Adolphus K. Borden et ux. versus The Hingham Mutual Fire Insurance Company, 18 Pick. 523

Putnam J. afterward drew up the opinion of the Court. The defence is made on the ground, that the plaintiffs had not an insurable interest to the amount of $ 1500 insured by the policy. The dwellinghouse was valued at $ 1700 ; the barn and shed, at $ 350 ; and the land on which they stood was worth $ 1000; amounting in all, to $ 3050. There was a mortgage for $1650. The value destroyed by the fire was $ 1850. The plaintiffs represented to the defendants, that the estate was mortgaged, as is above stated. And the plaintiffs purchased the right to redeem, by a deed of quitclaim from the mortgager.

They took the estate subject to the mortgage; and the mortgagees have entered for condition broken. If the plaintiffs do not redeem, they will lose the land ; for they have no recourse against the mortgager. He has made no covenant to pay the mortgage ; but he has merely quitclaimed to the plaintiffs his right and title to the estate.

Now if the amount of the plaintiffs’ interest should be limited by deducting the amount due on the mortgage from the estimated value of the estate, it would be reduced to about $ 1300 ; and the value of their insurable interest, being not more than three fourths of the value of the property, according to that hypothesis, would have been less than one thousand dollars.

Yet with full knowledge of the mortgage, and with full knowledge, or the means of knowledge, of the actual value of the buildings, the defendants undertake to insure to the amount of $ 1500, being less than three fourths of the value of the buildings, as estimated in the policy. This is, indeed, a contract of indemnity ; but we are to construe it according to the true intent and meaning of the parties; and we are not at liberty to make a new contract for them. The representation of the plaintiffs was made when the contract was made.

It became then of vital consequence to settle the value, because the premium, the deposit, and the liability of the plaintiffs to assessments, were then to be fixed for seven years to come. We do not know what strangers would have considered the buildings to be then worth. They might have been worth more or less, than the plaintiffs estimated them to be worth. But we do know that the plaintiffs estimated their interest in them to b.e worth $ 2,050, notwithstanding the mortgage ; and the defendants agreed to it.

If it were not so, the plaintiffs would not get the security by the policy for which they paid, against the risk of fire ; and the defendants would get an amount of premium and deposit, and a right or claim for contribution against the plaintiffs, who became members of the company, greatly beyond what they were entitled to have. If a great calamity by the destruction of property insured against fire had happened, and assessments had been made upon the members, we think the plaintiffs could not have been allowed to claim a deduction from their contribution, premium and deposit, on the ground of an over-valuation.

The answer would have been ready and effectual. The defendants would have said, “ we took your own estimate of the value and the plaintiffs would have been concluded by it. And now, when the defendants come for an allowance, and claim to make the same objection, we think the plaintiffs may well answer, “ you have accepted our estimate, and are bound by it as well as we are.” We think that the parties did not intend, that the value of the buildings insured should thereafterwards be drawn into question. The plaintiffs made, and the defendants accepted the estimate ; and the contract, was made upon that basis.

No fraud, concealment or gaming, is suggested. We are all of opinion, that the plaintiffs are entitled to recover the whole amount insured, it being less than the amount destroyed by the fire. Defendants defaulted.