Stone v. Mutual Fire Insurance

Eowler, J., delivered the opinion of the Court. On the'first of August, 1868, Harvey C. Eawsett was insured against loss by fire by a policy issued by the Mutual Eire Insurance Company of Montgomery County. The policy contained a clause providing that all the property and securities of said company should be forever subject and liable to pay said Eawsett, his heirs and assigns, the loss which might happen by reason of fire to the property insured, “ unless the said company shall, within ninety days after proof of such damage or loss, proceed to repair, rebuild, or replace the same in as good order, condition, and quality, as it was before it was so injured by fire. ” The policy further provided that when ⁵⁸⁸ ever the said company had paid the amount mentioned therein, or had rebuilt or replaced any buildings destroyed by fire as therein provided, said policy should be “utterly null and void, and of none effect, either in law or equity.” About fifteen years after the date of this policy Mr. Eawsett, together with his wife, mortgaged his farm and the insured buildings thereon, to Mrs. E. H. Riggs to secure the payment of a considerable sum of money, in which mortgage there was contained the usual power of sale in case of default; and some years after the execution of said mortgage the appellant recovered his judgment against Eawsett in the Circuit Court for Montgomery County. On the fourteenth of April, 1890, the dwelling house, one of the buildings covered by the policy of insurance, was totally destroyed by fire ; and the Insurance Company, the appellee here, on the fifteenth of May following, by a resolution of its Board of Directors, determined to adjust the claim of Eawsett by rebuilding in accordance with the provisions of the policy before referred to.

Subsequent to the passage of this resolution, the appellant had an attachment issued on his judgment, and directed it to he laid in the hands of the appellee to affect the insurance money claimed by the appellant to be due to Eawsett by reason of the burning of his dwelling house. It appears, therefore, that the policy of insurance on which the appellee company bases its contentions long antedated both the mortgage under which the land was sold, and the judgment on which the appellant issued his attachment. It also appears that the proof of loss was returned on the twenty-ninth of April, 1890, and that within ninety days, the time limited by the policy, the appellee had determined to rebuild, and finally, that in pursuance of this resolution, a valid contract had ⁵⁸⁹ been made by the appellee ’ with a builder to erect-the new building on the site of the old one. The statement of the foregoing facts, it seems to us, is sufficient to show that the appellant, claiming here under his attachment, has no standing, for it is apparent that, under the rebuilding clause contained in the insurance policy, there never was a debt due by the appellee to Eawsett, nor any sum of money in its hands which he could legally claim, or which could be reached by his creditors by means of an attachment or otherwise.

The Insurance Company having duly exercised its election to rebuild, it is clear neither Eawsett nor his creditors can, under the terms of the policy, claim the insurance money. It would certainly be a great hardship and an apparent injustice, to subject the Insurance Company, being guilty of no fraud, to a suit on the part of the insured to recover on the policy, on the theory that the rebuilding clause is void, and at the same time render it liable to an action by the builder to recover damages for breach of the building contract, whifeh it must be admitted