Hyperlawhypertext legal database Martin v. Tradesmen's Insurance 49 N.Y. Super. Ct. 416

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Martin v. Tradesmen's Insurance

49 N.Y. Super. Ct. 416 17 Jones & S. 416 Court N.Y. Super. Ct. Decision date 1883-12-17 English

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JOSEPH MARTIN, et al., v. THE TRADESMEN’S INSURANCE CO.

Headnote

Conversion of policy of insurance on vessel.■—Contract—alteration of.— , Damages.
M. & K., as partners, obtained from defendant a policy of insurance on a certain'vessel, which was made payable to the II. & H. Co., a mortgagee of said vessel, and delivered to said company, who, thereafter, and before the loss of said vessel, allowed an alteration to be made by defendant, the insurer, substituting for M. & K. one G-. as the person for whose account the insurance was made, and making the surplus after satisfying the claim of the mortgagee payable to one B.
In an action brought after a total loss of the vessel, Held, a conversion of
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the paper with the words thereon constituting the contract, but not of the incorporeal and inchoate right of action; that plaintiffs were not bound to recover possession, or make use of the paper ; that though no proofs of loss, etc., had been filed, a recovery could be had, as the damages arise from the tort which prevented i>laintiff from suing on the policy.
The complaint alleged a partnership interest in the vessel, and the proof showed that whatever interest defendants possessed, if any, was individual. Held, that upon this ground, the complaint was properly dismissed, there being no proof of the value of such partnership interest.
Before Sedgwick, Ch. J., and Truax, J.
Decided December 17, 1883.
Exceptions by plaintiff ordered to be heard in first instance at general term.
The action was for damages for the conversion of & policy of insurance.
The action was brought to recover damages alleged to have been sustained by the plaintiffs by reason of the wrongful and unlawful cancellation by the defendant of a policy of insurance issued by it upon the steamer Adelaide« The complaint alleges that the plaintiffs, as co-partners, held the legal title to the steamer, and were the equitable owners of two-thirds thereof ; that on May 22, 1880, the defendant issued a policy whereby it insured the plaintiffs against loss upon the steamer to the amount of $5,000, which sum, according to the terms of the policy, would in case of loss have been payable to the plaintiffs, subject to the amount due to the mortgagee of said steamer; that while said policy was in full force, and on June 18, 1880, the defendant wrongfully and unlawfully, and without the knowledge, consent, or approval of the plaintiffs, cancelled the said policy, as to plaintiff, and destroyed or converted the same, and thereby wrongfully deprived the plaintiffs of the benefit to which they were and would have become entitled upon the loss of said steamer which occurred June 19, 1880. Plaintiffs claimed damages to the amount of $5,000. The policy of insurance was originally made payable to the Harlan & Hollingsworth Co. to the extent of their
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mortgagee interest. The cancellation was the striking out of the names of Martin & Kaskell, the plaintiffs, and. substituting thát of one Garvey, as the person for whose account the insurance was made, and by making balance, over and above, the interest of the Harlan & Hollingsworth Co. payable to one Butler.
The complaint was dismissed at the close of the case,, upon the ground that there was no proof that the plaintiffs sustained any damage by the alteration of the policy ; that if the alteration was made as alleged, it was immaterial.
Further facts appear in the opinion.
W. H. McDougall, for plaintiffs.
—The policy was absolutely cancelled or destroyed by the defendant, and the act constituted a conversion of the policy for which' the defendant is liable in this action (Parsons Ins. 138; Forshaw v. Chabert, 6 Moore, 386; Campbell v. Christie, 2 Starkie, R. 57). After doing all that it could possibly do to destroy the plaintiff’s policy in a fraudulent manner, defendant cannot insist that the policy is still in force, and the plaintiffs should sue on it (Cheses v. Frost, 1 N. H.; Outhouse v. Outhouse, 13 Hun, 130 ; Murray v. Burling, 10 Johns. 172 ). The only question in the case was whether the plaintiffs had an insurable interest in the steamer at the time the policy was made or cancelled, and it should.have been submitted to the jury.
The destruction or cancellation of the policy, if only partial, gave the plaintiffs a right of action for conversion or damages (Waterman Trespass, 12).
The policy of insurance issued by the defendant and paid for by the plaintiffs, became the absolute property of the plaintiffs the moment it. was signed by the proper officers (Hallock v. Commercial Ins. Co., 2 Dutcher's Rep. N. J. 268; Marshall Ins. 210; Whitaker v. Farmers’ Union Ins. Co., 29 Barb. 312 ).
■ The policy of insurance was completely cancelled as to the plaintiffs (Masters x. Miller, 4 T. B. 32).
The measure of clam ages in this case, was per se the
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amount insured, the plaintiffs having shown that they had an insurable interest (McLeod v. McGhie, 2 Scott’ s New Rep. 604; Outhouse v. Outhouse, 13 Hun, 130 ; Thayer v. Manley, 73 N. Y. 305 ).
James K. Hill, Wing & Shoudy, for defendant.
-—The policy, according to the terms of the complaint, was made payable to the mortgagees to the extent of their interest, and it is not shown that the plaintiffs had any interest which would not be completely covered by the mortgage. If the defendant, as alleged, issued its policy upon the steamer in question, the plaintiffs’ remedy was clearly upon that policy, after complying with its terms and filing proofs of loss.-
Plaintiffs had given three several bills of sale of the boat, vesting the title thereto absolutely in one J. Garvey. The attempt by the plaintiffs to vary these bills of sale by parol evidence was wholly unavailing. It did not tend to show legal title in plaintiffs, and without title they had no standing in court.

—There was evidence of a conversion of the policy. The mortgagees of the vessel received the policy from the defendant at the time it was made and retained it down to the trial. In the meantime, the words of the policy had been changed so as to destroy the contract in favor of Martin & Kaskell. that apparently existed in the first place. The jury would have had a right to find, that this had been done by the defendant with the co-operation of the mortgagees. This was a conversion against Martin & Kaskell. The thing convert d. was the paper with the words thereon that- constituted the contract, and not the incorporeal and inchoate right, of action, which cannot be converted. It is true that if the plaintiffs were in possession of the paper, they could under proper circumstances have recovered upon the contract as it was before alteration. After the act of conversion, they were not bound to recover possession or make any use of the paper. They could leave the defendants to the consequences of their wrong.

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It would be no objection to a recovery in this action, that as the plaintiffs had made no proof of loss, etc., and could not have recovered on the policy, therefore they were not damaged. The damages would 'flow from the fact that plaintiffs had been prevented from bringing an action upon the policy by the tort of the defendants.

For another reason, however, the plaintiffs had no interest in the policy that would sustain their recovering beyond a nominal sum.

At and before the policy was first issued, each of the plaintiffs had severally conveyed one half of the vessel, in separate bills of sale, to John Garvey. They were partners under the name of Martin & Kaskell, and the complaint alleges a copartnership interest as the foundation of the claim. As a copartnership they had no interest in the vessel beyond a right to use it in trade. The policy ran to Martin & Kaskell, the firm. It may be considered that under the agreement, intimated by the evidence, they were entitled to a bill of sale from Garvey of one third of the vessel each and that they severally had an insurable interest to such extent. This, however, does not alter the case in .as much as the policy did not insure such interests, but a partnership interest. As there was no proof of what was the value of the partnership interest, the direction of the judge, dismissing the complaint should not be disturbed.

Plaintiffs’ exceptions overruled and judgment on the direction below to be entered for defendant with costs.

Truax, J., concurred.

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