London Assur Corp v. Drennen

• Decision Date: 18 January 1886
• Citation: 6 S.Ct. 442,116 U.S. 461,29 L.Ed. 688
• Parties: LONDON ASSUR. CORP. v. DRENNEN and others, Partners, etc. 1 Filed
• Court: U.S. Supreme Court

6 S.Ct. 442

116 U.S. 461

29 L.Ed. 688

LONDON ASSUR. CORP. v. DRENNEN and others, Partners, etc.¹

Filed January 18, 1886.

[Statement of Case from pages 461-465 intentionally omitted] C. K. Davis, for plaintiff in error.

[Argument of Counsel from pages 465-468 intentionally omitted] L. J. C. Drennen, for defendant in error.

HARLAN, J. This case has been once before in this court. Drennen v. London Assur. Corp., 113 U. S. 51; S. C. 5 Sup. Ct. Rep. 341. It is an action upon two policies of fire insurance executed March 10, 1883, and covering certain goods, wares, and merchandise belonging to the firm of Drennen, Starr & Everett. Each policy contains the following provisions: 'If the property be sold or transferred, or any change takes place in title or possession, (except by succession by reason of the death of the insured,) whether by legal process, or judicial decree, or voluntary transfer or conveyance, * * * then, and in every such case, this policy shall be void.' 'If the interest of the assured in the property be any other than the entire, unconditional, and sole ownership of the property for the use and benefit of the assured, * * * it must be so represented to the corporation, and so expressed in the written part of this policy, otherwise the policy shall be void. When property has been sold or delivered, or otherwise disposed of, so that all interest or liability on the part of the assured herein named has ceased, this insurance on such property shall immediately terminate.'

The insurer contends that after the execution of the policies, and before the loss of July 29, 1883, there was, by the voluntary act of the insured, a sale or transfer of the property, or such a change in title or possession as rendered the policies, by their terms, void. This defense rests entirely upon the claim that, prior to the loss, one Arndt was admitted as a partner in the firm of Drennen, Starr & Everett. The plaintiffs deny that he ever became a partner with them, or ever acquired any interest in the property insured. Upon the record as it was at the former hearing, that question depended mainly upon the construction of the written agreement of May 24, 1883, which is given in full in 113 U. S. 52, and 5 Sup. Ct. Rep. 341, whereby the insured agreed to receive Arndt 'into their business,' upon certain terms and conditions, among which are the following: That the company should be incorporated; that Arndt should pay into the firm for its use, on or before June 14, 1883, the sum of $5,000, and a like sum on or before January 1, 1885, the latter amount, until paid, to be evidenced by his promissory note, dated January 1, 1883, and each payment to bear interest at 8 per cent. from the date last named; that the business 'to be carried on by the new company to be formed,' the name of which was to be thereafter determined, should be of the same nature as that then conduct by Drennen Starr & Everett; and that 'no change in the name or character' of that firm 'shall be made until said corporation shall be formed.' Arndt paid to the firm, on the eighteenth of June, 1883, the sum of $5,000, and executed on the third of July of the same year the required note for a like amount, the money and note being entered to his individual credit on the books of Drennen, Starr & Everett. Upon this state of facts this court, reversing the judgment rendered for the insurer, said: 'The instruction by the court below proceeded upon the ground that the payment by Arndt in cash and notes of the amount which he agreed to pay, and their receipt and entry upon the books of the firm to his credit, gave him an interest as partner in the business, whereas such facts only established the per-performance of some, not of all, the conditions prescribed; for, by the agreement, the formation of the proposed corporation was expressly made a...