Tallman v. Atlantic Fire & Marine Insurance

By the court, Potter, J.

It was an express provision of the contract of insurance in this case, and so expressed in the policy, that “ in case of. any sale, transfer or change of title in the property insured, such insurance shall he void and cease.” The title of the insured property, as well as the possession of it, was changed from “ Sturtevant, Son & Co.” to the plaintiff, on the 18th day of April, 1863, prior to the loss by fire, which was on the 9 th day of May following. There is no evidence in the case of the defendant’s waiver of or consent to this change of' title. The insured could not assign without the consent of the defendant. There is no evidence in the case that Sturtevant, Sons & Co. at the time of the fire had any interest in the insured property. As was said by the court of appeals in Grosvenor agt. The Atlantic lire Insurance Company of Brooklyn (17 N. Y. R. 392), “ The contract of insurance is a contract of indemnity. To sustain such an action upon such a contract, it must appear that the party insured has sustained a loss. This involves the necessity of an insurable interest at the time of the alleged loss.” This contract was made by the defendants Avith Sturtevant, Sons & Co., without any express contract Avritten on the face of the policy, and by the well settled law of insurance, the assurer must have an interest .at risk, not only at the time of issuing the policy, but at the time of loss. If he have nó such interest, there is nothing to be indemnified for (1 Phillips on Insurance, • 115, §§ 172,175). It must be such an interest that the peril may have a direct effect - upon it, instead of a remote, circuitous or consequential effect. It is not sufficient even that the party have an insurable interest in the property; he must have such an interest as the contract specifies (Bidwell agt. North Western Ins. Co. 18 N. F. R. 179). I give no importance to the evidence that one of the firm of Sturtevant, Sons & Co., had previously transferred his interest to another member of the same firm. No stranger,. not of the persons insured was brought in ; this does not come AAllthin the reason of the principle, as if the .transfer was to a stranger.. (16 Barb. 511; 23 Id. 623.) Nor does the fact that Judge Brown had an insurable interest in the property, and that the loss (if any) was payable to him, change this principle. “ Sturtevant, Sons & Co.” at the time of the contract had an insurable interest in. the property; it was that interest, no other, not Brown’s that was insured. Brown might have insured his own interest, but he did not; he was content to take an assignment of the indemnity given to “ Sturtevant, Sons & Co.” upon their insurable interest. That was his contract. He consented to take the hazards incident to the contract made by the policy, and dependent upon the conditions therein expressed, to be observed by the insured, and to the law affecting that contract.

The plaintiff in this action succeeded to Brown’s rights, but succeeded also, subject to all the contingencies to which Brown’s contract ivas liable. The loss, if any, was payable to Brown only, upon conditions that the insured sustained loss, having fully kept their contract. This question was directly raised on the trial by the 7th and 8th propositions of the defendants’ counsel, on motion for non-suit, at the end of the testimony. The seventh proposition was as follows : “ That the sale of .the property under the power contained in the mortgage to John E. Tallman, and possession thereof by him without such notice, avoided the policy.” The eighth proposition to non-suit was as follows: “ That the policy is void, because the assured had no interest in the property insured at the time of the loss.” This eighth proposition is but the sequence of the seventh, or they may be regarded together as one. These propositions are repeated in substance by the defendants’ counsel in his requests to the court to charge the jury as follows : The defendants’ counsel asked the court to charge the jury:

6th. That the execution of the chattel mortgage “ by ‘Sturtevant, Sons & Co.,’ to John E. Tallman, without notice to the defendants, or their assent obtained, avoided the policy, and their verdict should be for the defendant.”

7th. That the sale of the mortgaged property under “the power contained in the mortgage to John E. Tallman, and possession by him without notice to the insurer, avoided the policy, and their verdict should be for the defendant.”

8th. “ From the uncontradicted evidence in the case, the assured, ‘ Sturtevant, Sons & Co.,’ had no interest in the property at the time of the loss by fire, and therefore the policy was void, and their verdict should, be for the defendant.”

The learned judge refused to non-suit upon each of the foregoing propositions for that purpose, and refused to charge the jury as requested in each of the above requests. To the refusal upon each of said propositions to non-suit and refusal to charge, and upon each of the requests to charge as above, the counsel for the defendants excepted. A verdict was rendered for the plaintiff for the amount of the last renewal receipt, with interest, amounting to $1,056.78. There were various exceptions to rulings in the case less important than those we have reviewed, and most of which were not well taken. If we are correct in the views we have taken of the law of insurance upon the question above reviewed, there must be a new trial for the errors we have shown.

With no disposition to favor mere technical objections taken by those corporations who thus grant these indemnities against loss, we are bound to declare the law as we find it. Contracts must be enforced, and undertakings executed according to principles of natural justice, and contracts for insurance are not exceptions to the rule. Insurance companies have a right to claim the same uniformity in the rule of construction of their contracts from the courts which is accorded to contracts with all other parties, and the courts must grant it.

There should, I think, be a new trial, with costs to abide the result.