Burbank & Son v. McCluer & Co. ( 1874 )

Sargent, C. J.

This was the case of a policy issued to one person, McCluer, whose property was insured and with whom the contract was made, but made payable to another person, not according to the interests of each at the date of the policy, but as the interest of the payee might appear at the time of the loss, should one occur. How, then, would this money be payable, at the time of the loss, according to the contract of the parties ? In this particular case there was no need of an assignment of the policy so long as no new party was introduced, and the only change was a change in the arrangement between the person insured and the payee.

What was the condition of the property at the time of the loss, and how must the money be paid ? Not all to McCluer, because Livingston’s interest in the property still continued. But it was not all payable to Livingston, because lie did not at the time of the loss own it all alone. He owned an undivided half of the whole, but in partnership with McCluer, so that it would not be paying according to Livingston’s interest in the property at that time to pay half to him and the other half to McCluer, because his interest in the property was not a divided interest, a sole interest in any part of the property, but an undivided interest in the whole, — an interest that was not and could not bo divided and separated from McCluer’s interest in the whole, but an interest that must continue undivided and in the whole, so long as the same arrangement continued.

The money could only be paid, then, according to the terms of the policy, to the firm, or to Livingston as one of the firm and for the benefit of the firm. By an arrangement between the parties, the property insured had become partnership property, and remained so, and the only way that the insurance could be paid to either of them according as his interest might appear, would be to pay it all to the firm, or all to one or the other of the partners, for and on behalf of the firm.

It would be equitable to pay this money to the firm for the property insured, for the loss for which it was to be paid belonged to the firm. Equitably, the money belonged to the firm; and, as we have seen, if it were paid according to the literal terms of the contract, then it must also be paid to the firm, so that both equitably and legally the money belonged to the firm, just as the goods burned did before the fire; and not only so, but the policy was by its terms payable to the firm, or to one partner representing the firm and on its behalf. Why, then, should not the money go where the property belonged, and where, by the terms of the contract for payment, it must be paid, viz., to one of them for the benefit of both jointly ? ,

The trade between the parties, whether in writing or not, was such as transferred the property to the firm. An assignment of chattels may be by parol as well as by writing. Any trade that conveys the right and interest, or changes the ownership in the property, is an assignment pro tanto of the property itself, because it was in their possession before, and that could not and would not be changed unless one sold out his whole interest in it to a third person; then there would need to be a change of possession. The fact that here were trustee processes served before the money was paid could not change the ownership of the money, but it will be held on the trustee process, just according to the equitable title, the real ownership of it, at the time the process was served. The authorities cited sustain the same view.

The creditors of the firm hold the funds of the firm to pay their debts in preference to the individual creditors of either partner, whether their attachments are first or not, until the partnership debts are paid.

Case discharged.