Tillou et al. v. Kingston Mutual Insurance Co.

Tillou et al. v. Kingston Mutual Insurance Co. Fire insurance. — Assignment of interest. If copartners effect an insurance against fire, and before a loss, one of them convey his interest to his copartners, this is a violation of the condition as to alienation, and there can be no recovery upon the policy. If a policy of insurance be assigned to a mortgagee, as collateral security, with the assent of the insured, no .subsequent breach of the conditions of the policy, by the assured, will avoid it in the' hands of the assignee, to the extent of his interest. Tillou v. Kingston Mutual Insurance Co., 7 Barb. 570, reversed, as to the first proposition Appeal from the general term of the Supreme Court, in the second district, where judgment had been entered upon a special verdict, in favor of the plaintiffs. (Reported below, 7 Barb. 570.) This was an action of assumpsit, by Carlisle W. Tillou, Oliver W. Doty and Tilley Crouse, upon a policy of insurance, bearing date the 1st November 1842, whereby the defendants insured them against damage or loss by fire, to tire extent of $2500, upon their flouring-mill and the machinery therein, for the term of five years. The premises were destroyed by fire on the 28th July 1847. The defence was, that the policy had become void, by an alienation, before the loss, of the interest of Tilley Crouse, one of the assured, to his copartners, Tillou and Doty. On the trial, before Basculo, J., the jury returned a special verdict, finding the execution of the policy; the destruction of the premises insured; that its value was between $6000 and $7000; and that the notice and preliminary proofs were duly furnished. That on the 1st May 1844, the plaintiffs, with the assent of the defendants, indorsed on the policy, assigned the same to David Ketcham, as collateral security for their mortgage of $2000, held by him. *That on the 1st May 1847, Tilley Crouse sold and conveyed his interest in the insured premises to his copartners Tillou and í)oty. That the amount due, estimating the value insured at $2000, the amount of the mortgage, was $2146.52; estimating it at $2500, the whole amount insured, the amount due was $2687.15. The assignment to Ketcham was not referred to in the pleadings. The supreme court, at ■ general term, gave judgment in favor of the plaintiff, for $2687.15, the whole amount of the policy, and interest; whereupon, the defendants took this appeal. Hill, for the appellants. Beardsley, for the respondents. . Finley v. Lycoming County Mutual Insurance Co., 30 Penn. St. 311; Buckley v. Garrett, 47 Ibid. 204. This proposition was overruled in Grosvenor v. Atlantic Fire Insurance Co., 17 N. Y. 391. [MAJORITY — Foot, J.] Foot, J. The case of Murdock v. Chenango County Mutual Ins. Co. (2 N. Y. 210) is decisive against the claim of the respondents to recover in this action for their own benefit. The only question open for examination and decision, is the .right of Ketcham, the assignee of the policy, to recover, in the names of the respondents, the amount of his interest; and that is scarcely an open question. The principle established by the supreme court, in the case of Robert v. Traders’ Ins. Co. (9 Wend. 404), is, that no act of the assured, after an assignment of the policy, with the assent of the insurer, shall impair the rights of the assignee. This case afterwards came, in a different form, before the court for the correction of errors, and cour^ ^gnised, approved and substantially affirmed the judgment of the supreme court. That case has also been twice noticed by this court, and each time with approbation. (Conover v. Mutual Ins. Company, 1 N. Y. 293; Murdock v. Chenango County Mutual Ins. Co., 2 Id. 218, 219.) The assignment of a policy of insurance, with the assent of the insurer, creates new and mutual relations and rights between the assignee and the insurer, which, on the plainest principles of law and justice, cannot be changed or impaired by the acts of a third person, over whom the injured party has no control. In my opinion, the sale and transfer, by one of the respondents to the, other two, of his right- and interest in the property insured, after the policy was assigned to Ketcham, with the assent of the appellants, does not affect his right to recover. Judgment modified, accordingly, by reducing the amount to $2146.52. Where partnership property is insured, the policy is not avoided, by the appointment, in an action to dissolve the partnership, of one of the cppart-ners, as receiver pendente lite. Keeney v. Home Insurance Co., 71 N. Y. 396.