Wood v. American Fire Ins. Co. of Philadelphia, PA

• Citation: 149 N.Y. 382,44 N.E. 80
• Parties: WOOD v. AMERICAN FIRE INS. CO. OF PHILADELPHIA, PA.
• Decision Date: 26 May 1896
• Court: New York Court of Appeals

149 N.Y. 382

44 N.E. 80

WOOD

v.AMERICAN FIRE INS. CO. OF PHILADELPHIA, PA.

Court of Appeals of New York.

May 26, 1896.

Appeal from supreme court, general term, Third department.

Action by Jennie M. Wood against the American Fire Insurance Company of Philadelphia, Pa., on a policy of fire insurance. There was judgment for plaintiff, which was affirmed by the general term (29 N. Y. Supp. 250), and defendant appeals. Affirmed.

Gray, J., dissenting. 29 N. Y. Supp. 250 , affirmed.

Michael H. Cardozo, for appellant.

T. F. Conway, for respondent.

O'BRIEN, J.

The plaintiff recovered upon a policy of insurance, of which she was the assignee, signee, issued by the defendant, upon a building used as a store, January 9, 1891, and which was destroyed by fire March 31, 1891. The only defenses interposed by the answer, which were proven and found at the trial, were: (1) That Wood Bros., a firm composed of six brothers, which owned the property and procured the insurance, had not, at the time, the sole and unconditional title or ownership of the property; and (2) that the property convered by the policy had been sold upon judgment and execution against the firm some days before the loss. The contract was made by means of what is known as the ‘standard policy,’ which contained the condition that it ‘shall be void * * * if the interest of the insured shall be other than unconditional and sole ownership, or * * * if any change, other than by the death of an assured, take place in the interest, title or possession of the subject of the insurance * * * whether by legal process or judgment, or by the voluntary act of the insured or otherwise.’

With respect to the defense first referred to, it appeared that in the year 1885, one of the individuals composing the firm made a general assignment of his individual property for the benefit of his creditors, and also of his interest in the firm; that in 1888 his assignee sold whatever interest in the firm property that passed to him by the assignment to a third party, and before the policy was issued had accounted and been discharged. The assignee had no accounting with the firm in order to ascertain what interest the assignor had, if any, in the surplus, if any, and no claim was ever made upon the firm for anything passing by the assignment. It appeared by the proofs and findings that the defendant's agents, who were, as may be fairly inferred, general agents, knew, at the time of issuing the policy and before, all the facts and circumstances with respect to the individual assignment and the transfer of that interest as above stated. The answer to the defense, based upon these facts, is twofold: (1) That, since the title to the real estate held by a partnership is in the firm, and not in the individual members of it, the transfer of the interest of one of the members, before the insurance, had no effect upon the unconditional and sole ownership of the firm; that an assignment by one partner of his share in the partnership stock simply transfers any interest he may have in any surplus remaining after payment of the firm debts and the settlement of the firm accounts. Whether the purchaser of such an interest takes anything whatever by the transfer cannot be known until all the partnership affairs have been settled and adjusted. Menagh v. Whitwell, 52 N. Y. 146. The title to the real property, which was the subject of the insurance, was in the partnership firm, and was not affected by the assignment of one of the members. It still remained firm property, since the assignee had no interest in it as such, and whether the sale or transfer by the individual member was anything more than a mere form, or conveyed anything to the assignee, must depend upon the existence of a surplus after the partnership affairs are adjusted. It does not even appear, in this case, that there would then be any surplus to divide, though that circumstance cannot be regarded as material upon the question whether such a transfer by a member affects or changes the estate or interest which the firm has in the partnership realty. (2) That general agents of an insurance company may waive stipulations and provisions, contained in the...