Ga. Co-operative Fire Ass'n v. Borchardt & Co

• Decision Date: 14 June 1905
• Parties: GEORGIA CO-OPERATIVE FIRE ASS'N. v. BORCHARDT & CO.
• Court: Georgia Supreme Court

123 Ga. 181

51 S.E. 429

GEORGIA CO-OPERATIVE FIRE ASS'N.

v.BORCHARDT & CO.

Supreme Court of Georgia.

June 14, 1905.

1. Fire Insurance—Assignment of Policy.

The assignment of a fire insurance policy without the consent of the insurer, after a loss has occurred thereunder, does not render the policy void, but the assignee has the right to bring an action thereon.

[Ed. Note.—For cases in point, see vol. 28, Cent. Dig. Insurance, §§ 475, 1483.]

2. Same—Validity.

Such assignment is valid without the consent of the insurer, although the written transfer of the policy purports, by its terms, to be subject to the consent of the insurer.

3. Same—Action on Policies.

Properly construed, the suit in the present case was upon the insurance policies, and not upon a written adjustment of the loss and a promise in writing by the defendant to pay the amount shown by the adjustment.

4. Same—Petition—Construction.

The name, "The Georgia Co-Operative Fire Association, " by which the defendant was sued, taken in connection with the allegations in the petition that "the defendant insurance company or association [had] an agent and a place of doing business in the" county wherein the suit was brought, and on a named date issued "its certain policy of fire insurance whereby and by the terms of which it insured against loss by fire" certain property, imported a corporation, and it was not necessary, even as against a special demurrer, to allege the corporate existence of the defendant.

5. Writ of Error—Assignments of Error-Questions Presented.

An assignment of error, in exceptions pendente lite or in a motion for a new trial, that the court erred in refusing to sustain a motion to rule out the testimony of a named witness, does not properly present any question for determination by this court, when the testimony in question is not, either literally or substantially, set forth in connection with the assignment of error in such exceptions, or in the ground of the motion for new trial complaining of the ruling of the court, and no statement thereof is attached as an exhibit to the exceptions or to the motion.

6. Insurance—Action on Policy—Adjustment—Conclusiveness.

In a suit upon a fire insurance policy, brought by an assignee of such policy against the company which issued it, the defendant cannot be held bound by an adjustment of a loss sustained under the policy, made after the assignment, between the insurer and the assignor of the policy, unless in such adjustment the assignor acted as the authorized agent of the assignee.

(Syllabus by the Court.)

Error from City Court of Brunswick; A-D. Gale, Judge.

Action by Benjamin Borchardt & Co. against the Georgia Co-operative Fire Association. Judgment for plaintiffs, and defendant brings error. Reversed.

Ernest Dart, for plaintiff in error.

C. P. Goodyear and Max Isaac, for defendants in error.

FISH, P. J. Benjamin Borchardt and Co., a firm composed of Benjamin Borchardt and Albert Fendig, brought an action in the city court of Brunswick against "The Georgia Co-operative Fire Association" on two fire insurance policies, alleging that "the defendant insurance company or association" had an agent or place of doing business in the county of Glynn. Both of the policies were alleged to have been issued by the defendant upon a certain stock of groceries and the store fixtures contained in a described build-ing in the city of Brunswick, one of them having been issued on July 6, 1903, to H. H. Brady, and by him subsequently transferred with the consent of the defendant, to L. Bordeaux, and the other having been issued by the defendant on August 17, 1903, to said Bordeaux. The first policy was alleged to have been issued "in consideration of a membership fee of eight cents and a monthly assessment of eighty cents, " and the other "in consideration of a membership fee of forty cents and a monthly assessment of forty cents, " the older policy being in the sum of $400, and the other in the sum of $200. It was alleged that the premiums on each policy had been paid for a full term of one year, and that on October 24, 1903, a fire occurred which totally destroyed the property insured, which then belonged to Bordeaux. It was further alleged that after the fire "an adjuster of said association came to Brunswick and adjusted said fire loss with the said L. Bordeaux, in writing, for the sum of" $333.14, "and agreed to pay it within a reasonable time, " which sum the plaintiffs were entitled to receive by reason of an assignment, dated October 26, 1903, of each of said policies, of which assignment the said association had due notice. It was further alleged that the adjustment created this sum liquidated demand, and that the association had neglected and refused to pay the same to either Bordeaux or the plaintiffs. Copies of the material portions of the two policies were attached to the petition as exhibits, and the several assignments referred to were also attached. The defendant filed both general and special demurrers, and, subject thereto, answered. The court overruled the demurrers, and upon the trial there was a verdict for the plaintiffs. The defendant had duly filed exceptions pendente lite to the overruling of the demurrers, and also to certain other rulings made during the trial, and, after the verdict, made a motion for a new trial, which the court overruled. In the bill of exceptions error is assigned upon the exceptions pendente lite, and also upon the judgment refusing the new trial.

