Court Opinion

ID: 4892925
Source: CourtListenerOpinion
Date Created: 2021-09-02 23:52:49.342622+00
Date Added: 2024-06-11T08:09:47.495860
License: Public Domain

Roberts, Chief Justice.
The partnership, composed of Cohen and two Sampsons, toók out a policy of insurance on a stock of goods for one year, and during the year one of the Sampsons retired from the firm, by selling to his copartners *410Ms interest therein; after which, the business being continued by the remaining members of the firm, in the same place, the goods were destroyed by fire before the end of the year. The remaining partners having recovered a judgment against the appellant, the only question at issue, as agreed upon by the counsel, is, whether or not the company is released by such ' a sale, by one partner to his copartners, under and by force of a provision of the policy of insurance, in the following words, to wit: “ TMs policy is not assignable, unless by consent of this corporation, manifested in writing; and in case of any transfer, by sale or otherwise, without such consent, this policy shall, from thenceforth, be void and of no effect.”
This question has arisen upon similar stipulations in policies of insurance, in many of the States, in most of wMch it has been decided that the company is released by a sale of this sort and the retirement of one of the partners of the firm. In a few others, including New York, the contrary rule is adopted. In the former class, the change in the parties to the contract of insurance, and the change in the parties who sustained the damage in the loss of the property by fire, are the influencing considerations in forming the judgment ; and as different persons own the property lost, that must constitute the damage done, from the persons who made the contract, a suit cannot be maintained by the less number of persons who owned the property when it was lost. (The Baltimore Fire Ins. Co. v. McGowan, 16 Md., 45; Wilson v. Hill, 3 Metc., 69; Tate v. M. F. Ins. Co., 13 Gray, 80.) This would seem to rest on the general doctrine of the rights of parties to sue upon joint contracts, rather than upon the breach of the stipulation in the policy now under consideration. (Pars. on Cont., 13.) In other cases, an additional and a broader view is presented, in which it is considered that the company contracts for the care, diligence, and integrity of each and all of the members of the firm contracted with, in the preservation of the property from loss, as part of the inducement to and consideration of the contract; and that a sale by one of the *411partners, and his retirement from the firm, without the written consent of the company, is a substantial change of the parties to the contract, which this stipulation in the policy was designed to protect it against. (Keeler v. Niagara F. Ins. Co., 16 Wis., 537; Hart. F. Ins. Co. v. Ross et al., 23 Ind., 181.)
In the latter class of cases, in which the Court of Appeals, in the State of Hew York, takes the lead, all of these grounds are attempted to be answered by the conclusion that, considering the scope, object, meaning, and spirit of the contract, such a sale and retirement of one of the partners is not such a change in the persons to the contract, and in the interest in the property lost, as to prevent a suit on the policy by the firm, as it existed when the loss occurred, and that stipulation in the policy under consideration must be understood as intended to prevent only the sale and transfer, of the proprietary interest of those with whom the insurers contracted; to others, with whom they had not consented to contract.
This view is summed up, in a case similar to the one before us, as follows, to wit:
“ The plaintifis were parties to the contract made with the defendant. They were conducting the business contemplated by the terms of the policy. The insurance was intended to cover the mercantile stock, of which the assured were proprietors, stored, from time to time, in the building in which that business was Conducted. There was no substantial change material to the risk, and clearly none within the intent of the proviso. • Each member of a partnership firm, as Lord Hardwick said, is seized, per my. et per tout, of the common stock and effects.” (West v. Skip, 1 Ves. Sr., 242.)
“ This interest of each and all the policy in question was designed to protect, and its language, fairly construed, is in harmony with this intent. There is no reason why the full measure of agreed indemnity should be withheld from the plaintifis, who were owners at the date of the insurance, and sole owners at the time of the loss.” (Hoffman v. Ætna Fire Insurance Company, 32 N. Y. Rep., 416.)
*412The reasons upon which this conclusion is reached in the case cited are so elaborate and exhaustive as to render it unnecessary to repeat them, or to seek to improve upon them. It is founded upon a liberal equity in reference to the objects of both of the parties in making the - contract of insurance, and is believed to be in harmony with our system of jurisprudence in Texas. This court having the question before it now, for the first time, coincides in opinion with the Court of Appeals of the State of New Work, in the case above cited. Apart from having to determine between conflicting views of great weight presented on each side of the question, it is worthy of consideration in respect to the weight of authority, that the decision cited and relied on in aid of our own judgment, emanates from the Court of Appeals, in a State wherein is situated the great commercial metropolis of the continent, and that it has been recently followed by two other States, and has been incidentally referred to, without objection, by the Supreme Court of the United States. (Burnett v. Eufaula Insurance Company, 46 Ala., 53; Pierce v. Nashua Insurance Company, 50 N. H., 297, cited from 9 Am. Rep., 235; Phœnix Insurance Company v. Hamilton, 14 Wall., 509.)
A consideration of importance in this matter is, that it is well known that such changes as tins in the parties of a firm, and others of like character, such as the death or bankruptcy of one of the partners, are of very frequent occurrence, without materially altering, practically, the business or character of the firm; and if insurance companies regard such changes as prejudicial to their interest, it is their duty (especially in reference to the conflict of authority on the subject) to make the stipulations in the policy plain in that respect, which they can easily do.
Affirmed.