Two questions are presented by this record, upon the solution of which the decision of the case must mainly depend, viz:
1. Were the agents of the insurance company notified that the building insured was vacant and unoccupied at the time the company’s consent was given to the assignment of the policy?
2. Did said agents, at the time said consent was given, by their words or conduct, waive the condition of the policy by which it was to become void in ease the building should become vacant and unoccupied, and so remain?
As to the first of these questions there is but little, if any difficulty. John C. Garland, the appellant’s husband, testifies positively that when he went to the office of Mr. Case, the company’s agent, to obtain a transfer of the insurance to the appellant, he told the clerk with whom he did the business, that the former owner and occupant of the building had moved out, leaving it unoccupied, and that it was on account of the very fact that it was vacant, that he was anxious to have the assignment perfected that day. His recollection of the transaction is apparently clear and circumstantial, and he relates what was said and done by all "the parties concerned, with particularity and very much in detail. On the other hand, the agents of the insurance company who testify, have no recollection of the occasion, or of anything that transpired. That an interview of some kind took place between them and Garland, is rendered morally certain, by the fact that the endorsement on the policy is filled up in the handwriting of Bobinson, the clerk, and bears the signature of Case, the agent. But they seem to have no recollection even of having executed that writing. So long as they have wholly forgotten the occurrence, their testimony that they do not remember the facts to which Garland deposes, is entitled to little if any weight. Hor is it surprising that Garland should remember the occurrence distinctly, or that Case and his clerks should have forgotten it. With Garland it was the only transaction of the kind, and was a matter of considerable importance to his wife, for whom he was acting. To Case and his clerks it was only a matter of daily routine, and was probably only one of many occurrences involving similar facts and circumstances. It is true these witnesses attempt to state the rules and principles upon which they were accustomed to act whenever it came to their knowledge that a building insured had become vacant, and from their usual course of business in that respect, attempt to infer or argue out the conclusion that they could not have received the information to which Garland testifies. It is sufficient to say that such inferences of the witnesses are not competent for any purpose, and cannot be considered as bearing upon the question under discussion.
One circumstance is related by witness, Holden, which merits a passing remark. It is, that after the loss, Garland, being asked by him how the company had knowledge of the vacancy of the building, answered that it was through the company’s agent, Moth. It should be observed that Moth was an employe and sub-agent of Case in a part, if not all, his insurance business, and that at the time of this conversation Garland supposed, incorrectly though, it seems, that he was the company’s agent. For about a year prior to the fire, Moth had been in custody of the insured premises, as the agent of Mrs. Garland, for the purpose of renting it. Had he been an agent of the company, as Garland supposed, Garland may well have entertained the opinion that his knowledge as to the vacancy was the knowledge of his principal, the insurance company, and it is not surprising that when challenged to state how the company had notice, Garland should refer to this more recent and continuous source of knowledge, rather than to the conversation between him and Case’s clerk, at the time of the assignment of the policy; nor are we able to see that his having done so has any material tendency to impeach or contradict his testimony.
The account, then, which Garland gives of what was said and done at the time of the transfer of the policy, stands substantially uncontradicted and unimpeached, and for the' purposes of this appeal, must be taken as the true narration of the occurrence.
Notice to the company of the vacancy of the building being thus established, it remains to be seen whether the condition by which the policy was to become void by reason of such vacancy was waived.
We may be aided in the solution of this question, by considering for a moment the nature and incidents of the contract of insurance, as affected by the alienation of the property by the insured, the assignment of the policy to the grantee, and the assent of the insurance company to the assignment. By the alienation of the property, the contract of insurance between Mrs. McConnell and the insurance company was terminated, and nothing remained to her but the right to a return of the unearned premium. The policy was a mere contract of indemnity, and after the assured had parted with her entire interest in the property, she was liable to no loss or damage from its destruction, and had it burned, the company would have incurred no liability to pay her or any one else for it. May on Ins. § 72. Bor would the assignment of the policy to Mrs. Garland, of itself, vest the latter with any right to indemnity. She could take by assignment only the interest of her assignor, which was merely a right to the unearned premium. But the assent of the insurance company to the assignment, consummated a new contract of insurance with the assignee, the unearned premium in the hands of the company forming the consideration.
The rights of the assignor and assignee, independently of the assent of the insurer, are stated by Mr. Justice Story, in Carpenter v. Providence Washington Ins. Co. 16 Pet. 495, as follows: “It is clear, both upon principle and authority, that an assignment of a policy by the insured, only covers such interest in the premises as he may have at the time of the insurance and at the time of the loss. It is the property of the insured, and his alone, that is designed to be covered; and when he parts with his title to the property, he can sustain no future loss or damage by fire, but the loss, if any, must be that of his grantee. The rights of the assignee cannot be more extensive under the policy than the rights of the assignor; and as to the grantee of the property, he can take nothing by the grant in the policy, since it is not in any just or legal sense attached to the property, or an incident thereto.”
