Sun Ins. Office of London v. Merz

• Decision Date: 16 March 1900
• Citation: 45 A. 785,64 N.J.L. 301
• Parties: SUN INSURANCE OFFICE OF LONDON v. MERZ.
• Court: New Jersey Supreme Court

45 A. 785

64 N.J.L. 301

SUN INSURANCE OFFICE OF LONDON

v. MERZ.

Court of Errors and Appeals of New Jersey.

March 16, 1900.

(Syllabus by the Court.)

Error to supreme court.

Action by the Sun Insurance Office of London against Henry Merz. Judgment for defendant, and plaintiff brings error. Reversed.

Edward A. Day and Charles L. Corbin, for plaintiff in error.

Colie & Swayze, for defendant in error.

GUMMERE, J. This is an action brought by the plaintiff in error against Merz to recover upon a policy of insurance by the terms of which Merz and 24 other persons and firms, who had formed an organization known as a "Fire Lloyd's," under the act of March 25, 1895 (2 Gen. St. p. 1784), agreed, for a consideration of $3,000, to reinsure the plaintiff in error for the term of time from the 30th day of September, 1897, at midnight, to the 31st day of December, 1897, at midnight, against all direct loss or damage by fire, to an amount not exceeding in the aggregate the sum of $25,000, nor exceeding the interest of the assured in said property, "to the following described property, to wit, reinsurance of the Sun Insurance Office of London, being a reinsurance of the liability of the Sun Insurance Office for claims for loss and damage by fire or lightning occurring in the months of October, November, and December, 1897, destroying and damaging property located anywhere in the United States and territories. Said property must be damaged or destroyed by fire between midnight of September 30, 1897, and midnight of December 31, 1897." The questions considered and determined by the supreme court, and now presented here for review, are: First, whether what is known as the "Fire Lloyd's statute of March 25, 1895," as amended by the act of March 26, 1896 (P. L. 1896, p. 156), prohibits the making of a contract of reinsurance; and, second, whether the contract now before us is void as being a wagering policy.

The conclusion reached by the supreme court upon the first question submitted was that policies of reinsurance were not prohibited by the legislation referred to; that this legislation confers upon Lloyd's associations, such as the organization which the defendant represents, authority to insure against loss or damage occurring by fire or lightning in favor not only of the owners of property, but also in favor of all those having an insurable Interest therein; and that an insurer of property acquires by his contract an insurable interest therein which he may protect by a contract indemnifying him against loss in whole or in part. 43 Atl. 693. We concur in the construction put by the supreme court upon this legislation, and in the conclusion that it does not prohibit the making of contracts by insurers indemnifying them against loss upon policies which they have issued. The supreme court further concluded that the contract sued on was wholly void, because it stipulated for indemnity against losses upon property in some portion of which the plaintiff then had no insurable interest. The ground upon which this conclusion is rested la that, where an insurable interest does not exist at the time of making...