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Wolfe v. Security Fire Insurance

39 N.Y. 49 Court N.Y. English

Delivered by *50 Hunt, Ch. J.

Contents

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p. 49
John Wolfe v. The Security Fire Insurance Company.

Headnote

An objection to the authority of an agent, which was not made on the trial, cannot be raised on the argument, in this court. To obtain the benefit of it here, it is necessary that it should have been made on the trial, so specifically, that the party would have known what was the detect he was called upon to supply.
The condition in a policy of fire insurance, avoiding the policy, in case of a sale ot the property, does not apply to a stock of goods kept for sale. The goods may he sold and replaced as often as the interests of the owner require, the policy, meanwhile, covering whatever may be on hand. This rule applied where the assured sold the goods to S., who afterward sold them to the wife of the assured, and, subsequently, the assured, by the consent of the company, transferred the policy to his wife. The union of the property and the policy, in the wife, made the contract of insurance effectual.
Under such circumstances an insurance company is not allowed to raise the objection, that an assignment from husband to wife, was void, on tho ground of their incompetency to contract directly with each other.
This was an action on a policy of insurance issued to John Engleheart., upon a stock of watches and jewelry in a retail store. The plaintiff recovered a verdict. The General Term affirmed the judgment thereon, and the defendants now appeal to this court.
The policy was dated April 18, 1860, and was issued hv Owen Gaffney & Go., as the agent of the defendants. On the 16th of May, 1860, Engleheart sold and transferred" the insured property to one Stupp, who immediately thereafter transferred the same to Margaretta, wife of John Engleheart. In July, 1860, Gaffney & Co. gave a written consent to the transfer of the interest of John Engleheart in the policy to Margaretta. On the 10th of July, John executed to Mar^garetta a formal transfer of all his right and interest in the policy.
On the 30th of March, 1861, the property was partially destroyed by fire.
Wm. Allen Butler, for the appellant.
J. C. Coehran, for the respondents.

The defendants object to the evidence that the company assented to the transfer to Margaretta, for the reason that it did not appear that Gaffney & Co. had authority to bind the defendants by the execution of such a paper. It is unnecessary to examine the question whether Gaffney & Co. were authorized to give this consent. It was given in evidence on the trial as the act of the defendants, and proved and acted upon throughout the whole trial as the act of the defendants, by these, their agents. The defendants raised no question of the authority, but themselves assumed it to have been executed by their duly authorized agents, based their other objections and asked for numerous rulings and charges, upon the assumption of the sufficient authority of Gaffney & Co. To obtain any benefit in this court from this defect of authority, it is necessary that the defendants should, on the trial, have pointed out the defect specifically, and so precisely that the other party would have known what was the defect he was called upon to supply. This the party entirely failed to do. It is evident that the objection i is one raised by counsel after the trial had been disposed of on other grounds. It cannot be considered here. (Binnse v. Wood, March Term, 1868.)

The defendants further insist that the sale or transfer of the property to Stupp and then to Engleheart, was without the consent of the defendants, and avoided the policy. The condition in a policy of fire insurance avoiding the policy in the event of a sale of the property of the assured, does not apply to a stock of goods kept for sale. It has been repeatedly held that the assured may sell and replace his entire stock as often as his own interests may require, and that the policy protects whatever goods may chance to be on hand when a fire occurs. (Hooper v. Hudson River Fire Ins. Co., 17 N. Y. 424 ; 1 Phil, on Ins. § 491; Angel on Ins. § 203.)

The policy in question was of that character. When the sale was made to Stupp, the interest in the property and the interest in the policy became separated. While this separation continued, the operation of the policy was suspended, and if a loss had then occurred no recovery could have been

p. 51
had. Engleheart could not have recovered, because he had no goods covered by the policy. Stupp could not have recovered, because he had no policy to cover his interest in the goods. But the moment the interests should again become united by the union of the ownership of the goods and the interest in the policy, in the same person, the policy would again become effectual. If Engleheart had bought other goods, the policy in his name would have covered them. If Stupp had procured the policy he would have had its benefit as an insurance upon the original property. This union took place in favor of Mrs. Engleheart, when, on the 10th day of July, 1861, her husband transferred to her, with the consent of the company, all his interest in the policy, she having previously received from Stupp a transfer of the policy originally embraced in it. These views are fully sustained by Hooper v. Hudson River (supra). The same case decides that the request that the company would consent to an tssignment, was a sufficient notice to them that the party making it had acquired, or was about to acquire, some interest in the goods insured, and was a compliance with the condition of the policy on that subject.

The defendant, on his motion for a nonsuit, objected, as he now does, that the assignment from Engleheart to his wife was void, on the ground that husband and wife are incompetent directly to contract with each other. While this legal rule may be abstractly true, it is subject to so many exceptions and it is so well settled that the wife’s equitable interest will be fully protected, that the defendants can derive no great advantage from it. (Borst v. Spelman, 4 Comst. 284; Winans v. Peebles, 32 N. Y. 423 ; Livingston v. Livingston, 2 Johns. Ch. 537 ; 2 Kent Com. 163, 166.)

The defendants cannot now interpose this objection without a violation of good faith. They agreed to this assignment in July, 1861, and the parties on all sides acted upon it as valid, the defendants enjoying the full amount of the premium, until the occurrence of a loss. The defendants should have discovered the invalidity of this assignment when their assent to it was asked, and have made their objec

p. 52
tion, while there was opportunity for the other party to correct the proceeding or to obtain an insurance in some other company. We have repeatedly held that insurance companies in such matters must exercise the most complete good faith, and this is a fair case in which to apply the same principle. (Hartshorne v. Union Marine Ins. Co., 36 N. Y. 178 ; Solmes v. Rutgers’ Fire Ins. Co., March, 1867.)

Judgment should be affirmed.

Affirmed.

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