The effect of an assent to the assignment by the insurer, is stated by Chief Justice Shaw, in Fogg v. Middlesex Mut. Fire Ins. Co. 10 Cush. 337, as follows: “ As a policy of insurance is not a negotiable instrument, it cannot be legally transferred so as to enable the assignee to maintain a suit in his own name, without the consent of the other party. But in general, at the common law, where one party assigns all his right and interest in the contract, and the assignee gives notice to the other party to the contract, and he agrees to it, this constitutes a new contract between one of the original parties, and the assignee of the other, the terms of which are regulated and fixed by those of the original contract.” Also, in Wilson v. Hill, 3 Metc. 66, the same learned judge says: “ If the assured has wholly parted with his interest, before they (the buildings insured) are burnt, and they are afterwards burnt, the underwriter incurs no obligation to pay anybody. The contract was-to indemnify the assured; and if he has sustained no damage, the contract is not broken. If, indeed, on a transfer of the estate, the vendor assigns his policy to the purchaser, and this is made known to the insurer, and is assented to by him, it constitutes a new and original promise to the assignee, to indemnify him in like manner, whilst he retains an interest in the estate; and the exemption of the insurer from further liability to the vendor, and the premium paid for insurance for a term not yet expired, are a good consideration for such promise, and constitute a new and valid contract between the insurer and the assignee.” See, also, Foster v. Equitable Mut. Fire Ins. Co. 2 Gray, 216; Pratt v. N. Y. Central Ins. Co. 64 Barb. 589; May on Ins. § 378.
The rights of the parties, then are precisely what they would have been if the insurance company, instead of merely giving its assent to the assignment, had issued to the assignee a new policy for the unexpired term, containing the same stipulations and conditions. The question is thus presented, whether an insurance company after issuing "a policy of insurance on a vacant building, with knowledge of the vacancy, will be permitted to defend against a loss, by setting up a condition by which the policy is to be void, in case the building becomes vacant.
Assuming that the policy is to be interpreted precisely as though it were a new policy, issued at the time consent was given, it is plain that the condition can have no application to a vacancy existing at the time. The language is: “ If the assured shall allow the building herein insured to hecome vacant or unoccupied,” etc. This clearly refers and applies to property occupied at that date, and afterwards becoming vacant. This was the interpretation put upon a similar condition in Aurora Fire and Mar. Ins. Co. v. Kranich, 36 Mich. 289.
But apart from mere questions of construction, the rule seems to be supported by a multitude of authorities, that, where some fact forbidden by a condition of a policy exists, and is known to exist by the insurance company, at the time it issues its policy, the company will be held to be estopped from setting up the condition against a recovery for a loss. Thus, in Geo. Home Ins. Co. v. Kinnier’s Adm’x, 28 Grat. 88, the policy contained a condition that it should be vitiated in case the premises became vacant, etc., and the court held that, “If at the time the agent of the company received the premium of insurance, and delivered the policy, he had knowledge of the vacation of the property, and did not then avoid the policy, but treated it as valid and subsisting, such conduct of the agent was a waiver of the condition, and a breach of it could not be relied on by the defendant to defeat the plaintiff’s recovery.” In Williams v. Niagara Fire Ins. Co. 50 Iowa, 561; the policy contained a similar condition, and the court in the opinion, say: “The company, with full knowledge that the house was unpccupied, and would be for a time, issues the policy and receives the premium, and then, after a loss occurs, insists that it is not bound, and the policy never had a legal existence because said house was vacant. Having issued the policy, taken the premium, and thereby induced the plaintiff to believe she was insured, the defendant is estopped from alleging or proving the policy never had a legal existence. By issuing the policy, the defendant waived the conditions as to the occupation of the building.”
In Aurora Fire Ins. Co. v. Kranich, supra, it was held that a similar condition had no application to the case of buildings hat were vacant at the time the policy was issued; and that if the property was unoccupied at the time the risk was taken with the knowledge of the insurer, but was afterwards occupied for a time, the insurer was liable, though the property, at the time of the loss, had again become vacant and unoccupied. The Supreme Court of Maine, in the case of North Berwick Co. v. N. England. Fire & Mar. Ins. Co. 52 Me. 336, hold that the renewal of a policy, after knowledge of the existence of facts which would authorize the insurers to insist upon a forfeiture, would be deemed a waiver. In Ins. Co. v. Lyons, 38 Texas, 253, there was a condition that the policy should be void in case of other insurance, without the consent of the company written on the policy. The agent of the company was informed, at the time the policy was issued, that the insured had obtained additional insurance, and it was held that it was the duty of the company, upon being notified of the additional insurance, to endorse the same on the policy, or notify the assured of its refusal of the risk, -and that, having failed to do either, it was estopped from setting up, as a defense, that such additional insurance was not endorsed on the policy. See, also, Richardson v. Westchester Ins. Co. 15 Hun. 472; Viele v. Germania Ins. Co. 26 Iowa, 9, 54.
We are of the opinion that the principles recognized and established by the foregoing cases are applicable to the case at bar. The insurance company, being notified that the building was unoccupied, was put to its election, either to refuse its assent to the assignment of the policy, and thus decline to enter into a contract of insurance with the assignee, or to consent to the assignment, and thus consummate a valid and binding contract with her. It chose the latter alternative, and entered into the new contract upon a full consideration and with full knowledge of all the facts, and it ought not now to be permitted to deny the validity of its act, or to allege that when it retained Mrs. Garland’s money and issued to her its contract of insurance, it knowingly entered into a merely worthless and void undertaking.
