Herman v. Katz

• Decision Date: 10 December 1897
• Citation: 47 S.W. 86,101 Tenn. 118
• Parties: HERMAN et al. v. KATZ et al.
• Court: Tennessee Supreme Court

47 S.W. 86

101 Tenn. 118

HERMAN et al. v. KATZ et al.

Supreme Court of Tennessee.

December 10, 1897

Appeal from chancery court, Dyer county; John S. Cooper, Judge.

Bill by Herman Bros., Lindaur & Co., and others against Katz Bros and others. There was a decree for complainants, and defendant insurance companies appeal. Affirmed.

M. M Marshall, Stokes & Stokes, Deason & Rankin, and Harwood & Tyree, for appellants.

John Rhum & Son, Draper & Rice, and Nathan Cohn, for appellees.

McALISTER J.

Complainants who are creditors of the defendants Katz Bros., filed these bills in the chancery court of Dyer county, alleging that defendants were fraudulently disposing of their property, and caused attachments to be levied upon a stock of goods in defendants' storehouse, in the town of Dyersburg, Tenn. On the same night the attachments were levied, to wit December 3, 1895, Katz Bros. procured judgments, aggregating about $3,800, to be rendered against their firm before a justice of the peace of Dyer county, in favor of certain relatives and friends. Instanter executions were issued upon these judgments, which, by consent of the sheriff, who had levied the attachments, were levied upon the same stock of goods subject to the prior levy. On December 9, 1895, on motion of complainants in the attachment cases, a receiver was appointed to take charge of the stock of merchandise, and sell the same. About 2 o'clock a. m. on December 10, 1895, and before the receiver had taken charge, the entire stock of goods was destroyed by fire. Katz Bros. were insured against loss by fire on this stock of merchandise in the aggregate amount of $10,500. Complainants thereupon filed amended and supplemental bills in these causes against the defendant insurance companies, attaching the policies, and seeking to subject their proceeds to the satisfaction of their claims. Defendant insurance companies denied any liability on said policies, and, among other defenses, relied principally upon the following clause contained in each of the policies, to wit: "This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void if any change, other than by the death of the assured, take place in the interest, title, or possession of the subject-matter of insurance (except change of occupants, without increase of hazard), whether by legal process or judgment, or by voluntary act of the assured, or otherwise." The contention made on behalf of the insurance companies is that the levy of the attachments and executions invalidated the policies, under the express provisions of this clause. The chancellor was of opinion that the levies of the attachments and executions did not render the policies void, and did not cause any increase of hazard, and that defendant insurance companies were liable on said policies to complainants to the extent of their respective debts, and so decreed. The chancellor further found that, when the fire occurred, the key to the storehouse in which said stock of merchandise was stored was still in the possession of the sheriff. The court further found that the stock of goods was worth more than $10,500, the amount of the insurance. Defendant insurance companies appealed, and have assigned errors.

The second assignment is that the chancellor erred in holding that the levy of the attachments and executions by the sheriff and constable, and the possession of said officers under their levies, and the appointment of a receiver, did not render the policies void under their terms, provisions, and stipulations. It will be observed that each of the policies provides that if any change take place in the interest, title, or possession, whether by legal process or judgment or otherwise, the entire insurance shall be void, excepting, however, a change of occupants, without increase of hazard. The argument is that the levy of the attachments and executions worked such a change in the title, interest, and possession of the subject-matter of the insurance as avoided the policies. It is argued that the limitation contained in the clause "except change of occupants without increase of hazard" refers alone to cases where real estate is the subject of insurance, as the word "occupant" clearly indicates. It is said, further, that, if the word "occupant" may properly be applied to personal property as the subject of insurance, it can only limit the words "possession and interest," and not the word "title." It is further insisted that, if the word "occupants" be construed to limit the entire phrase "interest, title, or possession," the proof shows an "increase of hazard," which, by virtue of said clause, avoids the policy. It is not true, as assumed by counsel for appellants, that the word "occupant" has reference always to real estate. As shown by counsel for appellees, the words "occupant" and "occupancy" are frequently used in connection with personal property by commentators and lexicographers. Blackstone, in chapter 26, bk. 2, p. 400 et seq., under the head of "Of title of things personal by occupancy," says: "Whatever movables are found,--upon the surface of the earth, or in the sea, and unclaimed by the owner,--they belong to the first occupant or fortunate finder." In a subsequent part of the chapter, "accession" is used where title of realty by "occupancy" is discussed. And in the same chapter, on page 399: "A property or title in goods and chattels movable may be acquired by occupancy, which was the only and primitive method of acquiring property at all." See, also, Bouv. Law Dict., title of "Occupancy" and "Occupant," and also, Broom, Leg. Max. 355. Richardson's Dictionary defines "to occupy": "To take or seize; to hold or keep possession of; to possess." Standard: "*** to have in possession and use. ***" Webster defines "occupant" thus: "One who occupies or takes possession; one who has the actual use or possession or is in possession of a thing." Worcester: "One who has the actual use or possession of a thing."

The case of Walradt v. Insurance Co., 136 N.Y. 375, 32 N.E. 1063, presents a striking analogy in its facts, and the questions of law involved, to the case now in judgment. The suit was upon an insurance policy which contained a clause identical in terms with the one at bar. The court said, viz "We must first determine what the parties to the contract intended when they made use of the terms 'change in interest, title, or possession of the subject of insurance, whether by legal process,' etc. *** The change of possession produced by the levy and the action of the sheriff must now be considered. The policy is not avoided, by the terms of the condition referred to, by every change of possession that may take place in the property. A 'change of occupants without increasing the hazard' is excepted from the operation of the condition, and does not invalidate the insurance. Counsel for the defendant argues that the exception in the condition does not...