Court Opinion

ID: 5188708
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:32:39.592368+00
Date Added: 2024-06-11T08:26:50.424466
License: Public Domain

Hatch, J. (dissenting):
The opinion of Mr. Justice O’Brien is in accord with my views of this case except so far as it relates to the claim of. the Forbes Company against the Crescent Leather Mills Supply Company. It seems to me that the whole purport and intent of the contract issued by the defendant was to insure the Forbes Company for any loss which it might sustain by reason of merchandise- sold, or for which it became responsible,' during the life of the policy and which should be proved by filing proofs of loss at any time within sixty days after the expiration of the policy. The contract in express terms insures against loss sustained by reason of the insolvency of debtors owing the insured for merchandise, or for which it might be liable under its guaranty of sales made of goods of other parties, made between the 1st day of May, 1896, and on the 30th day of April, 1897, -both dates inclusive. Under such contract liability ensues for the loss if the goods be sold and insolvency follows during the period covered by the policy.
Unless, therefore, the contract be in these respects qualified by subsequent conditions, liability for this claim would seem to exist, as the conditions upon which to found the same would be complete. It is the claim of the defendant that its liability is so . qualified and limited by the clause which defines the conditions under which the loss must be sustained. The clause reads as follows : “ Insolvency *604shall be taken into the calculation of losses under this policy, * * * only when,
“ First. The said debtor has made a general assignment for the benefit of his creditors, or has been declared insolvent in legal or judicial proceedings, or an execution has been returned unsatisfied on a judgment obtained against him by the insured or some other creditor for merchandise - sold to said debtor during the period' covered by this policy — provided the said execution has not been returned after the appointment of a receiver or trustee of the property of the debtor.”
It is not contended but", that the facts bring this claim within these conditions save only that the execution was returned three days after the expiration of the policy. -Such qualification, how- • ever, is not expressed in terms by any language which is used, in the policy. The only condition relating to the execution is that it shall have “ been returned unsatisfied on a judgment obtained * * * for merchandise sold to said debtor during the period covered by this policy,” and that it “ has not been returned after the appointment of a receiver or trustee of the property of the debtor.” There is no express provision in this language as to-the time when the execution shall be returned. All requirements are . answered when a judgment has been obtained for merchandise. sold during the period covered by the policy, and an execution has been returned on it before the appointment of a receiver or trustee.
It seems clear to' my mind that the intent and meaning of the policy was to insure for loss sustained upon goods sold during the period covered by the policy, of which the defendant should receive notice within sixty days after its expiration. ■ This position cannot be overthrown except by raising out of the contract an implication that all of the things must have co-existed upon the date when it terminated. This, clearly, would not be so if the proviso at the end of the quoted clause be omitted, and, as such proviso does not relate to any subject presented by the case, it cannot be made applicable. Nor is there any authority for adding anything to it, much less for holding that, by implication, there should be raised or otherwise incorporated into it a provision that the execution must be returned before the expiration of the policy. The words, ^ during the period covered by this policy,” relate to the time of the sale of the mer*605chandise. • This would clearly be the construction if a comma had been inserted after the word “ unsatisfied.” Reading the whole together and construing it in connection with the 1st clause of the policy, and bearing in mind that the intent was to insure for losses upon merchandise sold, it would seem reasonable to so construe these words as relating to the time of the sale and not to the return of the execution. In any event, it would seem that the language used is susceptible of such construction, and, if so susceptible, then it is to be so construed, for we are bound to construe it most strongly against the insurer, as it formulated the provision. The most which I thinlc can be claimed for the defendant is that the clause is ambiguous.. But this does not relieve it from liability, for, in such event, the ambiguity is also to be resolved in favor of the insured. (Goodman v. Mercantile Credit Co., 17 App. Div. 474.) It was thought by the learned referee that the clause in question construed itself. The argument, however, which both preceded and followed this statement, furnishes a striking illustration of the existence of a necessity for refinement in reaching such conclusion, and this result furnishes strong grounds for asserting that there exists at least a palpable ambiguity. This argument finds further support in the fact that the policy defines when the insurer shall receive notice of loss, and when proofs of loss must be served •— in the one case ten and in the other sixty days. It is quite as reasonable to say that these provisions relate to losses which accrue upon sales of merchandise during the period covered by the policy, of which the evidence does not exist upon the date of its expiration to charge liability, but does exist before the expiration of the time within which notice can be given, as to say that the whole evidence must be complete when the policy expired. In either case the loss is the same and was fully in existence before the policy expired. (Sloman v. Mercantile Credit Guarantee Co., 112 Mich. 258.)
For these reasons I think the defendant should be charged with the amount of this claim. I should also have been disposed to hold that the instrument executed by Gretz constituted a general assignment for the benefit of creditors within the meaning of this policy, and that the Winsted Hosiery Company was entitled to an allowance of its claim against him. I do not think that the decision in Goodman v. Mercantile Credit Co. (17 App. Div. 474) held, or that it was' *606intended therein to hold, that a general assignment must be in technical compliance with our statutes relating to assignments for the benefit of creditors, in order to bring it within the terms of the policy. In that case it appeared that the assignment there under-consideration did not purport to assign the whole of the debtor’s property for the benefit of creditors. On the contrary, it appeared that the whole of the debtor’s property was not assigned, and the discussion (p. 478) seems to indicate that an instrument which assigns all of the debtor’s property for the benefit of a part of his creditors in an amount equal to or exceeding the value of the property assigned, without any reservation, would constitute a general assignment within the meaning of this- policy. Such an instrument would seem to possess all of the characteristics of a general assignment for the benefit of creditors. (Brown v. Guthrie, 110 N. Y. 435.) The only limitation exists in the fact that such assignment would not be for the benefit of all the creditors, but only certain specified creditors. If, however, it assign all the debtor’s property to a trustee, without reservation, for the payment of debts equivalent in amount to the value of the property, all the elements of a general assignment exist, and insolvency would, T think, appear within the fair meaning of the term as used in the policy. But the difficulty in applying this rule to the Getz assignment is the fact that it nowhere appears that the property assigned did'not exceed in value the debts of the creditors which the trustee was directed to pay, and from all that appears, it may well be that the property exceeded in value the amount of such debts. Indeed, it is' a fair assumption that such was the case, and that the assignor knew it so to be when the assignment was executed, from the fact that the trustee is required, by the terms of the instrument, to pay any surplus that shall remain after the execution of the trust, to the assignor. The assignment was, therefore, in no sense general, and it was void as-to those creditors for whose claims no provision was made. (Knapp v. McGowan, 96 N. Y. 75.)
I am, therefore, in favor of modifying this judgment, by allowing the claim of the Forbes Company against the Crescent Leather Mills Supply Company and of affirming the judgment as so modified.
Yan Brunt, P. J., concurred.
Order affirmed, with costs.