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Post, Administrator, v. Losey tt al.
as a modification and change of the original agreement. In other words, after the consummation of the latter agreement, endorsed upon the back of the note, Losey and the payee were no longer bound by the agreement as written upon the face of the note, but by that agreement as modified and changed by the subsequent agreement endorsed upon the back of the note. After that endorsement, their agreement was to be ascertained by an examination of the face of the note and the endorsement. The two writings are to be construed together. Together they constitute the contract between Losey and the payee. To hold otherwise, would be to hold that the latter agreement was and is of no validity whatever. The latter agreement, by its terms, is to pay the note as written, with a change in time and rate of interest. That there was a sufficient consideration for that agreement there can be no doubt. In consideration of the change of time and rate of interest, Losey exchanged a moral obligation only for a legal liability.
In our conclusion that the contract between Losey and the payee is evidenced by the face of the note and the endorsement ujwn the back of it, we are fully supported by the cast's of Beckner v. Carey, 44 Ind. 89, and Harden v. Wolfe, 2 Iud. 31. It is not easy, if it is possible, to reconcile with those cases the cases of Huff v. Cole, 45 Ind. 300, and Bucklen v. Huff, 53 Ind. 474, from the opinion in each of which cases, it may be remarked, there was a dissent by one of the judges. There are some differences between the endorsement upon the back of the note in the case before us and the endorsement upon the back of the notes in those cases. The cases may, therefore, be distinguishable. But if there were no differences, we should disapprove those cases and follow the cases of Beckner v. Carey, and Harden v. Wolfe, supra. The contract between Losey and the payee, as evidenced by the face of the note and the endorsement upon the back of it, is not the contract between them as it existed at the time Emma J. executed the mortgage, and to secure Post, Administrator, v. Losey el al.
the performance of which on the part of Losey she mortgaged her separate property. Losey and the payee changed that contract without her consent or knowledge by agreeing upon a different rate of interest and a different time for payment.
The contract to secure which she mortgaged her property can be enforced by no one, and for the contract as changed neither she nor her property is liable. To hold her property liable upon the original contract as evidenced by the note, would be to hold it liable for the default in payment by Losey, three years before lie could be in default under the contract as changed; and to hold her property liable upon the changed contract, would be to hold it liable; lor a contract different in time of payment and rate of interest from that which entered into and formed a part of the contract as evidenced by the mortgage. To hold her property liable upon the original contract, would be to measure the liability of the principal by one standard, and the liability of the surety by another and different standard. But it is said, that because Losey had been discharged in bankruptcy from all his debts, he became a stranger to the note, and that, therefore, the change in the contract agreed to by hi in can not affect Emma J. or the mortgage given bv her.
In answer to that it is sufficient to say, in the first place, that by his discharge Losey did not become, in every sense, a stranger to the note. The discharge released him from all legal liability upon it, and in that sense extinguished the debt; but it did not pay the debt, nor release him from the moral duty of paying it. The moral obligation was a sufficient consideration for his subsequent promise to pay it. Hockett v. Jones, 70 Ind. 227; Shockey v. Mills, 71 Ind. 288 (36 Am. R. 196); Meeeh v. Lamon, 103 Ind. 515 (53 Am. R. 540); Wills v. .Ross, 77 Ind. 1 (40 Am. R. 279); Jenht v. Opp, 43 Ind. 108.
In the second place, the bankruptcy of Losey did not destroy change or affect the contract of the surety. Emma J. mortPost, Administrator, v. Losevef al.
gaged her property to secure the performance of the contract between Losey aad the payee as it existed at the time the mortgage was executed. The discharge of Losey from legal liabiliry upon that contract did not, and could not, affect her rights. His discharge from legal liability upon the contract did not destroy or alter it. To hold that it did, would be to hold that it absolutely released the mortgage. The contract between Losey and the payee, so far, at least, as the surety was concerned, remained the same after as before the discharge of Losey.
The only difference was, that by reason of his discharge, he was no longer legally liable upon the contract. He might, however, waive the immunity afforded by his discharge, and pay the debt according to the terms of the note. To secure the jwrformance of the contract according to the terms of the note, and in no other way, the separate property of Emma J. was mortgaged. In order that Losey might again become liable for the payment of the principal sum, the payee consented that the contract might be changed as to the time of payment and the rate of interest. The contract,as evidenced by the face of the note and the endorsement upon the back of it, thus became the contract between Losey and the payee. By the change, the contract as originally executed ceased to exist, both as a legal and moral obligation on the part of Losey. And this is so, whether the new promise be regarded as a revival of the original contract, so far as consistent with it, or whether it be regarded as an entirely new contract.
