Mound City Mutual Fire & Marine Insurance v. Curran

Holmes, Judge, delivered the opinion of the .court. The plaintiff brings this action upon certain premium notes. The property insured in the policy had been alienated without an assignment of the policy. The defendant desiring to be insured on other property situated in another part of the city, thé secretary of the company made an, indorsement on this policy to the effect that it should cover that property in the sum of two thousand dollars, and that when the building should be fitted up for the purposes of a distillery an increased rate of premium should then be agreed upon and paid. It was signed by the secretary only. An additional note was afterward given for the increased rate [381] of premium. The defendant continued to pay assessments upon these notes up to the last one due before the time expired, and then refused to pay any more ; and for this the plaintiff sues. There was an express provision in the charter and policy that it should be void if the property should be alienated without an assignment of the policy with it, by consent of the directors, certified by the secretary. This policy was utterly void independently of this provision, for neither the assured nor the alienee of the property insured could have recovered a loss upon it. The premium note might be valid until all assessments had been paid, up to the time of the alienation; but after that the consideration would fail, and it would become void also. (Keenan v. Mo. State Mut. Ins. Co., 12 Iowa, 126; 7 Hill, 49; Atlantic Ins. Co. v. Goodall, 35 N. H. 328.) There was no new policy at all. Whether considered as a new policy or as an agreement for a policy, the indorsement was absolutely void. It appears that both the secretary and the defendant understood and intended it for a new policy, or rather supposed it would be a valid insurance and avoid the expense of a new policy and a stamp. The charter and by-laws provided that policies should be issued only upon a written- application, making representation of all material circumstances affecting the risk, and should be signed by the president and secretary. The secretary had no authority to make a policy or contract of insurance otherwise than in the manner prescribed in the charter and by-laws. (Plahto v. Merchants’ and Manufacturers’ Ins. Co., 38 Mo. 255.) It might be urged that the president had signed the original policy, and that the same instrument was. again issued by the secretary, as a blank newly filled up, upon the new verbal application. This would have been equally without authority, and a fraud upon the company. It was intentionally issued without a stamp, and this was a fraud upon the revenue. The premium note given upon such a transaction must be deemed to have been wholly without any valuable consideration, and' void also. The company has received assessments upon these notes, both destitute of any valuable consideration, during nearly the whole period of the supposed insurance, upon a policy on which the defendant [382] could never have recovered a loss against them, and they now seek to enforce this demand against him. Neither law nor justice can uphold it. We are of the opinion that the instructions given for the plaintiff were both erroneous. Judgment reversed and the cause remanded. The other judges concur.