Leinkauf v. Calman — 16 N.Y. St. Rep. 631

Majority

p. 631

William H. Leinkauf, Resp’t, v. Emil Calman et al., App’lts.^[1]

(Court of Appeals,

Filed June 5, 1888.)

Headnote

1. Insurance (fire)—Policy—When not necessary to prove.

The plaintiff loaned money to a certain company, taking the company’s note for its re-payment, secured by collaterals of a mortgage upon the company’s property and a policy of insurance covering the whole or a portion of the mortgaged property. Subsequently a portion of I he mortgaged property insured by said policy was destroyed by fire and the loss was adjusted under the same at a certain sum. Two actions were commenced against the insurance company by third parties and the money agreed to be paid on said policy, which was in the hands of the agent, was attached in one of said actions. An order was made allowing the agents of the insurance company to pay the money into court and substitute the present defendants who were plaintiffs in one of said actions in the attachment suit in their stead, Held, that inasmuch as the existence of the policy as a liability of the company had been admitted by it, by adjustment of the loss, it was not material that it should be proved.

2. Same—May be assigned by parol.

The policy belonged to the plaintiff and was held by him as collateral security for re-payment of a loan, and as a chose in action, it was capable of being assigned by parol and a delivery when there was a valuable consideration.

3. Same—Clause against assignment.

A clause in an insurance policy against assignments is for the benefit of the insurance company and they only, can object to the assignment.

4. Same—Acts of corporation when binding.

An instrument representing a promise or agreement of a corporation, within the scope of its legitimate purposes, through its officers will be considered a valid contract though not bearing its corporate seals.

Plaintiff, a banker of Mobile, Alabama, loaned to the Mobile Furniture Manufacturing Company, a corporation of that state, the sum of $12,000, taking the company’s note for its repayment, secured by collaterals of a mortgage upon the company’s property in its warehouses and of a policy of insurance in the LaConfiance Insurance Company of France, covering the whole or a portion of the mortgaged property. Subsequently a portion of the mortgaged property insured by the said policy, was destroyed by fire and the loss was adjusted under the same at the sum of $4,554.50.

An attachment was levied upon these moneys in the hands of the agents of the insurance company in New

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York, in an action brought in the New York supreme-court by the defendants in the present action, as plaintiffs, upon a claim against the Mobile Furniture Manufacturing Company. The agents of the insurance company paid to-this plaintiff a part of the moneys in their hands and reserved sufficient to protect themselves against the attachment. Upon this action being brought against the agents-to recover the balance of moneys so retained by them, an order was .made permitting them to deposit the moneys to the credit of the action and substituting the present defendants in their stead.

The referee found for the plaintiff and from the judgment of the supreme court, general term, first department, affirming a judgment on his report, the defendants have-appealed.

Stine & Calman, for app’lts; William Man, for resp’t.

The appellants opposed the plaintiff’s right to-recover the moneys in the insurance agent’s hands, which represented the balance of the sum at which the loss under the policy was adjusted, on several grounds; but-there are only two which are material to be considered here.

They say that the policy of insurance and the assignment thereof were not sufficiently proved,' and that the-mortgage to plaintiff was void for defective execution.

As to the first of these grounds of objection to the recovery, we think the appellants have misapprehended their situation in the matter, relatively to the plaintiff’s claim upon the insurance company.

The agreement between the plaintiff and the Mobile Furniture Manufacturing Company was that the re-payment of the loan to them was to be secured by a mortgage of their personal property and by the transfer of a policy of insurance, insuring that property or portions of it, against loss by fire. The policy was not collateral to the mortgage; but was collateral to the note promising to repay the loan. When the plaintiff made his claim upon the insurance company under the policy, which had been delivered to and retained by him pursuant to the agreement I have mentioned, the insurers recognized it and transmitted the sum, at which the loss was adjusted, to their agents in New York for payment. If the insurance company recognized their liability under the policy and the right of the plaintiff to-claim for the amount of the loss, it does not lie in the defendants’ mouths to resist that right of the plaintiff, if, prior to their attachment, plaintiff’s title had attached to the moneys. We think the policy was not material to be proved; inasmuch as its existence as a liability of the com

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pany had been admitted by it by the adjustment of the loss and the remittance of the moneys. The policy was surrendered then and forwarded to the home office in France as the voucher for the payment of the amount of the loss. The witness merely proved the fact that there was such a policy issued by the LaConfiance Company to the Mobile etc. Company, which had come to his possession as agent and had been sent to France .upon payment of the loss and that there was noted on the policy an assignment to the plaintiff.

The referee’s finding that the policy was procured and delivered to the plaintiff when the loan was made, was supported by the evidence, and that plaintiff held the policy until the fire occurred and the loss was adjusted. It was admitted that the policy .contained the usual clause against assignments. But this clause in policies is for the benefit of the insurance company, and if they do not object to the assignment, the defendants certainly are not in a position to do so, as it is not a provision which would enure to their benefit. The proof shows that the policy belonged to plaintiff and was held by him as a collateral security for re-payment of the loan, and under the authorities, as a chose in action, it was capable of being assigned by parol and a delivery, when there was a valuable consideration. Hooker v. Eagle Bank, 30 N. Y., 83 -87; Greene v. Republic, etc., Ins. Co., 84 id., 672.

As to the second ground of defendant’s oojections which I have noted, that the mortgage to plaintiff was void, I do not think that question affects the plaintiff’s right of recovery. The. point taken is that it was not acknowledged or verified in any way, and that it was not a valid obligation of the Mobile Etc. Company.

The proof shows that the mortgage was signed and sealed by certain individuals representing themselves as the president and directors. It purported by its terms to be the act or the company through its president and directors, under power and authority given to those officers by the stockholders, at a meeting previously held where a resolution, authorizing its execution for the purpose of borrowing the moneys in question from plaintiff, had been adopted.

It is not necessary for us to decide in respect of this instrument further than that it represented a promise or agreement of the corporation, within the scope of its legitimate purposes, through its officers, and must be considered as a valid contract, though not bearing its corporate seal. It was a memorandum in writing, evidencing a corporate act, and making the corporation liable to the plaintiff; and it is not for the defendants to object to irregularities or defects of execution.

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The doctrine that no corporate act can be binding without being in writing, or under the corporate seal, has long ceased to be maintained. Angell & Ames on Corp’s., § 231; Danf orth v. Schoharie Turnpike Co., 12 J. R., 227; Trustees of St Mary’s Church v. Cagger, 6 Barb., 576 : Moss v. Averell, 10 N. Y., 449 , 454. But a sufficient answer to the appellant’s argument is that the plaintiff’s right to the policy, or to its proceeds, did not depend on the mortgage. Though the mortgage contained the agreement of the company to keep their property insured against loss by fire for the plaintiff’s benefit, it did not affect the policy itself as an additional collateral security available to plaintiff. The clause was -nothing more than the promise of the company expressed in the instrument, to provide further for plaintiff’s security in loaning money to them.

The learned referee disposed rightly of the case, and his opinion covered all the points made by the defendants in such wise, as to make further notice of them by us unnecessary.

The judgment and order appealed from should be affirmed.

All concur.