Finley et al. v. The Lycoming County Mutual Insurance Company

• Decision Date: 01 January 1858
• Citation: 30 Pa. 311
• Parties: Finley et al. versus The Lycoming County Mutual Insurance Company.
• Court: Pennsylvania Supreme Court

30 Pa. 311

Finley et al. versus The Lycoming County Mutual Insurance Company.

Supreme Court of Pennsylvania.

ERROR to the District Court of Philadelphia.

Parsons, for the plaintiffs in error, cited 1 Phillips on Ins. 57; Carroll v. Boston Ins. Co., 2 Am. Lead. Cas. 454, 458; Lynch v. Dalzell, 3 Bro. P. C. 479; Sadlers' Company v. Badcock, 2 Atk. 557; Murdock v. Chenango Ins. Co., 2 Comst. 210; Tillou v. Kingston Mutual Ins. Co., 1 Seld. 405; Howard v. Albany Ins. Co., 3 Denio 301.

J. S. Brewster and E. E. Petit, for the defendant in error.— The release of one partner to another was not an assignment within the condition of the policy; no stranger was substituted in place of the former firm.

The opinion of the court was delivered by THOMPSON, J.

Finley & Stanley, partners in business, effected an insurance on their stock of lumber, tools, finished and unfinished work, and machinery, in a factory in West Philadelphia, in the Lycoming Mutual Insurance Company, on the 1st of April 1851, to continue for five years, and executed their premium note for $200, in addition to the cash payment required. On the 26th of June following, Finley sold out his interest in the property to his copartner, and dissolved the partnership. On the 22d February 1855, the property was destroyed by fire. There was no assignment of the policy by Finley to Stanley, nor any new premium note given. Assessments made on the note were paid by Stanley after the dissolution; but no notice of his purchase or ownership of the property, was given to the company.

The act incorporating the company, as well as its by-laws, declare that when property insured is alienated by "sale or otherwise," the policy shall from thenceforth become void and be surrendered to the company; and this is expressly made a condition of their policies. This suit was brought in the name of the firm of Finley & Stanley to the use of Job Stanley, to recover the loss; and the defendants relied on the sale of Finley, and the want of assignment of the policy according to the conditions contained in it, as a defence. The court decided both points against the defendants, and the plaintiffs recovered.

It was a fundamental condition of the contract, as well as a statutory provision, of which the assured were bound as members of the company to take notice, that alienation of the property rendered void the policy. But by another condition contained in it, this might be avoided by the purchaser procuring an assignment of the policy; which being done, with the "approval of any agent or director," on signing a premium note for the same amount as the former holder, he might have the policy confirmed to him. This regulation was a reasonable and proper one, for otherwise the company would be obliged to have members and become insurers for parties without any knowledge of them, or consent on their part; but what we have most particularly to do with are these conditions of the policy, and whether a non-compliance with them is fatal to the plaintiffs below — and of this we have no doubt, unless there be something else in the case to avert such a result.

It is said by the defendants in error, that this was not a case to which these conditions attached; that the property insured was partnership property; that it remained in original hands; and that the transfer of Finley was but a release of his interest to Stanley. This...