Bayless v. Merchants' Town Mutual Insurance

BROADDUS, J. The policy sued on was originally issued by defendant to W. 0. Leonard on the twenty-second day of August, 1902, insuring a stock of merchandise at Alanthus, Missouri. On the twenty-fifth day of October, 1902, the said Leonard assigned said policy to plaintiff, who had become the owner of the property-, on which day the agent of the defendant approved of said assignment. On the thirtieth day of October, following, a fire occurred which destroyed the whole property insured. The policy recites that if an inventory of the goods should not be taken within, twelve months prior to its date, then one should be taken within thirty days thereafter; and for failure to take inventory, as thus specified, the policy would become void from that time. And it was also stipulated that the assured would keep a set of books which would plainly- present a complete record of all business he has transacted, including all purchases, sales and shipments, for both cash and credit from the date of such inventory; and that for security, he would keep such inventory and books in a fire-proof safe. Whereas, plaintiff does not concede that Leonard, the original policy holder, had taken no inventory of the merchandise from the date of the policy until he assigned it to plaintiff — as is contended by defendant— he does not rest his case upon a compliance by Leonard of the terms of the policy in that respect; he basing his right to recover upon the ground that when he took the assignment of the policy with the consent of the company it became a new contract and was not subject to forfeiture for any failure of the originally insured to comply with its terms. In Ellis v. Ins. Co., 64 Iowa 507, the court held: “As plaintiff had purchased the insured property and defendant, consented to tfee assignment of the policy to [688] him it became a new contract and unaffected by tbe acts of the original person insured. ’ ’ This principle is supported by tbe Continental Ins. Co. v. Munns, 120 Ind. 30; Shearman v. Ins. Co., 46 N. Y. 526; Ellis v. Ins. Co., 32 Fed. 646; Stien v. Ins. Co., 89 N. Y. 315. Tbe foregoing rule of law, we think, is both reasonable and just. . Tbe change in ownership of personal property is a matter of frequent occurrence and when insured it is customary for tbe.seller to transfer to tbe purchaser bis policy; and it would be a bard rule to bold such purchaser and transferee liable for tbe delinquences of tbe party originally insured. Tbe contractual relationship between insurer and insured being terminated by the transfer of tbe policy and no longer binding as between them, and no injury having been suffered by tbe insurer on account of any violation of tbe terms of tbe policy by tbe original bolder thereof, be ought not to be permitted to evade liability on that ground for any subsequent loss.' And tbe further defense that plaintiff failed to take an inventory and keep books is also unavailing as, under tbe terms of tbe policy, which is construed to be a new contract, be bad thirty days after tbe assignment to take an inventory and commence keeping books, and as tbe fire occurred before tbe expiration of that time be was not in default in that respect. And tbe contention that tbe court committed error in refusing defendant’s instruction requiring tbe jury to find that Leonard was tbe sole and unconditional owner at tbe time tbe policy was originally issued or their verdict would be for tbe defendant, can not be sustained for tbe reason given that all forfeitures bad been waived by reason of tbe transfer of tbe policy tó tbe vplaintiff. And as to whether tbe plaintiff, at tbe time of said transfer, was tbe owner of tbe goods, was submitted to tbe jury and they found that be was such owner. And there was ample testimony to sustain tbe finding. Cause affirmed. All concur.