Birdsey v. City Fire Insurance

Ellsworth, J.

The main question in this case is, whether the superior court was correct in ruling that the defendants might show that, subsequently to the issuing of the policy, the plaintiff had conveyed away the property insured, and had no interest in it at the time of the fire. This we think might be done, for no principle of insurance law is *170more familiar than that if the insured has no interest at the time of the fire he can sustain no loss by the fire. Following this principle of law the decision was correct, unless the case can be distinguished from others by some peculiar circumstance, and this is attempted, but we think without success.

It is said, that the assignment of the policy on the 3rd October, 1854, to C. H. Collins, (who brings this suit in the name of the plaintiff,) it being done with the consent of the defendants, is a circumstance which takes the case out of the general rule. Now the only effect of the assignment was to substitute Collins in the place of the plaintiff, to demand and receive the money which might become due to Birdsey on the policy, as if the policy had not been assigned; and the sale and conveyance of the property itself has nothing to do with that question, unless indeed a sale of the property necessarily follows an assignment of the policy, which no one will assert. The mere assignee of the policy acquires no interest in the property insured. This specific policy covers the property so long as it remains vested in the insured, let who will hold the policy, but no longer, unless indeed a new contract is made with the insurers for the benefit of the new purchaser. Had the property remained in Birdsey, the assignee of the policy could have demanded and sued for the money, but he having parted with it, his assignee is in no better condition than he is himself. The fact that Birdsey’s credit was poor, or that Collins had acquired such an interest in or control over the policy as that Birdsey could not recall it, or that Collins might have secured himself at the time in some other way, or that Birdsey had conveyed away the property without adequate consideration, are facts of no material importance. Birdsey was not the owner of the property; he had no interest remaining ; and that is enough for this case. His grantee, were he so even by a deed of gift, would be the sole owner of the entire interest, and he alone could insure it. If we are correctly informed, his grantee did get an insurance and has recovered for this very loss upon that policy. At all events this might have been done.

The plaintiff can not be permitted to impeach his own *171deed to Ives. It is good against him certainly, and equally good against his creditors, until by legal proceedings they have acquired a title to the property on execution, as we held in the case of Owen v. Dixon, 17 Conn., 492.

Nor does the fact that the property was under attachment by Collins at the time of the fire make any difference. The attachment did not divest the debtor of his property, nor did Collins thereby acquire any interest in himself beyond a priority to other creditors in case he should recover judgment and levy an execution. But allowing that he did acquire an interest by attaching, that is not any interest which Birdsey got insured by his policy, but a new and distinct interest which originated with the attachment, and which, if insurable at all, should be insured by the creditor as of that peculiar character, for a company might not be willing to insure an inchoate interest by an attachment resting on the result of a law suit, without a new and adequate premium. It is likewise true, as a general rule, that the insured must have his interest in the property at the time of getting his insurance, or else his policy will be a gambling policy; but Collins had no interest by his attachment at that time, nor any other possible interest afterward, unless we allow, which we certainly can not, that Birdsey before he sold to Ives was, and must be held to continue to be, a trustee of his own property for the benefit of Collins. Had the policy run out by the efflux of time, Collins would have been none the better for holding the policy, and a sale of the property before the fire had the same effect.

If Collins intended to hold the property itself when he took an assignment of the policy, he should have taken a mortgage of it. Then he would have had an insurable interest of his own beyond the reach of the mortgagor or his creditors ; but as it is, he had at the time no interest of his own, insurable or insured, nor had Birdsey any at the time of the loss.

We do not advise a new trial.

In this opinion the other judges concurred^

New trial not advised.