Washoe Tool Manufacturing Co. v. Hibernia Fire Insurance

Talcott, J.: This is an appeal from a judgment rendered on the report of a referee. The action was brought to recover the amount of a loss by fire upon a policy issued by the defendant. It was originally brought in the name of Charles C. Lathrop, as plaintiff, Lathrop having become the assignee of the policy after the happening of the loss. After the trial had commenced the defendant objected to the introduction of the policy in evidence, because it was issued to the Washoe Tool Manufacturing Company, whereas the action was brought in the name of Lathrop. Thereupon the reference was adjourned, and the Washoe Tool Manufacturing Company presented a petition to the Supreme Court, at Special Term, accompanied by the affidavit of Lathrop, setting forth that the policy had been assigned to Lathrop as collateral security for certain purposes, all of which had been satisfied. That Lathrop had reassigned the policy to the Tool Company, and thereupon, on due notice to the defendant, made a motion that the Tool Company be substituted as plaintiff in place of Lathrop. The order substituting the company as plaintiff in place of Lathrop, was granted, and thereafter the trial proceeded as though the action had been originally commenced in the name of the Tool Company. No proof was given on the trial of any assignment to Lathrop, or any reassignment by him. The referee made an order to conform the proofs to the evidence and to the order of the Special Term, by which the Tool Company was substituted as the plaintiff in the action. The defendant moved to dismiss the complaint upon the ground that no assignment to Lathrop, and no reassignment by him had been proved. The defendant also claims that the court had no authority to make the order of substitution. There seems to be no reason to doubt the power of the court to make the substitution under section 121 of the Code. Besides, the order for substitution was not appealed from, but the defendant submitted thereto and received the costs awarded to him by the terms of the order, and cannot now question its propriety. The only question upon this part of the case is, whether it was necessary to prove the original assignment to Lathrop and his reassignment to the Tool Company. It is a mere technical question, upon a subject in which the defendant has no interest, except to protect himself against a recovery by a party [77] jot entitled to the demand, whereby he might be exposed to another suit. The motion was made by the attorney for Lathrop, and upon the affidavit of Lathrop himself, and the effect of the order for substitution is simply to strike out of the original complaint the allegation that the cause of action had been assigned to Lathrop, and leave the suit to be prosecuted in the name of the original party to the contract, as though no transfer had ever been made. The question was litigated upon the motion to substitute and then decided, and there is no reason which can be suggested why, in such a case, the new plaintiff should be compelled on the trial, for the purpose of sustaining the order for substitution, to show first a transfer of his interest and then a retransfer, inasmuch as upon the proof as it stood the plaintiff was the party entitled to bring the action as the assured named in the policy, and the defendant has no interest, which can be injuriously affected, nor can he be in any way jeopardized, or exposed to the danger of another recovery. The only other point made by the appellant is founded upon the condition in the policy, to the effect, that the defendant was not to be liable upon the policy, until the premium should be paid. It is well settled that such a condition maybe and is waived by the delivery of the policy without exacting the payment of the premium, and that such a delivery imports that a credit is given for the premium. (Bodine v. The Ex. Fire Ins. Co., 51 N. Y., 107.) In the case of Rochner v. The Knickerbocker Life Ins. Co., referred to by the counsel for the defendant, briefly reported in the New York Weekly Digest (vol. 1, No. 16), it appears that the note which was taken by the insurance company for the premium was payable on a day certain, and expressly provided that the policy was to become void in case the note was not paid at maturity, and it was held that the agreement that the policy should be avoided by a failure to pay the note at its maturity, was a valid agreement and binding upon the parties, unless legally waived or modified. In the present case no day was specified for the payment of the premium, but a general credit was given to the assured for the amount of the premium. It is held in Boehm v. The W. City Ins. Co. (35 N. Y., 131), that the policy is valid though the premium be not paid, notwithstanding such a condition contained in the policy. This being so, it is difficult to see how the non [78] payment of the amount on demand, could have the effect to rendei the contract void, any more than in the case of any other contract where a credit is given for the payment of a consideration. Perhaps the failure to pay, within a reasonable time after demand, might authorize the Insurance Company to elect to rescind the contract, but in such a case some positive act or notice, to the assured, of the election to rescind, would be requisite in order to effect the rescission. In this case the repeated demand of the money, with notice that unless the premium should be paid, the company would have to cancel the policy, did not amount to an actual rescission, but rather to an admission that the policy continued in force and would remain in force till actual cancellation, and justice to the assured in such a contract would require notice of the cancellation to be given, that the assured might be able to protect himself by another insurance. The judgment is affirmed. Present — Barnard, P. J., Talcott and Pratt, JJ. Judgment affirmed, with costs.