The Continental Insurance Co. v. Munns
|22 N.E. 78,120 Ind. 30
|17 September 1889
|The Continental Insurance Company v. Munns
|Supreme Court of Indiana
From the Montgomery Circuit Court.
Judgment affirmed, with costs.
B Crane and A. B. Anderson, for appellant.
H. H Dochterman, for appellee.
This is an appeal from a judgment rendered by the Montgomery Circuit Court in favor of William Munns against the Continental Insurance Company. The questions for decision arise upon the following facts: On January 17th, 1883, the insurance company above named delivered to John Bittle a policy of insurance, by which it insured his dwelling-house and its contents, consisting of household furniture, etc., his barn, shed and granary, and their contents, severally, consisting of farming utensils, wagons, carriages, grain, horses, etc., for a period of five years for a gross premium of $ 37.
At the time the policy was issued Bittle owned the farm upon which the several buildings insured were situate, and the personal property covered by the policy was in the buildings therein described, the insurance being apportioned in specified sums upon the several buildings and the property therein situate.
The policy contained a stipulation of the following purport: "If the applicant shall mortgage, or otherwise encumber the property hereby insured, without notice to and consent of the company endorsed hereon, this policy shall become null and void." On the 27th day of June, 1885, Bittle, without notice to the company, and without its knowledge or consent, mortgaged the farm upon which the house, barn and other buildings insured were situate, to the Provident Life and Trust Company of Philadelphia, to secure a loan of $ 5,000. In the month of September following, he sold and conveyed the land, with the buildings thereon, to William Munns, for the consideration of $ 12,000, and in a few days thereafter, without any new consideration, transferred the policy of insurance to the purchaser. The latter soon afterwards presented the policy to the company's general superintendent, who endorsed its consent thereon that the policy might be assigned to the purchaser, subject to all the terms and conditions mentioned or referred to therein. The company had no notice or knowledge of the existence of the mortgage at the time it gave its consent to the transfer of the policy. On July 27th, 1886, the barn, shed and granary, and their contents, were consumed by fire, entailing a loss amounting to $ 1,700. After the destruction of the property, the company learned of the mortgage executed by Bittle, when it refused payment of the loss, on the ground that placing the encumbrance above mentioned on the property was a violation of the condition of the policy, which rendered it null and void.
Whether the judgment shall be affirmed or reversed depends upon whether or not the company can avail itself of the default of Bittle in an action on the policy by the plaintiff. It must be assumed, as a matter of course, that the latter, when he purchased the farm and took an assignment of the insurance policy, had knowledge of the mortgage on the land, and of the condition relating to encumbrances in the policy.
Imputing to him knowledge of these facts, the question remains, did he take the policy strictly as assignee, subject to all the infirmities, defences, or any forfeiture which the laches or default of the assignor may have imposed upon it? or did the assignment, with the consent of the company, constitute the policy in effect a new and original contract between the latter and the assignee, unaffected by any previous forfeiture that may have occurred? If the transfer of the policy simply substituted the assignee to the rights which the assignor then had in the contract, it may well be said that if the latter had no rights by reason of the forfeiture which occurred prior to the assignment, the mere transfer conferred no new rights on the assignee. If, on the other hand, the assignment of the policy, with the assent of the company, constitutes a new, original and independent contract between the assignee and the insurer, then it is quite clear that no act of forfeiture committed by the assignor before the sale, assignment and consent is available against the policy in the hands of the purchaser newly insured.
A contract of insurance is purely a personal engagement, by which the insurer, for a consideration paid, agrees to indemnify the person insured against loss arising from damage to his property by fire. The contract appertains to the person with whom it is made, and does not run with the property insured. Nordyke & Marmon Co. v. Gery, 112 Ind. 535 (5 Am. St. Rep. 27, 13 N.E. 683); Cummings v. Cheshire, etc., Ins. Co., 55 N.H. 457.
It is abundantly settled that upon a sale and transfer of property covered by a policy of insurance, and an assignment of the policy to the purchaser, duly assented to by the company, a new and original contract of indemnity arises between the insurance company and the assignee, which the latter may enforce without regard to what may have occurred prior to the assignment. The policy, it is said, in such a case, expires with the transfer of the estate, so far as it relates to the original holder, but the assignment and assent of the company thereto constitute an independent contract with the purchaser and assignee, the same in effect as if the policy had been reissued to him upon the terms and conditions therein expressed. Wilson v. Hill, 3 Metc. 66; Fogg v. Middlesex, etc., Ins. Co., 10 Cush. 337; Flanagan v. Camden, etc., Ins. Co., 1 Dutch. (N. J.) 506; Cummings v. Cheshire, etc., Ins. Co., 55 N.H. 457; Steen v. Niagara, etc., Ins. Co., 89 N.Y. 315; Shearman v. Niagara, etc., Ins. Co., 46 N.Y. 526; Hooper v. Hudson River, etc., Ins. Co., 17 N.Y. 424; Ellis v. Council Bluffs Ins. Co., 64 Iowa 507, 20 N.W. 782; Wood Insurance, sections 110, 366.
Where an estate is sold and the policy transferred to the purchaser, and upon notice to the insurer he assents to it, a new and original contract of indemnity arises to the assignee, which he may enforce in his own name. The policy in such case...
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Cont'l Ins. Co. v. Munns
......C. Snyder, Judge. Action by William Munns against the Continental Insurance Company upon a policy of insurance. Judgment was rendered for plaintiff, and defendant appeals.Crane & Anderson, for appellant. H. H. ......