the insurer "shall not be liable under this policy for a greater portion of any loss than the sum hereby insured bears to the whole amount of insurance on said property, issued to or held by any party or parties having an insurable interest therein," requires the mortgagee to prorate with all policies on the property, and is not limited to policies covering his Interest, notwithstanding a prior general provision in the mortgage clause that "this insurance, as to the interest of the mortgagee, shall not be invalidated by any act or neglect of the mortgagor or owner."
92'6 ·:jb ,. "; / · . . I
fEDERAL REPORTER,
vol. 63.
-'9;< EU.W;.t>'l!klTlttlCTION BY.
,.' , , ' , .,L!:':I , . , clause <it a (B to t;bEl inte,rest O.! t;be m,op:gagee shall. not be tnvalida.tedby .any o! the, mortltagor'or' ,owner, voluntal7 idestructlotl by' the not {)reventrooovery; ,oylthetIlortgagee. ,: i :'" .' 1,. " ;,',' " " '::",1
CQ:Q.J1: of the United the Dis...' . .', , . . l4Ctl9JJ. A..WpJi8.Jps, trustee, and'the Philadelphia ortg.. 'age. ,&. Trulll .. .. . . ag.fll.·Ilst .. ,.Fl Ins.urance . ·re. C9DJ.PlJ.D.Y. ,JudgD}ent for p1aw.tllrs. brin,gs error. 'JIhonias Bates, Sylvester G."Williams"and IJE!'nry,W. Hobson, for plaintiff in e r r o r . ' - " . " . , ... 'Greely W. Whitford (Frederick A. Williams on the brief), for defendants in error. Before CALDWELL, SANBORN, and . . THAYER, Circuit Judges. ,,' " ' . . '.) M. '"
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THAYER,J., TbiswllB 'lJ, sui,! ,otJr,:an which was issued by the plaintiff in error, the Hartford :Fire Insurance Company, to Grace Henderson On the 21st day of July, 1890. The poliey iusured"a two·liltory, brick dWlemng house, *, * * No. 1045 Washington avenue, Denver, Colorado," to the amount of '3,500.. On the 8th of?September, Grace !Henderson sold the property to BE#ha Shaw; and, with the c()lnsent of the insure1', the was to 'Shaw. On ,March 25,>1892, Bertha Shaw borrowed $4,000 from the Philadelphia :Mottgage & TrustompanY,one (of the defendants in error, and, . to ,secure the of said loan,executedl a, deed ()f trust to the in error, trustee .()l,.the Mortgage & Trust Company, which deed gave the trUl'ltee power to sell the property default in payi,ng the notes . that had been given an evidence of such loan. A mortgage clause '.was thereupon 'attached to :th;e aforesaid policy, which waR duly signed by the agent of the'Havtford Fire Insurance Company, the material partSJ'Of which are as follows:
as
"Loss, if any, on realty, payable to Frederick A. Williams, trustee, mortgagee or trustee, as hereinafter provided; it being he'reby understood and agreed that this insurance, as to the interest o! the mortgagee or trustee, invali41ated by any act or mortgagor only, thereiI)",shall not or owner of the property inBured, nor by the occupation of the premises for purposes more 'hazardous than are pel'mittedby the terms of this policy; prQvided that, in case the mortgagor or owner neglects or refuses to pay any premium due under this policy, then,' <in demand, the mortgagee or trustee shall pay the same; provided, also, that the or trustee shall notify this compall;5: of any of ownersb:ip or increaSe'of,li1izard which Bhall COme to his or their knOWledge, and shall have per!dlBsioll f<lr such change of ()wnership or of hazard duly indorsedoii1tJjispoUey; and proI: tided, further, tMt increase of haziard not by the policy to 'the mortgagor or. owner,' shall be paid for 'by the' .or trustee on l'easonable demand, and demand made bythis'company UpOIl and refusal by the mortgagor or,owner to pay, according to the established schedule of rates. It is, however,' understood that this com))any reserves the right to cancel this policy, asstlpulated' in tha printed conditions in said policy; and also to cancel this agreement on giving ten days' notice of their intention
HARTFORD FIRE INS; CO. '/J. WILLIAMS.
