Hale v. Mechanics' Mutual Fire Insurance

Bigelow, J.

The nature and extent of the interest which the plaintiff acquired in the policy declared on, by virtue of the clause making the amount due, “ in case of loss, payable to S. S. Jackson,” and the subsequent transfer of that interest, with the assent of the defendants, by Jackson to the plaintiff, are fully stated and explained in the recent case of Fogg v. Middlesex Mutual Fire Ins. Co. 10 Cush. 346. According to the principles there laid down, with the soundness of which we are entirely satisfied, the legal effect of this clause is, that the defendants agree that the plaintiff shall recover whatever the persons originally insured by the policy may be entitled to receive in case of loss; but it is only a contingent order or assignment of what may become due under the contract, and not an absolute transfer by virtue of which the plaintiff acquired the full rights of an assignee of a chose in action. The original contract with Stone and Perry still subsisted. It was their interest in the premises which was insured. The plaintiff stands and must claim in their right as the party insured, and not in his own. It is only what they have a right to receive under the contract that is payable to him. If therefore, by reason of any act of theirs before the loss happened, the policy was rendered void, their right to recover is destroyed, and there being no loss under the policy for which the defendants are liable, the plaintiff cannot recover. The contingency, on which his claim against the defendants was to arise, has not occurred.

*173Such being the rights of the parties under the contract, it is clear, upon the facts in this case, that the policy was annulled undex the fifteenth article of the by-laws, by reason of the subsequent insurance procured by Stone and Perry on the property, without the assent of the president of the corporation in writing ; unless the waiver of such written assent by the president, and his verbal consent to such subsequent insurance, as found by the jury, operate to set aside this provision in the by-laws as to this particular policy and render the contract valid, notwithstanding by its express terms, as well as by the clause in the by-laws, it would be otherwise void. But the difficulty in maintaining the plaintiff’s position on this part of the case is, not only that it attempts to substitute for the written agreement of the parties a verbal contract, but that there is an entire absence of any authority on .the part of the president to make such waiver or give such verbal assent. He was an agent, with powers strictly limited and defined, and could not act so as to bind the defendants beyond the scope of his authority. Story on Agency, §§ 127, 133. Salem Bank v. Gloucester Bank, 17 Mass. 29. By article fifteenth of the by-laws, his power to assent to subsequent insurance was expressly confined to giving such assent in writing. In order to guard against the danger of over insurance, the corporation might well require that any assent on their part to further insurance on property insured by them should be given by the deliberate and well considered act of their president in writing, and not be left to the vagueness and uncertainty of parol proof. The whole extent and limit of the president’s authority in this respect were set forth in the bylaws attached to the policy in the present case, and, as the evidence shows, were fully known to the assured. Worcester Bank v. Hartford Fire Ins. Co. 11 Cush. 265. Lee v. Howard Fire Ins. Co. 3 Gray, 589, 594.

Nor is this the only restriction on the power of the president. He had no authority to waive any by-law of this corporation. By Rev. Sts. c. 37, § 24, and c. 44, § 1, the corporation alone had' power to establish by-laws “ for their own government, and for the due and orderly conducting of their affairs.” By article *174twenty-sixth it is expressly provided, that the by-laws “ shall in no case be altered ” unless previous notice of such intended alteration be given as therein prescribed, and “ it shall be voted for by two thirds of all the members present at that meeting.” If the argument of the plaintiff should be carried out to its legitimate result, it would give to the president the right, in any case, to suspend or change the by-laws by his verbal act and at his pleasure. This he clearly had no power to do.

We are therefore of opinion that the finding of the jury does not render the policy valid; but that it was annulled by the subsequent insurance obtained by the assured without the written assent of the president. Judgment for the defendants.