Nor is it a sufficient answer to say, that the remedy was in Mrs. Garland’s hands, and that she might at any time, by having the building occupied, have vivified or infused vitality into a contract which, at the time it was made, was without life or binding efficacy. If such had been the intention of the parties, doubtless some stipulation to that effect would have been embodied in the agreement. It would have been provided in some way that the liability of the company should only arise upon Mrs. Garland’s placing a tenant in her house. As nothing of that kind was done, it must be presumed that the parties intended to enter into a contract which should become vital and enforceable from the very instant of its consummation.
A good deal of stress is laid by counsel in their arguments, upon the effect to be given to the conversation between Mr. Garland and Mr. Case’s clerk, at the time application was made for consent to the assignment. Counsel for the insurance company insist that the clerk, in that conversation, directly asserted and notified Mr. Garland that if the premises were vacant the company would not be liable in case of loss, and advised him to attend to that matter, that is, get an occupant for the premises; and it is argued that, in view of that conversation, it cannot be inferred that there was a waiver of the condition. Even if the language of Mr. Case’s clerk is to receive the interpretation here suggested, we cannot give it the effect claimed for it. This clearly follows from an application of the principles already laid down. The policy was not rendered void by a breach of the condition in relation to vacancy, but only voidable at the election of the company. Williamsburg City Ins. Co. v. Cary, 83 Ill. 453. And as the company took no steps to avoid the insurance, on being notified of a breach of the condition, but on the contrary, expressly ratified it, or rather, in consideration of the unearned premium, issued a new contract of insurance covering the same risk, a mere notice given at the time the negotiations were in progress, that the company would insist on the forfeiture, cannot avail.
The conversation referred to, however, is at best, ambiguous, and it is difficult to determine precisely how the clerk intended to be understood; but viewing it in the light of surrounding circumstances, we are not inclined to place upon it the interpretation above suggested. Referring to Mr. Garland’s testimony, it will be seen that on learning that the house was vacant, thus probably, in his estimation, increasing the risk of its destruction by fire, he went at once to Mr. Case’s office and applied for. a transfer of the insurance to Mrs. Garland, telling Mr. Case’s clerk that the house was vacant, and that for that reason he wished the transfer made that day. At that time he had not obtained possession of the policy, nor had any formal assignment of it to Mrs. Garland been made. He was told that unless he brought the policy duly assigned, the transfer w'ould not be legal. On his importuning the clerk further, saying that it was late in the afternoon; that the party who had custody of the policy was a considerable distance away; and that on account of the vacancy of the premises, he was anxious to have the transfer of the insurance consummated at once, the clerk remarked “ that they could put it on their books, but it would not be legal without 1 had the policy with Mrs. McConnell’s signature attached, and if the house was vacant, that I had better attend to that part of the business, because it would not amount to anything if the house was destroyed; they would not be liable for the loss.”
It is evident that the subject these men were discussing was the mode by which a legal transfer of the insurance could be effected. The policy had not been obtained, and it would take a considerable time to get it and procure Mrs. McConnell’s assignment. In Mr. Garland’s view there was occasion for immediate action, and he was correspondingly urgent. The suggestion being made that a transfer might be made on the books, the agent decided, and very properly, that such transfer would not be legal. Hotliing remained but for Mr. Garland to go and get the policy, and get it assigned and bring it to the office; and the clerk, as it seems to ns, merely by way of suggesting that he go at once and do this, added that “if the house was vacant,” that is, if there was that extra hazard in consequence of which he was so anxious to have the transfer immediately consummated, “he had better attend to that part of the business,” that is, the obtaining of the policy, “ because it,” a mere transfer on the books, “ would not amount to anything if the house were destroyed,” and that in that event the company would not l$e liable for the loss.
But to understand the clerk, in this conversation, as urging Garland to attend to getting an occupant for the house, and as telling him that his failure in that respect would release the company from liability, would be intruding into the conversation an element entirely foreign to the one the parties were discussing. . And it is singular that such element being introduced should have been carried no further, but left in the vague and ambiguous condition in which the conversation leaves it. This is especially so, in view of the testimony of Mr. Case and both his clerks in relation to their usual practice in cases where buildings insured became vacant. According to their testimony, it seems to have been their uniform practice, if not their express rule, to return the unearned premium and cancel the policy. Mo such course was suggested here, nor was anything said or proposed by the clerk on that subject. It seems clear from this consideration also, that the clerk could not have had in mind, and that he was not discussing the question of a breach of the condition, or of the right of the company to declare a forfeiture for its breach.
We reach the conclusion that the court below, in holding that, as to Mrs. Garland, the policy was void by reason of a breach of the condition in relation to a vacancy, decided contrary to the evidence, and for that reason the decree will be raversed and the cause remanded for further proceedings, not inconsistent with this opinion.
Decree reversed.
Wilson, P. J. I am unable to concur in the conclusion f 7 # > .reached by a majority oí the court.