927
to the truswe or mortgagee named therein, and from and after the e..'Cpil'ation of, the said ten days this agreement shall be null alld void. It is further agreed that, 1n case of any other insurance upon the property hereby insured, then this company shall nOf be liable iJnderthis policy for a greater portion of any loss sustained titan the sum hereby insured bears to the whole amount of on said property, issued to or held by any party or !tarties having an IIlsurable Interest therein. It is also agreed that whenever thig company shall pay the mortgagee or trustee any sum for loss under this policy, and shall claim that, as to mortgagor or owner, no liability therefor existed, it ,shall at once, and to the extent of such payment, be legally sub· rogated to all the rights of the party to whom such payments shall be made, under any and all securities held by such party for the payment of said debt, But suCh subrogation shall be in subordination to the claim of said party for the balance of the debt so secured. Or said company may, at its option, pay thesaidmottgagee or trustee the whole debt so secured, with all the interest whichmaY,haveaccl1led thereon to the date of such payment, and shall upon from the party to whom such paymenl ,hall be made an assigni ment and transfer of said debt, with all s'ecurities tleld by said parties for the payment thereof." !
The premises were destroyed by fire on July 31, 1892, and there, upon the defendants in erro'r made claim upon the insurance pallyforthe entire amount of the insurance aforesaid. The chief question that is presented by this record concerns the proper construction of the aforesaid mortgage clause, and particularly that paragraph which provides that, in case of other insuranceon the property, no greater amount shall be recovered under this policy "than the sum insured bears to the whole amount of insurance on said property, issued to or held by any party or parties having an insurable interest therein." On July 23, 1892, Bertha Shaw, the mortgagor, obtained a policy of insurance for her own benefit, in the sum O'f $6,000, in the Palatine Insurance Company, covering the same dwelling house that was insured by the policy in suit, and did so without the knowledge or consent of the plaintiff in error, the Hartford Fire Insurance Company. On the trial of the case, the last-named company offered this policy in evidence, with a view of showing, among other things, that the total insurance on the dwelling house in question was $H,500 at the time of the loss, and that it was only liable for seven-nineteenths O'f the loss, or about $1,400, as the total loss on the dwelling house was about $3,80Q. This proof was excluded, the trial court being of the opinion, as it seems, that the clause above quoted, relative to prorating the loss among all policies covering the insured property, only applied to policies covering the interest of the JllO'rtgagee therein, and that it did not compel the mortgagee to prorate with policies issued to the mortgagor, which did not contain the aforesaid mortgage clause, and were not intended as an insurance upon the mortgagee's interest. In this we think the circuit court erred. The language employed in the mortgage clause that the insurer "shall not be liable under this policy for a greater portion of any loss sustained than the sum hereby insured bears to the whole amount of insurance' on said property, issued to or held by any party or parties having an insurable interest therein," seems to us to have:been inserted ex industria for the purpose O'f making it clear that the mortgagee's policy was entith-d to prorate witb
92.8
I'EDERAL
the, parties ,eould,'have, had in using the wordEf f'issued to or held by any varty 'Or parties having an insurable interest, therein," unless the the c]a;usewhi,ch the cir-, to adopted. ,Xn the abseneeQ'f the words last it might, no donbt, be fairly argned that it was simply the the parties to' resen-e the right "to prorate with by the Illoltgagee for the protection of his that c,oQstruction of the clause seems to us to be inadmf2sible,in view of the language. used, which expressly extends the rightt6 prorate, topoliciefl"issued to any party or parties 4aVip'g insurable the As before remarked,the concluding words of the paragraph seem to have been of abundantcalltion, thatthere might be nogroundu.padded, on whidf to insist that the right to pr()rate was)hnited to policies held'by'ihe' for his Benefit. It is urged, howev:er; by counsel foJ,' the defl;!n6ants inerror, that the foregoing view destro;ystheeiflcacy .of the firstPa.ragraph of Jhemortgage climse. which'declares "that this insurance as to the interest of the mort gageeortrustee * * * shall not be Invalh1ated by any act or neglect .,of the mortgagor or owner. of the pr()perty insured," because it J?l1ts it in the ppwer of the mortgagor by taking out additional ins:urance to lessen the amount which the mortgagee might otl\erwise' have recovered.. It is doubtless true; t)1at the construction above intimated lessens the