1. The petition was demurred to upon the ground that no cause of action was set forth therein in favor of anybody, and upon the further ground that the facts set forth therein showed that the plaintiffs had no legal right to institute and maintain the suit It needs no argument to demonstrate that a cause of action was set out in the petition. The only ground urged here in support of the contention that the petition did not show a cause of action in favor of anybody is that the transfers of the policies to the plaintiffs, without the consent of the insurer, rendered them void, and section 2102 of the Civil Code is cited to support such contention. That section provides that "an alienation of the property, and a transfer of the policy, without the consent of the insurer, voids it"; but this section is not ap plicable after a loss occurs. "After the loss occurs, a sale of the property and transfer of the policy does not affect the liability of the insurer, but the assignee may recover." Section 2105.

2. The contention that the petition showed no right of recovery in the plaintiffs, because each of the written transfers to them was "subject to the consent of the Georgia Cooperative Fire Association, " and such consent was not alleged, is without merit. As the section of the Civil Code last cited shows, no consent of the insurer was necessary to render valid assignments of the policies occurring after the loss. After the loss, the claim of the insured, like any other chose in action, could be assigned without in any way affecting the insurer's liability. Civ. Code 1895, § 2105; May, Ins. 468; Wood, Ins. 189. It has been held, rightly we think, that a condition in a policy of fire insurance prohibiting an assignment or transfer of the same after loss, without the consent of the insurer, is null and void, as inconsistent with the covenant of indemnity and contrary to public policy. Joyce, Ins. §§ 904, 2322; Roger Williams Ins. Co. v. Carrington, 43 Mich. 252, 5 N. W. 303; Alkan v. New Hampshire Ins. Co., 53 Wis. 136, 10 N. W. 91; Goit v. Ins. Co., 25 Barb. (N. Y.) 189; Courtney v. Ins. Co., 28 Barb. 116; West Branch Ins. Co. v. Helfenstein, 40 Pa. 289, 80 Am. Dec. 573. The policies of insurance having been assigned after loss, the assignee simply stood in the shoes of the assignor, and any valid defense which the insurer might have had against the insured could be set up against the assignee. No right of the insurer being affected by the assignments of the policies, it would be a mere act of caprice or bad faith for it to take advantage of the stipulation that the transfers were subject to its consent, by withholding such consent, in order to defeat the claim of the assignee. The assignments being perfectly valid without the consent of the insurer, and its rights being in no way affected thereby, the condition in question was superfluous, and the law will not tolerate its enforcement against the assignee. The words "subject to the consent of the Georgia Co-operative Fire Association" are to be treated as mere surplusage. Doubtless the assignor, by mere Inadvertence or mistake, merely filled out a blank form on the back of the policy for an assignment before loss, or followed the wording of the previous assignment of one of the policies before loss, to himself.

3. One ground of the special demurrer was that the petition declared upon a written adjustment of the loss, and a special promise in writing by the defendant to pay the amount of such adjustment, and that no copy of the adjustment or of such written promise was attached to the petition, and therefore the suit should be dismissed. We agree with the view taken by the defendant in other grounds of its demurrers; that is, that this was a suit upon the insurance policies, and not upon a written promise to pay the specific amount shown by the written adjustment of the loss. In the first place, the petition did not allege that the defendant or its adjuster promised in writing to pay the amount of the adjustment, or any other amount. The allegation was that the adjuster of the defendant had "adjusted said fire loss with the said Bordeaux in writing for the sum of three hundred and thirty-three" dollars and fourteen cents, "and had agreed to pay it within a reasonable time." From this it appeared that the adjustment was in writing, but whether the agreement to pay the amount thereof was in writing did not appear. There was no allegation that anything had been assigned to the...