Case Name: Fowler v. The New York Indemnity Insurance Co.
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1863-03
Citations: 26 N.Y. 422
Docket Number: 
Parties: Fowler v. The New York Indemnity Insurance Co.
Judges: 
Reporter: New York Reports
Volume: 26
Pages: 414–417

Head Matter:
Fowler v. The New York Indemnity Insurance Co.
A complaint by the assignee of a fire policy averred an insurance of the assignor on his building: that'the policy was duly assigned, with the consent of the insurers: that the plaintiff, at the time of the loss, was the lawful owner of the policy, and of the claim against the insurers by reason of the policy aud loss, and he made a demand of payment, accompanied with the written assent of the person to whom the original assured had, after the loss, assigned all his property.
Held bad, on general demurrer, as not showing any interest in the subject insured of the plaintiff or his assignor.
Appeal from the Supreme Court. The plaintiff, as assignee of one Robert Caldwell, brought this action to recover a loss on' a policy of insurance issued by the defendant. The complaint set out that, on the 6th of January, 1853, the defendant, in consideration of thirty dollars to it paid by Caldwell, issued its policy to him, insuring him in the sum of two thousand dollars “on his three-story and attic stone building, shingle roof, and also on his water-wheel, and on a frame one story building attached, occupied by the said assured as a calico and silk printing machine establishment, by machine and hand power:” that, on the 7th of July, 1853, and while the policy was in full force, the premises covered by the policy were destroyed by fire, and the loss thereby was the sum of two thousand two hundred dollars: that, on the 6th of January, 1853, the day the policy was issued, the defendant gave a written consent to the assignment thereof to the plaintiff, and on the same day Caldwell duly assigned the policy and all his interest therein to the plaintiff; and that, on the 12th of July, 1853, Caldwell made and executed to one Belknap a general assignment of all Ms property, real and personal, in trust, for the payment of his debts. The plaintiff averred in the complaint that he was then, and at the time of the destruction by fire of said property, the lawful owner and holder of the policy of insurance, and the lawful owner and holder of the claim and demand against the defendant accruing by reason of said policy and the destruction of the property covered thereby: that on due proof of such loss, the plaintiff had demanded of the defendant the amount due on said policy, and such demand was accompanied by the written assent of the, said Belknap, assignee of said Caldwell as aforesaid, that the plaintiff might receive the amount of said policy from the defendant To this complaint a demurrer was interposed, on the ground that the complaint did not state facts sufficient to constitute a cause of action. ¿ The demurrer was overruled at special term, and judgment given for the plaintiff, which was affirmed at the general term in the second district, and the defendant appealed to this court.
John K. Porter, for the appellant.
John H. Reynolds, for the respondent.

Opinion:
Davies, J.
The radical defect in the complaint is, that it contains no averment of interest, either in the plaintiff or in his assignor, in the subject-matter of the insurance. This court, in the case of Ruse v. Mutual Benefit Life Insurance Company (23 N. Y., 516), distinctly enunciated the proposition that a policy, obtained by a party who has no interest in the subject of insurance, is a mere wager policy. It was said, in that case, that, aside from authority, this question would seem to be of easy solution. Such policies, if valid, not only afford facilities for a demoralizing system of gaming, but furnish strong temptations to the party interested to bring about, if possible, the event insured against. In respect to insurances against fire, the obvious temptation presented, by a wagering policy, to the commission of the crime of arson, has generally led the courts to hold such policies void, even at common law. It was so held in England, at an early day, by Lord Chancellor King, in Lynch v. Dalzell (4,Bro. P. C., 431), and by Lord Hardwicks, in Saddlers' Company v. Budcock (2 Atk., 557); and the courts in this country have generally acquiesced in and approved of the doctrine. In this State, such policies would fall under the condemnation of our statute avoiding all wagers and gambling contracts of every sort; but they would, no doubt, also be held void, independently of the statute, at common law. In Howard v. The Albany Insurance Company (3 Denio, 301), Bronson, Ch. J., asserted the necessity of an interest in the assured in all cases; referring, in support of the doctrine, not only to the statute, but to the decisions of Lords King and Hardwicks (supra): and, in this latter case, Judge Bronson insisted that, in fire policies, the assured must have an interest at the time of the loss, as well as when t¿e contract is made. I understand the same doctrine to be distinctly affirmed by this .court in the case of Murdock v. Chenango County Mutual Insurance Company (2 Comst., 210), viz., that, upon a policy against loss by fire, no recovery can be had, unless the insured has an interest in the subject insured at the time of the loss; and an established rule in pleading was enunciated in that case, that the plaintiff, or plaintiffs, must aver every fact necessary to show a right to recover, and every such necessary averment must be proved.
In Peabody v. Washington County Mutual Insurance Company (20 Barb., 340), the plaintiff, Peabody, sued as assignee on a policy issued to his assignor, one Biggs, who was also a co-plaintiff. The complaint averred the insurance on the property of Biggs, and the assignment of the policy to Peabody as collateral security. Demurrer, on the ground that the complaint did not state facts sufficient to constitute a cause of action. The court held the demurrer well taken as to the plaintiff Peabody, as it did not appear by the complaint that he had any interest at any time in the property insured, and this was fatal to his right to recover; and the court repeats the well-established rule, that the insured must not only have an interest in the subject-matter of the insurance, at the time of insuring, but also at the time the loss happens—(citing 3 Kent's Com., 371, 375, 4th ed.)
The interest of the assignee must be stated in the complaint, as well as the fire, and other necessary facts, to make out a cause of action. (Granger v. Howard Ins. Co., 5 Wend., 202.) The learned judge who delivered the prevailing opinion, in support of the complaint, in the Supreme Court, says, it is not ordinarily necessary for the plaintiff to allege in his complaint anything which he is not bound to prove in order to make out his case. Hence, he says, it was held, and he believes very generally, that an averment of interest is unnecessary in .declaring on a policy of insurance—citing, as authorities, Nantes v. Thompson (2 East, 385, per Grose, J.); Clendening v. Church (3 Caines, 141); Buchanan v. Ocean Insurance Company (6 Cow., 332). He says, it is true that all these cases were before the passage of our statute to prevent betting and gaming. All of these cases, as is shown in the case of Freeman v. Fulton Fire Insurance Company (14 Abb., 398), decided by the general term of the second district since this demurrer was overruled, were cases of marine insurance. . In such cases an averment of interest was unnecessary, for such policies were valid as wager policies, although the plaintiff in fact had no interest in the subject insured. It follows,- therefore, that neither an averment nor proof of interest could be required to sustain a recovery on such a policy. (Buchanan v. Ocean Ins. Co., supra.)
In the case of Freeman v. Fulton Fire Insurance Company (supra), the Supreme Court held a complaint defective which did not contain an averment that the plaintiff had an interest in the thing insured at the time of the loss, unless the' claim was assigned to him after the loss. In the present case, the policy was assigned before the loss; and, therefore, before the plaintiff could recover, he must prove his interest, and such proof being essential, the interest must be averred in the complaint.
The judgment of the general and special terms must -be reversed, and judgment for defendant, with costs—the plaintiff to have leave to apply to the Supreme Court to amend his complaint on proper terms.
All the judges concurring,
Ordered accordingly.