Margolis v. St. Paul Fire & Marine Ins. Co.

• Decision Date: 31 October 1956
• Parties: Samuel A. MARGOLIS, Tr., v. SAINT PAUL FIRE AND MARINE INSURANCE CO. Samuel A. MARGOLIS, Tr., v. AMERICAN UNION INSURANCE CO. OF NEW YORK.
• Court: New Hampshire Supreme Court

Page 768

125 A.2d 768

100 N.H. 303

Samuel A. MARGOLIS, Tr., v. SAINT PAUL FIRE AND MARINE INSURANCE CO.

Samuel A. MARGOLIS, Tr., v. AMERICAN UNION INSURANCE CO. OF NEW YORK.

Supreme Court of New Hampshire.

Argued June 5, 1956.

Decided Oct. 2, 1956.

Rehearing Denied Oct. 31, 1956.

Broderick, Manning & Sullivan, Manchester, Maurice A. Broderick, Manchester, for plaintiff.

Sheehan, Phinney & Bass, Manchester, Wm. L. Phinney, Manchester, for defendants.

GOODNOW, Justice.

A policy of fire insurance issued in conformance with the standard requirements in this state, as were the policies in question, provides that if it is assigned with the assent of the insurer, the assignee 'may bring an action thereon' and 'may recover the full amount due upon the policy'. RSA 407:23, made a part of the contract of insurance. If the insurer's assent is not secured, it is a condition of the policy that it shall be 'void and inoperative during the existence or continuance' of that condition. This provision is "based upon the idea that the risk and hazard of loss may be increased by a change of ownership." Dudley v. Continental Insurance Company, 82 N.H. 167, 168, 131 A. 354, 355. It is not required, however, as claimed by the plaintiff, that such an assignment be shown to have actually increased the risk materially in order that the policy be inoperative and void. See Golding-Keene Co. v. Fidelity-Phenix Fire Insurance Company, 96 N.H. 64, 68, 69 A.2d 856, 12 A.L.R.2d 591. The stipulation is one which is concerned with the insurer's indemnity obligation to the named insured as the other party to the contract of insurance and is intended to make the benefits of the policy unavailable unless and until the insurer's assent to accept the assignee in substitution for the original insured is given, without regard to whether the assignment actually results in a material increase in the risk.

This condition does not, however, make an assignment without consent 'void, and so no assignment,' as claimed by the defendants. Dube v. Mascoma Mutual Fire Ins. Co., 64 N.H. 527, 528, 15 A. 141, 142, 1 L.R.A. 57. Such an assignment, made in connection with the sale of the insured property, operates to transfer ownership of the policy to the assignee and authorizes him to seek the consent of the insurer to the assignment. Bealmer v. Hartford Fire Ins. Co., Mo.App., 225 S.W. 132; Couch, Insurance, s. 1450d. As owner of the property and the unexpired fire insurance thereon, the assignee acquires the right to have the policy transferred to him without payment of a further premium, provided the insurer agrees to it, or, if the insurer shall not agree, to have paid to him the unearned premiums on the policy upon its surrender to the insurer. Bealmer v. Hartford Fire Ins. Co., Mo.App., 193 S.W. 847; Couch, Insurance, s. 1450r.

The named insured in this case, Goodman's Furniture Exchange, Inc., made an assignment of all its assets for the benefit of creditors in January, 1951. This assignment transferred the policies in question to the assignee, not as incident to the assignment of the property insured, Dudley v. Continental Insurance Company, 82 N.H. 167, 168, 131 A. 354, but as separate items of property which belonged to the corporation and were 'an integral part' of its assets. Dube v. Mascoma Mutual Fire Ins. Co., 64 N.H. 527, 528, 15 A. 141, 142, 1 L.R.A. 57.

The assignee for benefit of creditors apparently took no action to secure the assent of the insurers to this transfer of the policies. Instead, as was agreed by the parties at pre-trial conference, 'Goodman's Furniture, Inc. * * * purchased all the assets of Goodman's Furniture Exchange, Inc. from the assignee for the benefit of creditors' in February, 1951.

In the hands of the assignee for benefit of creditors, the policies were 'void and inoperative', the insurers not having assented to that assignment. However, the assignee continued to be entitled to have the policies transferred to him without payment of further premiums provided the insurers assented thereto, and failing that, to receive payment of the unearned premiums upon surrender of the policies for cancellation. Thus the policies had a value which was not so uncertain as to preclude their subsequent assignment to Goodman's Furniture, Inc., by the assignee for benefit of creditors. See Grant v. Nelson, 100 N.H. ----, 122 A.2d 925. They were part of 'all the assets of Goodman's Furniture Exchange, Inc.' which were sold by the assignee for benefit of creditors to Goodman's Furniture, Inc. By this purchase, Goodman's Furniture, Inc. acquired the policies and stood in the same position as it would have had it been an assignee of the named insured.

The new corporation continued doing business at the same location and requested the defendants' agent to transfer the coverage provided by the policies to it, thereby requesting in effect that the defendants assent to the assignments. That they did not do so is conceded by the plaintiff. The issue presented by his exceptions to the granting of directed verdicts is whether the jury, construing the evidence most favorably to him and drawing all reasonable inferences from it, French v. York, 99 N.H. 90, 91, 105 A.2d 749, could have found that the defendants waived the provisions of the policies making them void and inoperative or are estopped to assert those provisions.

'A waiver is the voluntary relinquishment of a known right. It * * * involves two principal considerations, actual knowledge of the existence of the right and an intention to relinquish it.' Bowen v. Merchants Mutual Casualty Co., 99 N.H. 107, 112, 107 A.2d 379, 383. It is apparent from the record that at least four months before the fire, the defendants had actual knowledge of the assignments of the policies. The question is whether it could be found that they thereafter intended to waive the provisions making the policies void and inoperative. Such an intention may be 'based upon 'conduct under the circumstances justifying an inference of'' a waiver. Bowen v. Merchants Mutual Casualty Co., supra, 99 N.H. at page 112, 107 A.2d at page 384. The plaintiff contends that the defendants' conduct in retaining the unearned premiums without notifying Goodman's Furniture, Inc., that they would not assent to the assignments of the policies was such that a finding of implied waiver could have been made. With this we cannot agree.

Taken most favorably to the plaintiff the evidence indicates that no notice was ever received by Goodman's Furniture, Inc., that the defendants would not transfer the coverage, but the defendants' agent did ask by letter that the policies be returned 'to be cancelled'. In response to this request, William Resnick, the president and treasurer of Goodman's Furniture, Inc. as well as the predecessor corporation, Goodman's Furniture Exchange, Inc., called the defendants' agent who 'asked if I was going to return the policies. I told him * * * that as long as they were paid for I would keep them until they expired'. In the succeeding months before the fire, the defendants' only contact with Goodman's Furniture, Inc. occurred in July when one of their representatives had some conversation with Resnick concerning the whereabouts of the policies and as a result, on July 17, 1951, sent to Goodman's Furniture, Inc., lost policy receipts in connection with the policies in question with a request that they be completed and returned to the defendants' agent or that the policies themselves be returned if located. They did nothing to cancel the policies or return a retable proportion of the premiums as they were entitled but not required to do under the terms of the policies.

The assignment of the policies rendered them void and inoperative unless and until the insurers...