scope that might otherwise be given J?'t;t!efirst paragraph of the,m()rtgage, clause, but that it destroys'"l'ts ,efficacy as. a protection, to the mortgagee cannot be admitte,d. It is obvious that the in question operates toproteclt the mortgagee' from many acts of the mortgagor which would' otherwise rendyr, the insll,rance, as a. whole, utterly void, e,en it b,e that, under the construction above given,' not only theIH-0rlgagor, but third parties, have it' in tJIeir power to lessen to some extent the amount that may be recovered on the mortgagee's, policy. In construing a contract like the one now in hand, it Is ,our duty to look to all of the provisions of the agreement, aJid to give effect to what seems to hav" been the obvious intent and meaning of the parties. We WOUi.l not be justified in ignoring an agreement in one part of the instrument, which is as clearly expressed as language could well express it, merely because it limits to some extent the scope of general language employed in part of the instrument. It is very common in the construction of contracts and statutes to restrict the mean· ing of. general words and phrases, when it is plain to be seen from particulaJ." provisions of the contract or statute that they were not intended to have the broad signification of which they are fairly susceptible. In the case, at bar, the first stipulation contained in the mortgage clause, "that this insurance as to the interest of the mortgagee or trustee * * * shall not be invalidated by any act or 'neglect of the mortgagor or owner of the property," is limited
m .·. '. be b..the 'bY. any .person can conceive of po h.ad. an insurable . ith.".t ..... el.d, property.. We WhO.' other object that
the. insured .property that at the. time of the loss
in
HARTFORD FIRE INS.· CO. V. WILLIAMS.
and controlled, in our judgment, by the more particular provision with respect to prorating in case of loss which declares in very specific terms, as we think, that the right to prorate shall extend to and include all policies covering the particular property that are held by any party or parties h"aving an insurable interest therein. Counsel have not cited, and we 'have been unable to find, any case in which the particular mortgage clause now under consideration has been judicially construed. The cases of Hastings v. Insurance Co., 73 N. Y. 141, and Insurance Co. v. Olcott, 97 m. 439, to which our attention has been directed, are not in point on this branch of the case. The mortgage clauses which were under consideration in those cases did not contain the stipulation with ref· erence to contribution which the mortgage clause now in controversy contains, nor any stipulation whatever on that subject. It was held, in substance, in those cases, that the mortgage clause operated to create an independent contract between the mortgagee and the insurance company, which could not be invalidated by any act or neglect of the mortgagor, and, therefore, that the mortgagee claiming under such an independent contract with the insurer was not bound to prorate the loss with policies held by the mortgagor, or with policies covering other insurable interests in the property, whether existing prior to the execution of the mortgage clause or taken out subsequently. We might pOElsibly surmise that the stipulation which we find in the mortgage clause now under consideration was framed with special reference to the decisions last mentioned, and for the purpose of securing to the insurer of the mortgagee's interest, beyond peradventure, the right to prorate with all policies covering any and every insurable interest in the insured property. But, be this as it may, we have felt ourselves constrained, in the absence of any adjudications touching the proper interpretation of the mortgage clause in suit, to adopt the foregoing construction, in the belief that it is rendered necessary by the very specific language which the parties have seen fit to employ. It is suggested in the brief of counsel for the plaintiff in error, but the point was not pressed on the oral argument, that the first paragraph of the mortgage clause, which declares, in effect, that the policy as to the mortgagee's interest shall not be invalidated by any act or neglect of the mortgagor, is not adequate to preserve the insurance, even on the mortgagee's interest, if the mortgagor intentionally destroys the insured property. It is claimed that such an act of the mortgagor would invalidate the insurance held by the mortgagee. It is urged in compliance with this view that the circuit court alsO' erred in refusing to admit evidence tending to show that Bertha Shaw intentionally set fire to the insured property. With reference to this contention, it is sufficient to say that, in our opinion, the language of the mortgage clause is broad enough to protect the mortgagee's insurance, and to prevent it from being invalidated even by sucn a willful act committed by the mortgagor. It is conceded by counsel that the mortgagee v.63F.no.7-59
930'
FEDERAL BililPOB'l'ERi ,Yol.