This Huit is really upon the changed contract, because copies of the face of the note and the endorsement upon the bac k of it are both filed with the complaint as the cause of action.
In any view that may properly be taken of the case, it must be held that the property of Emma J. is no longer liable. As the court below so ruled, the judgment is affirmed, with costs.
Filed May 23,1887.
Havens r The Home Insurance Company.
Havens V. The Home Insurance Company.
Insurance.—Stipulation Against Other Insurance without Written Consent Endorsed on Policy.— Forfeiture. — Waiver.— Estoppel.—Pleading.—In an action to recover on a policy of fire insurance, stipulating that "if the assured shall have or shall hereafter make any other insurance on the property insured, or any part thereof, without the consent of the company hereon written, this policy shall be void," a complaint, alleging that after the policy was executed an agreement was made that other insurance might be taken, and that a written stipulation to that effect would be inserted in the policy, and also showing that other valid insurance was taken, without any notice to the company or request to insert the stipulation agreed upon, does not show a waiver of the condition against further insurance or estop the company to insist that there has been a breach of such condition, and is bad on demurrer.
Same.—Separate Items or Classes of Property Insured.— When Contract and Risk Indivisible.—Policy Void as to Part Void as to All. — Where the property covered by a policy of insurance, although consisting of separate items, appears to be so situate as to constitute substantially one risk—as a building and the furniture in it—then, even though separate amounts of insurance be apportioned to each separate item or class of property, if the consideration for the contract and the risk are both indivisible, the contract must be treated as entire; and any breach of a stipulation which renders the policy void as to part affects in the same manner all the other items.
Same.—Construction of Policy.—Measure of Rights and Obligations.—While courts incline to such a liberal construction of insurance contracts in favor of the insured as, if possible, to avoid a forfeiture, yet, where parties have, without fraud, mistake or surprise, deliberately entered into a contract, that alone must be looked to as furnishing the measure of their respective rights and obligations.
From the Grunt Circuit Court.
J. F. McDowell, H. Brownlee, G. A. Henry, F. M. Finch and A. Finch, for appellant.
B. Harrison, W. II. II. Miller and J. B. E/am, for appellee.
Mitchell, J.—This action was brought by Sarah Havens upon a policy of fire insurance issued to her by the Homo Insurance Company of New York, on the 2d day of December, 1883. The insurance was for the period of one year, again.rt loss or damage by fire, to the amount of Havene r. The Home Insurauce Company.
$2,000, as follows: $1,500 upon the hotel buildings of the assured in Marion, Indiana, and $500 on her furniture and household goods therein. Among other stipulations the policy contained the following: "If the assured shall have or shall hereafter make any other insurance on the property insured, or any part thereof, without the consent of the company hereon written, * * * this policy shall be void." There was also the following stipulation in the policy: "The use of general terms or any tiling less than a distinct, specific agreement, clearly expressed and endorsed on this policy, xhall not be construed as a waiver of any printed or written condition or restriction therein."
The first paragraph of the complaint alleged the execution of the policy, and that the property thereby insured had heen destroyed by fire on the 30th day of November, 1884, and that due proof of loss had been made, etc. This paragraph contains the following averment: "The plaintiff further avers that it was expressly agreed and understood that said plaintiff was to have permission to take out au additional insurance of $1,000 on said building in any other company and at any time she desired, and said company agreed to insert said condition in said policy, which it wholly failed to do. And plaintiff says, that relying upon said promise, and in pursuance of said contract and agreement, she had effected an insurance on said building in the sum of $1,000, in the Phenix Insurance Company of Brooklyn, New York, * * * as permitted by the express agreement aforesaid."
The court below sustained a demurrer to this paragraph of the complaint.
The appellant's claim is, that the averments above set out in effect show that the insurance company agreed or consented that the assured might procure other insurance on the building, and that, having so consented, it is now estopped to assert that there has been a breach of the condition because the consent of the company was not endorsed on the policy. It is said the agreement amounted to a waiver of