Court Opinion

ID: 6662500
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:03:14.839271+00
Date Added: 2024-06-11T16:00:13.165511
License: Public Domain

Sedgwick, J.,
dissenting.
The insured agreed to convey this property to the plaintiff and assign the insurance policy. He afterwards executed the deed, but there was some delay in assigning the policy, and before a formal assignment had been made the building burned. The policy provided that it should be void “if any change took place in the title, possession or interest of the assured, * * * unless otherwise provided by agreement indorsed thereon.” There was a blank form on the policy for assignment and consent of the company, but the insurance company had not executed it. The question is whether the policy was void under'this condition. It clearly did not avoid the policy under the present statute: “The breach of a warranty or condition in any contract or policy of insurance shall not avoid the policy nor avail the insurer to avoid liability unless such breach shall exist at the time of the loss and contribute to the loss, anything in the policy or contract of insurance to the contrary notwithstanding.” Rev. St. 1913, sec. 3187. The majority hold that this section does not apply, because this policy was issued before this statute was enacted. That may be doubtful, but it does not seem to be material, because we had decided the same thing long before this policy was issued. “A contract of insurance, where the insurer has received and retains the consideration, is to be sustained, if possible and should not be defeated upon any ground which does not materially increase the risk.” Billings v. German Ins. Co., 34 Neb, 502. For the same principle the following cases are cited in the brief: Phoenix Ins. Co. v. Barnd, 16 Neb. 89; State Ins. Co. v. Schreck, 21 Neb. 527; Farmers & Merchants Ins. Co. v. Newman, 58 Neb. 504; *461Hanover Fire Ins. Co. v. Gustin, 40 Neb. 828. “It should not be defeated upon any ground which does not materially increase the risk.” This conveyance did not materially increase the risk, since the residence was occupied by a tenant a long time before the conveyance was made, and the same tenant continued to occupy after the conveyance was made and until the house burned. There was no change in the occupancy and no possible increase in the risk. We are not alone in this holding. “Under a provision in a fire insurance policy that it shall be void if the risk is increased in any manner, or if the property is sold or any change is made in the title, or if the property is incumbered or used for other purposes without consent, a change of title, incumbrance or use will not render the policy void unless it increases the risk or decreases the security.” Russell v. Cedar Rapids Ins. Co. (78 la. 216) 4 L. R. A. 538, and note. This seems to be the general rule without a statute.
The majority opinion says: “Moreover, a contract requires the meeting of minds.” If this statement has any force in this case, it must mean that one party to a contract cannot assign his interest therein so as to give his assignee any interest in the contract without the consent of the other party. This is announcing a great change in the law of contracts, and, if adhered to, will disorganize business as at present carried on. If I contract to convey my house and lot to A, and he assigns that contract to B, I cannot refuse to recognize the right of B to a conveyance. The contract becomes one between myself and B, whether I do or do not consent. In the case at bar, Eice could sell his property to Stephenson, including his interest in the insurance, and the contract of sale included the transfer of the insurance policy. As there was to be no change of occupancy of the property, or any other possible increase of hazard, the parties were justified in assuming that the company would consent to the assignment of the policy. The purchaser could not be compelled to take the property under their contract unless an assignment of the policy could be made. There was no attempt on the part of the company to show any reason for *462objecting to a transfer of the policy or that consent would have been refused, except as a pretext for avoiding payment of a meritorious claim. The contract of insurance contemplates that the interest of the insured is assignable, and the company’s consent is formal, unless some reason, contemplated by the contract exists for refusal.
The general rule that a sale and transfer of the property without the due assignment of the policy will avoid the policy does not apply-in this case.