Olney v. German Ins. Co.

• Decision Date: 30 October 1891
• Citation: 88 Mich. 94,50 N.W. 100
• Court: Michigan Supreme Court
• Parties: OLNEY et al. v. GERMAN INS. CO.

50 N.W. 100

88 Mich. 94

OLNEY et al. v. GERMAN INS. CO.

Supreme Court of Michigan

October 30, 1891

Error to circuit court, Wayne county; GEORGE S. HOSMER, Judge.

Action by William H. Olney and Frank McMurdie against the German Insurance Company of Freeport on a policy of insurance on personal property. The court directed a verdict for defendant, and plaintiffs bring error. Affirmed.

George W. Bates, for appellants.

Howard & Roos, for appellee.

LONG J.

The plaintiffs were partners, carrying on a grocery business in the city of Detroit. On the 1st day of May, 1890, they procured a policy of insurance of $400 in the defendant company on a stock of flour, feed, and other goods, and $150 on hay, etc. The policy was for one year. After the insurance was procured, it appears one of the plaintiffs gave a chattel mortgage upon the property described to secure an individual debt of his. On July 12 1890, the goods caught fire, and were destroyed and injured to the extent of $319.87. The defendant company had no knowledge of the chattel mortgage until after the fire. They refused to pay the loss, and on the trial in the circuit court the jury was instructed to find a verdict for the defendant. Plaintiffs bring error. The policy sued upon is what is known as a "Michigan Standard Policy," and contains this clause: "This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void if the subject of insurance be personal property, and be or become incumbered by a chattel mortgage; or if any change other than by death of the insured takes place in the interest, title, or possession, whether by legal process or judgment, or by the voluntary act of the insured, or otherwise." The defense to the action is based upon the proposition that the placing of the chattel mortgage by one partner upon the partnership property for his individual benefit works a change in the interest of the insured, so that the policy becomes void under the stipulations above quoted, contained in the policy. This stipulation in the policy in regard to giving chattel mortgages is valid and reasonable, and we think the court below not in error in directing verdict for defendant. The placing of the chattel mortgage by one partner for his individual benefit upon the partnership chattels works a change of interest therein. In Hicks v. Insurance Co., 71 Iowa, 119, 32 N.W. 201, it was held that "A...