Allen v. Hudson River Mutual Insurance

By the Court, Harris, J. It was insisted upon the trial that the action had been commenced prematurely. The preliminary proofs were delivered on the 24th of July. The suit was brought on the 10th of November, in the same year. By the terms of the policy, the loss was to be paid within sixty days after notice and proof thereof made by the assured, in conformity to the conditions annexed to the policy. The loss became due immediately upon the happening of the fire, and would have been payable at once,-but for this provision in the policy. By the 16th section of the general insurance act, under which the defendants were incorporated, (Sess. Laws 1849, p. 448,) suits at law may be prosecuted for losses, if payment is withheld more than two months after such losses shall have become due. The defendants insist that the effect of this provision of the statute is, to extend the credit to which they are entitled, for the period of two months beyond that for which they had stipulated by the terms of their contract. But I do not so construe the statute. ■ [445] The loss became due when the property was destroyed, or at any rate, when the requisite proofs were furnished. Without the statute, and had there been no stipulation in the contract to prevent it, a suit might have been commenced at once. But though due when the proofs were delivered, the statute had the effect to postpone the time of payment two months. It was then a debt debitum in prcesenti, solvendum in futuro. The defendants, without reference to the provision of the statute, saw fit to stipulate in their contract for a similar credit. Had they agreed to pay in ten or thirty days after proof of loss, they might have been sued at the expiration of this period, notwithstanding the provision of the statute. The only effect of that provision is, to fix the time within which the loss should be payable when the parties have omitted to do so by the terms of their contract, (a.) The competency of Fellows as a witness, has been substantially determined in the case of Allen v. The Franklin Fire Insurance Company, just decided. It was there held that one who had made an assignment for the benefit of creditors, was a competent witness in an action by the assignee. In this case, the assignment was made to the plaintiffs to indemnify them against their liabilities as indorsers for the assignors. But it also appears that, subsequently, the assignors had made a general assignment for the benefit of their creditors, thus bringing the case within the principle of Allen v. The Franklin Fire Insurance Co. It becomes unnecessary, therefore, to inquire whether, when an assignment is made merely to secure a debt or liability, the assignor is to be regarded as the party for whose immediate benefit the action is prosecuted. It is enough that by means of his general assignment to trustees, for the benefit of his creditors, he ■ was rendered competent. Nor was any notice of the intention of the plaintiffs to examine their assignor as a witness necessary. This was also decided in the case just cited. The defendants are to be presumed to know that the assignor was a competent witness, and being themselves parties to the contract, that he might be called to testify against [446] them. There is no more reason why they should be notified that he would be so called than in the case of any other material • witness. Kor was it error to allow the witness to state the purpose for which the securities were given to the plaintiffs. Such evidence has always been deemed admissible. (See Truscott v. King, 2 Selden, 147.) By a condition annexed to the policy, it was declared that in case “ an incumbrance should fall or be executed upon the property insured, sufficient to reduce the real interest of the insured in the same to a sum only equal to or below the amount insured, and the insured should neglect or fail to obtain the consent of the company thereto, then and in that case, the policy should be void.” The defendants insist that the mortgage executed by the insured to the plaintiffs, in February, 1851, was a violation of this condition, and avoided the policy. But, assuming that such a mortgage may be an incumbrance, within the meaning of the condition, which, I think, may well be doubted, I am unable to see how the real interest of the insured in the property incumbered, has been reduced by means of the mortgage. If we are to regard the parties named in the policy as the insured, they still remained the owners of the property, and had the same insurable interest, after the execution of the mortgage, as before. The only effect of the mortgage was, to enable the mortgagees, instead of the mortgagors, to dispose of the property, and apply the proceeds to the payment of the debts of the mortgagors. When this should be done by either, the liability of the defendants upon the policy would be discharged. Until this should be done, the insurable interest of the mortgagors would remain undiminished. On the other hand, regarding the plaintiffs, who became at the time the mortgage was executed,- the holders of the policy, as the parties insured,, it cannot be pretended that their interest in the property was diminished. The policy was assigned with the consent of the defendants. The assignment was made, and the mortgage executed for the same purpose. Both contemplated the plaintiffs’ indemnity. The one or the other would be available, as the property should or [447] should not be destroyed by fire. Upon this state of facts, I do not see how the validity of the policy can be affected by the condition relating to incumbrances. [Albany General Term, February 6, 1854. Wright, Harris and Watson, Justices.] One other ground of .error, relied upon by the defendants, remains to be considered. About the first of July, 1851, the owners of the property effected a further insurance thereon, of-$2000, in the, Columbian Insurance Company. Notice of this insurance was given to the defendants on the 7th of the same month. By the terms of the policy it was provided, that if the insured or his assigns, should make any other insurance upon the property, and should not with all reasonable diligence give notice thereof to the defendants, and have the same indorsed on the policy, or otherwise acknowledged in writing, the policy should cease and be of no further effect. It is insisted by the defendants that the insurance in the Columbian Insurance Company, and the omission to give notice of such insurance, until after the fire, discharged them from further obligation upon their policy. I am inclined to think this objection would have been well founded, had the policy remained in the hands of the parties originally insured. But, it having been assigned to the plaintiffs before the last insurance was effected, and that too, with the knowledge and assent of the defendants, it was no longer in the power of the assignors to do any thing to impair the validity of the policy in the hands of their assignees. (See Traders’ Insurance Company v. Robert, 9 Wend. 404. Tillou v. The Kingston Mutual Ins. Co. 1 Selden, 405.) I am of opinion that the judgment should be affirmed. Footnotes [(a.)] ) See the Utica Ins. Co. v. The American Mutual Ins. Co., 16 Barb. 171.