Buckley v. Garrett et al.

• Decision Date: 01 February 1864
• Citation: 47 Pa. 204
• Parties: Buckley <I>versus</I> Garrett <I>et al.</I>
• Court: Pennsylvania Supreme Court

47 Pa. 204

Buckley versus Garrett et al.

Supreme Court of Pennsylvania.

February 1, 1864.

ERROR to the Common Pleas of Chester county.

COPYRIGHT MATERIAL OMITTED

John H. Brinton and John M. Arundel, for plaintiffs in error, cited and relied on The Traders' Insurance Company v. Roberts, 9 Wend. 404; Titlow v. Kingston Insurance Company, 7 Barb. 370; Allen v. Insurance Company, 19 Id. 442, 1 Seld. 405; Taylor v. The Merchants' Insurance Company, 9 How. 390; Clark v. New England Insurance Company, 6 Cush. 342; Buckbee v. United States Insurance Company, 18 Barb. 541; Etna Fire Insurance Company v. Tyler, 16 Wend. 385; Francis v. The Ocean Insurance Company, 6 Cow. 304.

Wayne Mc Veagh, for defendants in error, relied on Finley v. The Lycoming Insurance Company, 6 Casey 311; Tillon v. The Kingston Mutual Insurance Company, 1 Seld. 405; The Inland Insurance Company v. Stauffer, 9 Casey 403; Trask v. The Insurance Company, 5 Id. 200.

The opinion of the court was delivered, February 1st 1864, by AGNEW, J.

Policy No. 4293, dated September 25th 1846, was issued by the Mutual Fire Insurance Company of Chester County to Buckley & Schofield (the name of the firm) and their assigns, in the sum of $3050, they paying a premium of $220.75 when needed to pay losses, and the annual sum of $13.24. The policy was perpetual, provided the payments were made in conformity to the terms of the policy. The property insured was conveyed to James Buckley and James Schofield, March 30th 1846 (trading under the firm of Buckley & Schofield), but to hold as tenants in common. On the 29th of September 1846, four days after its date, the policy was assigned by Buckley & Schofield to Farnum, Newhall & Co., and afterwards approved by the secretary of the company. Farnum, Newhall & Co. assigned to Esther Painter on the 16th of March 1850, with the approval of the secretary. On the 31st of March 1855, the executor of Esther Painter assigned the policy to Caleb Hoopes. This was also approved by the company.

On the 27th of March 1854, Buckley & Schofield by writing dissolved their partnership, and Schofield transferred his interest in the property insured to Buckley. This paper was recorded on the 9th of January 1856. From 1854 until 1861 Buckley continued to pay the annual interest required by the policy. These payments were made to Henry G. Thomas, the treasurer of the company. He had been treasurer for nine years, and during the same time and before, a manager of the company. He testifies it was his duty to take care of the books, and receive the money and give receipts; receive from the receivers and pay orders; to receive application for changes, and that every manager is a surveyor; that by the by-laws notice of a sale comes in the shape of a transfer of the policy, and then the notice after it is written and signed. That he has no control over the transfer till given and approved. The secretary is the proper person to approve the transfer. The secretary is in the same room with him. Speaking of the transfer from Schofield to Buckley, he says: "I mentioned to Buckley once or twice he ought to have the policy altered, transferred by the firm to his own name several years ago. I knew of the dissolution by common report, not otherwise. I think we talked about it when I spoke of changing the policy. I can recollect no more than when he was paying the premium, I thought his policy in danger from not having it transferred; can't say if this was four, five, or six years ago. Was before the fire — probably three or four years before. Paid the premium up to the time of the fire; I did not object to receiving it; it went into the treasury. I think I told him twice about his policy; should be transferred. Don't know when the sale from Schofield to Buckley was; know nothing but the dissolution — likely knew of the transfer from report; knew from him or others some firm dissolved; perhaps, saw it in the paper. Buckley renewed after the firm dissolved, and I, therefore, knowing how the matter stood, advised a transfer." Other witnesses testify to the death of Schofield in 1858, his burial, and that many persons were at his funeral; that he left the place where he had been doing business the same spring after the dissolution of the firm. The dissolution was published in the newspaper. The assignment of the policy had been to secure money lent on the security of the mortgaged premises. In July 1861, the company paid Caleb Hoopes, the last assignee, one-half of the loss without prejudice to the claim for the remainder. Shortly after this, the debt for which Hoopes held the policy as security was paid, by which the equitable title to the policy revested in Buckley, and this is the subject of the attachment in execution issued on the 2d of August 1861.

Upon this state of facts the court below charged the jury, that the transfer by Schofield to Buckley in 1854 made the policy void; that the payment of the annual instalments to the treasurer and acceptance by him will not render it valid — the acceptance of the money would not render that good which was already void, — and concluded by saying, "We instruct you that this policy is void, and that the plaintiffs are not entitled to recover under the evidence;" thus, not only holding that the policy was wholly void according to the by-laws, and the forfeiture incapable of being waived, but withdrawing from the jury all the evidence tending to show a waiver and an estoppel.

In this we think the learned judge went too far, both in his construction of the by-law and his estimate of the evidence of an estoppel.

Since the case of Finley and The Lycoming County Mutual Insurance Company, 6 Casey 311, it is not to be doubted that a transfer of a tenant in common to his co-tenant, or from one partner to another, is within the prohibition of a policy which declares that alienation by sale or otherwise shall forfeit the policy.

Nor can it be now disputed, since the decision in the case of the State Mutual Insurance Company v. Roberts, 7 Casey 438, that an assignee of a policy assigned to secure a mortgage on the insured premises is in no better plight than the assignor. The doctrine of the cases of The Traders' Insurance Company v. Roberts, 7 Wend. 404, Gillon v. The Keystone Insurance Company, 1 Seld. 405, and others following in their wake, is shown by Justice Strong very clearly to be fallacious in principle and controverted in authority. The assignee of a policy, even though as mortgagee holding an insurable interest himself in the premises, is therefore subject to all the conditions in the policy, and takes the instrument with the risks growing out of the conduct of the assured in violation of his contract. The assent of the underwriters is not therefore operative to produce a new contract or vary the terms of the policy, but only to preserve the policy from forfeiture by the instrumentality of this required assent. This case, therefore, must depend on the construction to be given to the clause in this policy, which it is alleged was violated by the alienation of Schofield. Of course, if it be an absolute prohibition, the judge below was right. But while we hold to the necessary doctrine of protection to these companies, by allowing them to hedge themselves around by guards against fraud, carelessness, want of interest, &c., we must hold them to the salutary rule of construction, that as the language of the conditions is theirs, and they can therefore provide for every proper case, the construction of the by-law or condition is to be most favourable to the assured: Western Insurance Company v. Copper, 8 Casey 351 — Per Strong, J.

The 11th by-law is in these words: "Any person selling or otherwise transferring the property (or any part thereof) insured in this company, his policy shall be void (so far as relates to the part so sold or transferred), unless the said policy be also transferred to the purchaser thereof, and the said transfer accepted by the president or secretary within twenty days after the said sale or transfer shall be fully...