Duncan v. China Mutual Insurance

14 N.Y.S. 301 | The Superior Court of the City of New York and Buffalo | 1891

Lead Opinion

McAdam, J.

The contract was one of indemnity, and the defendant by its valued policy agreed that in case the steam-ship Samana was lost at sea it would pay to the Samana Steam-Ship Company, on account of whom it might concern, the sum of $5,000. The loss occurred within the life-time of the policy, and under "its provisions the obligation t'a pay became complete. The meaning and intention of the parties is apparent. The policy insures “W. B. Duncan, Jr., on account of whom it may concern, in case of loss, to be paid * * * to Samana Steam-Ship Company, Limited.” At the end of the policy is the following clause: “It is agreed that any change of interest in the vessel hereby insured shall not affect the validity of this policy.” This contemplated the possibility that happened. While the policy was in force the Samana Steam-Ship Company sold the steamer to the Banana Steam-Ship Company for $41,000, in payment for which it received $12,500 in cash, and a consideration “money mortgage, in the name of the plaintiff, its managing agent, for the balance of the unpaid purchase money, which mortgage, by virtue of the plaintiff’s relations to the Samana Steam-Ship Company, was held" by him in trust for it. Contemporaneously with the execution of these papers, another agreement was executed, by which the Banana Company was to have the benefit of the seller’s policies.of insurance. These instruments are to be construed together, as if all were contained within one. Marsh v. Dodge, 66 N. Y. 537. Their operation and effect were to create the change of interest contemplated by the special provision of the policy, and to make the Banana Company, so far as it became interested in the property, one of those to whom the policy concerned and its provisions extended. The loss was to be paid to the Samana Steam-Ship Company, and the money, when received by it, was to be divided among those concerned, according to their respective interests.

The principles relating to marine policies differ essentially from those affecting fire insurance. A marine policy has a somewhat wider scope than that which is generally attributed to it, and extends beyond the person by whom it is effected to all who derive from him subsequently by a purchase which includes the insurance as well as the property. See cases collated in 2 Amer. Lead. Cas. by Hare & Wallace, (5th Ed.) pp. 883, 884. It was said in Carroll v. Insurance Co., 8 Mass. 515, that the underwriter was entitled to notice of the transfer prior to the loss. But this doctrine is at variance with the authorities which establish that the right to transfer the benefit of a marine policy to a purchaser of the property may be exercised without the knowledge or concurrence of the insurers. 2 Amer. Lead. Cas., supra. The same rule was declared in Hitchcock v. Insurance Co., 26 N. Y. 68. And see Henshaw v. Insurance Co., 2 Blatchf. 99; Hooper v. Robinson, 98 U. S. 528; and, incidentally, Waring v. Insurance Co., 45 N. Y. 606; Clinton v. *304Insurance Co., Id. 454: Cromwell v. Insurance Co., 44 N. Y 42; Savage v. Insurance Co., 52 N. Y. 502. .The special provision in reference to change oí interest was inserted in view of the rule stated, and to dispense with any notice of the change, even if notice would have otherwise been necessary. The phrase “whom it may concern” is a technical one, and applies only to those who are in contemplation of the parties making the contract. Phil. Ins. §383; 1 Duer, Ins. p. 167, § 14; Hooper v. Robinson, 98 U. S. 528; Crosby v. Insurance Co., 5 Bosw. 377. In case of a change of interest in the property and policy the transferee becomes a party concerned within the meaning of the contract, for the introduction of a new party by transfer of interest was authorized by terms of the policy, and was therefore within the contemplation of the parties as fully as if the transferee had been a party in interest at the time the policy was issued. In marine insurance the character of the risk, the value of the property, and amount insured are the main considerations for the insurer, to whom the money is to go in case of loss, is of little consequence, so long as it is paid to a person authorized to receive it. The policy fixed the value of the vessel at $45,000, and, being a total loss,, the defendant is liable for its proportionate amount, $5,000, and there is nothing in the casé which mitigates or reduces it. 1 Am. Ins. 321. The Samana SteamShip Company made an oral assignment to the plaintiff of its rights in the premises, and subsequently the company made a written transfer thereof to one Barnes, and he in turn made a similar transfer to the plaintiff. These writings were executed after suit brought, but were only in .confirmation of what had been orally done before, so that, like any other ratification, it related back to the time when the act was done which it was intended to confirm. These facts clearly established the plaintiff’s right to the insurance money for whom it might concern. The defendant did not plead the non-joinder of the Samana Steam-Ship Company as a party plaintiff, and the transfer aforesaid concludes it as effectually as if it were before the court. There was also a failure to plead the non-joinder of the Banana Company, but its presence as a party was unnecessary. The action was properly conducted in the name of the plaintiff, as assignee of the Samana Steam-Ship Company, for the benefit of the Banana Company, to the extent of its interest. Powles v. Innes, 11 Mees. & W. 10; Wakefield v. Martin, 3 Mass. 558; Earl v. Shaw, 1 Johns. Cas. 313; Sparkes v. Marshall, 2 Bing. (N. C.) 761. The only effect of naming Duncan in the policy was to recognize him as the principal or agent to whom the insurer could look as the responsible creditor for the premium. 1 Arn. Ins. 165. If he had any interest in the subject-matter insured, he was sufficiently covered by the general phrase “whom it may concern,” and did not require to be especially named. The case was carefully tried. The exceptions to the admission of evidence and to the refusals to charge the jury are without merit. The evidence sustains the verdict, and the motion for a new trial was properly denied. It follows that the judgment, as well as the order denying the motion for a new trial, must be affirmed, with costs.

Truax, J., concurs.





Concurrence Opinion

Sedgwick, C. J.,

(concurring.) I agree with Judge McAdam, but would like to say that in my judgment the right of the Banana Company, as represented by the plaintiff, is not based upon its being intended as a party designated by the phrase in the policy “on account of whom it may concern,” but rests upon the terms of the agreement for the sale by which the policy was to be held for their benefit and as collateral security for the payment of the mortgage of the purchase. This, of course, assumes that an assignee by absolute transfer can recover according to his interest at time of loss.