Merrill v. Colonial Mut. Fire Ins. Co.
| Decision Date | 15 June 1897 |
| Parties | MERRILL v. COLONIAL MUT. FIRE INS. CO. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
John
W. Corcoran and W.B. Sullivan, for petitioner.
W. Orison Underwood, for himself as receiver.
This petition, brought to establish a claim disallowed by the receiver, was reserved for the full court, upon an agreed statement of facts, from which it appears that the claim is for a fire loss, of which due proof was made by the assured in behalf of the petitioner, and that the amount to be recovered, if he can recover either in his own name or in that of the assured, has been adjusted by himself and the receiver, without prejudice, in the sum of $1,100. As the proceedings are in equity, and the questions are raised upon an agreed statement of facts, the claim will be established in favor of the petitioner, who has the beneficial interest in it, if the defendant is liable to any one for the loss. The policy was issued October 1, 1895, to Frederick Barlow, the owner of the property insured. The policy contained a condition that it should be void if assigned without the consent in writing or in print of the company. On November 12, 1895, Barlow filled out and signed a blank, printed on the back of the policy, which was then delivered to the company for its consent, and whose secretary then filled out and signed another blank, also printed on the back of the policy, and returned it. These indorsements were of the following tenor:
Corr never had any interest, absolute or by way of lien, in the insured property. Barlow was his debtor to an amount much more than the amount of the sum written in the policy. As between Barlow and Corr, it was intended by the instrument signed by Barlow to assign to Corr the right to receive whatever might become due to Barlow by reason of any loss suffered by him under the terms of the policy while the same was in force, and this as collateral security for whatever might be due to Corr from Barlow, and it was not intended to substitute Corr for Barlow as the assured. The secretary of the company assented to the assignment in the ordinary course of business, upon its being handed to him by a broker, filled out, and with the request to him to assent on behalf of the company. The form filled by Barlow was the usual and customary form of assignment, printed upon all of the policies of the company; and it is the form which is commonly and usually used by the company for the purpose of transferring absolutely the rights of the original assured in the policy to the assignee, and constituting the assignee, after the assent of the company, the assured. Neither the secretary nor the company had knowledge of the relation between Corr and Barlow, or that Corr had no title in the property, or that he was a creditor of Barlow, or of Barlow's intention to assign the policy merely as collateral security. The company assented to the assignment, believing it to be an absolute assignment of the policy, and believing that thereafter Corr became a member of the company, and all notices since issued by it have been sent to Corr, and not to Barlow. The broker who presented the assignment to the secretary, with the request for the company's consent, was not its own agent. He knew the relation between Corr and Barlow, the ownership of the property, and that the assignment was intended only as collateral security, and did not communicate the facts to the company. The fire occurred on November 14, 1895, and the property was then owned by Barlow, and not by Corr. A proof of the loss was duly made by Barlow for the benefit of Corr. There is no by-law of the company relating to the assignment of a policy for collateral security, and, among the by-laws stated, there is none relating to assignments of any kind or for any purpose. The company is mutual, with the power of assessing its members in accordance with the statutes.
The receiver does not contend that the policy became void under the condition that it should be so if assigned without consent of the company. There was such consent, however obtained, and it has never been withdrawn or disavowed by the company or the receiver; and it is reaffirmed in the contention which the receiver now makes, that, by virtue of the assignment, Corr, and not Barlow, is the assured. Only by the assent of the company could there be a novation which would substitute Corr for Barlow as the assured. The receiver's contentions are that the assignment constituted an absolute transfer of the policy to Corr, whereby he became the assured, and that he cannot recover, because, while he is the assured, he has not suffered any loss, nor has he put in...
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