Loeb v. Firemen's Insurance

Steckler, J. The action is upon a fire insurance policy issued by the defendant to the plaintiff and his then copartner, Leon Platky, carrying on business under the firm name of Adolph Loeb & Co., on partnership property. It appears from the complaint that during the life of the policy and before the alleged loss the copartnership was dissolved, and all its assets, including the policy of insurance, were transferred to the plaintiff, who thereafter continued the business under the same firm name. Material averments of the complaint are put in issue by denials in the answer, which contains in addition two so-called separate defenses. For a second defense defendant sets up, in substance, that the policy is void because of the dissolution of the firm and the assignment of the policy to the plaintiff, and also because of the alleged noneompliance by plaintiff with sections 20 and 21, article 2 of the Partnership Law (L. 1891, ch. 420), and his violation of section 1 of chapter 281 of the Laws of 1833, as amended by chapter 262 of the Laws of 1886, and sections 363 and 363b of the Penal Code, forbidding the use of the words “ & Co.” unless they represent an actual partner. Plaintiff demurs to this defense as insufficient in law. Prior to the adoption of the standard policy it was held that a policy issued to a firm providing that it should he null and void in case of a sale or conveyance of the insured property is not forfeited by a transfer of interest as between the parties assured. Hoffman v. Ætna Fire Ins. Co., 32 N. Y. 405. ITnder the standard form of policy, the corresponding provision of which makes the policy void in the event of a change of interest or title, this [109] seems to be still the rule. Moulton v. Ætna Fire Ins. Co., 25 App. Div., 275; Bartlett, J., in Germania Fire Ins. Co. v. Home Ins. Co., 144 N. Y., 199; Richards Ins. (2d ed.), 160. I do not think, that the plaintiffs noncompliance with and violation of the statutes cited, either alone or coupled with the alleged change of interest, help to sustain its so-called defense. It has been held that the statute of 1833 is highly penal; that it will not be extended by implication or construction to cases not within the terms of the act fairly interpreted, and that the statute was directed against fraud and imposition which might he practiced upon innocent parties who dealt with the person who transacted business in the name of a party whose interest had ceased or who had never any interest in the business. Wood v. Erie R. Co., 72 N. Y. 196; Gay v. Seibold, 97 id. 472; Taylor v. Bell & Bogart Soap Co., 18 App. Div., 175; Sinnott v. German-Am. Bank, 164 N. Y., 386; Zimmerman v. Erhard, 83 id., 74. In the light of these decisions this case is not within the mischief which the statute was designed to remedy. The defendant cannot holster up its defense by mere conclusions of law, for the demurrer admits only allegations which are properly pleaded. Wood v. Amory, 105 N. Y. 278; Knapp v. City of Brooklyn, 97 id., 520; Cohn v. Goldman, 76 id., 284. Demurrer sustained, with costs.