63.
might if the, insured property had ·been destroyed by a fire intentionally kindled' bYI a stra.nger to the contract, and we think that, 'in view of the ola11se which creates practically an iJ1depel',dent contract, between the mortgagee, and the' insurance company, the mortgagee is also, protected against a:willful act of that: character committed by.l'the,' mortgagor for which the ,mort· nowiseoosponsible. ,The last point urged by the plainti,« lin error is not :well taken; but, for the error heretofore pO'inte(l:out"the judgment of thecireuit court is reversed, and the cause is remanded, with award a new trial.
NO:tAN et at ',f::;",,'" v.iCOLORADb; 'CENT. ",: ,", ':11,""" "
CONSOLo MIN. CO. "
(Glrcnlt Court ot Appeals, Eigbth Circuit. ,
October 8, 1894.)
n '-
""
:j"'j
,0. JUDGMElNT VACATING AWARD OF .t\RBITRA'
N
'A'Wftt6t error wlWlle in the federal conrtsto review a judgment settipg'jl$l.d,e an award ot arbitrat()l:fli made and Nturned pursuant to a of court; and a bUl'of exceptions, may be employed to llring that were adduced in the trial court either to Su.pportor overth:rQw exceptions to the award.
Tona"';':BILL OF EXCEPTiONS.
2.
The: 1!.Ppellate court will weigh or examine testimony to sustain or impeJ,l.cb the award, but will confine its to questions of la}V upon the facts shown; and hence. to obtaIn.a review, the Ultimate facts must be found, and reported in the bill ofexceptlons, and merely to report the testimony and affidavits considered;below is inSUfficient. SAME4'BILLOF EXCEPTIONS-INTERPRETATION THEREOF.
OF RE'\TmW-QUESTIONS 6F FACT.
8.
A bill of 'exceptions, containing the testimony offered in support of said e:ll:ceptloni in its concluding paragraph stated that the court sustained the exception to the award on the sole ground that an attempted revoCl;l.tion tbl'l, subrnissionby d,efendants was improper; that a communication ntade'by the plaintiffs to the arbitrators to the effect that defendantsiladcllarged them with misconduct was improperlY made; that the subsequent investigation before the ,court touching the same matter was improper; and that the taking of affidavits from the arbitratorS, concerning their conduct in: office pending the headng was aiso impro'Pet:,-forall of which the award was set aside. Held, that it did not ,appijar,' from the foregoing 'statements that the court intended to declare'lt$'a niatter of law that the doing and saying of certain things whicbjt improper bad vitiatedtb,.e award, without refof those acts and utterancesnpoil the minds of the erence to the arbitrtttol'$;aiJ.d without' reference to their influence upon the fairriess of the aWl1lidI;"ithat the statement in :question was in:the nature ot a com· ·o'u"certain evidence offered' to sustain the exception; that the sa,id, t, t1;le PUIO,f exceptions, must be read,' in connection with theexc:J;itlon to the award which bad been tried arid determined; that the cOurtHevtdently intended toslly that the charge contained in the exception to the' award, "or the substance of it,had been proven; and that the bill of exceptiollljl, Wk,en as a whole, simply, disclosed a general 1inqing on an of ,raised byf,Ce exception to the award, which finding could not be rcNiMvM on a Writ of error; that the only questions
it that ,the arbitrators had been unquly prejudiced and biased agaiust the defendant by untrue statements made to them by the plaintiffs' attorney.
Anexcep1:Ion to an arllitrators' ILwardcharged as ground for vacating