Dadmun Manufacturing Co. v. Worcester Mutual Fire Insurance

52 Mass. 429 | Mass. | 1846

Hubbard, J.

It is a fundamental principle of the law of insurance, that the assured must have something at risk at the time of the loss, to entitle him to recover. Otherwise, wager policies would constantly be made, and gambling would be carried on, under the name of insurance.

The facts in this case are. that the assured, being embarrassed, assigned their property, including the premises insured, to Dadmun, Church and Lord, as trustees, to sell the same and pay the debts secured by the assignment; and the deed of assignment contained only a qualified release of the assignors. This deed, it is now said by the plaintiffs, was fraudulent and void against creditors, by force of the statutes of 1836 and 1838. However that may be, it does not lie with the assignors to aver their fraud in making that deed, in order to avoid the title made by them under it, and thus be allowed to fall back upon their former title. Carroll v. Boston Marine Ins. Co. 8 Mass. 515.

The insured property was sold at auction, in August 1844, under an interlocutory decree of the circuit court of the United States, for a valuable consideration, to De Witt, Skinner and Jones, who had bought up the greater part of the debts against the assignors, after the bill in equity was filed against the assignors and assignees, by a creditor who was not a party to the assignment; and the assignees afterwards executed a deed to said De Witt and others, pursuant to such decree. And we are of opinion that this deed conveyed the whole estate to the purchasers, with the knowledge and consent of the assignors, who are plaintiffs in the first of these actions; and that, by reason thereof, there remained in them no longer any legal or equitable estate, and that they had nothing at risk in the insured premises.

But no notice of that conveyance was given to the defendants, nor did any assignment of the policy take place within sixty days thereafter. This was a violation of the tenth rule or by-law of the defendants, of which they may avail themselves. It is said that this conveyance waS in trust to pay debts which the property was more than sufficient to cover. But this fact does not alter the character of the conveyance, nor make it less an alienation. A payment of those debts by the assignors themselves would not have revested the estate in them. To produce this effect, a conveyance from their grantees would have been necessary. But no such payment took place. Other creditors came in, and a public sale was made, which took away any equitable interest which the assignors had in the estate.

The assignment of the policy, after the loss, and within sixty days from the conveyance, does not bear upon the case. The provisions of the defendants’ tenth rule or by-law relate to assignments before a loss, and when the insurers have a right to know, and an interest in knowing, for what persons they stand as insurers; and for their protection in this respect, that rule was made. But after a loss, the rights and duties of the parties are changed. The policy is then a mere chose in action, and may be assigned, like any other chose in action, and a suit may be maintained thereon, for the benefit of the assignee, in the name of the insured. But the plaintiffs in the first of these actions had parted with the insured property, before the loss, without giving the required notice; and at the time of the loss they had nothing at risk.

Judgments in both actions for the defendants.