Kitts v. Massasoit Insurance , 1867 N.Y. App. Div. LEXIS 261 ( 1867 )

By the Court,

Foster, J.

There was no assignment or transfer of any kind, of the policy of insurance, or of any interest therein, from Kitts to Wilmot. It is not claimed that any actual delivery of the policy, or of the certificate of renewal, was made to him; and although the language of the instrument executed by Kitts, taken by itself, is broad enough to include the policy as one' of the choses in action of the firm, yet it is manifest from the whole transaction and its surroundings, that no such thing was intended.

By the agreement, the interest of Kitts in all the personal property, and all the available assets,- passed into the possession of Wilmot, and no part of the §20,000 purchase money was paid, and .none of it was payable until one year thereafter; while, by the terms of the renewal receipt, the policy would . expire within nine months; and why should Kitts assign that also, and allow Wilmot, in case of a fire, to appropriate the insurance money to his own use, and thus reduce the security of Kitts, not only fat the purchase money, but for the payment by Wilmot of the previous liabilities of the firm of Chandler & Kitts ? There was no reason why Wilmot should have the interest of Kitts in the policy. It formed no part of the assets which could be made available in the business of the firm; but was intended to secure against a loss which would be likely, for the time being at least, to break it up; and if the property should he destroyed hy fire, there was the greater reason why Kitts should hold it, as the, ability of Wilmot to pay would 'thereby be decreased.

It is claimed, however, on the part of the defendant, that the policy did pass to Wilmot, and it was retransferred to Kitts by the instrument executed by Wilmot; and it is also claimed that such reassignment does not aid Kitts, because his interest in the policy became void as against the defendant, the moment he executed the transfer, and that if there was an absolute transfer of it from Kitts to Wilmot, it must be conceded that the subsequent reassignment to Kitts does not help the plaintiff’s case.

By the terms of the instrument executed by Wilmot, he agreed to keep all the property “ insured for the benefit of said Kitts; present insurance to he held hy him.” If these words had been inserted in the instrument executed by Kitts, either after the words of conveyance therein to Wilmot, or elsewhere, there would be no question that it was intended that the interest of Kitts in the policy should not pass to Wilmot, but that on the contrary it should be retained and held hy Kitts; because, construing the whole instrument together, such intent would be'palpable. Or, if all that is contained' in both instruments had been contained in one, and had been executed by both parties, then no doubt could be entertained that it was the intent of both parties that the policy should not pass, even for an instant, to Wilmot; and yet, upon the plainest principles of construction, both instruments having been executed and delivered at the same time, they are to be construed together, and the general language of the one will be construed and controlled by the other, when it is necessary to ascertain the intent of the parties; and the general language of the one will be controlled by the specific language of the other. (Stow v. Tifft, 15 John. 463, and per Selden, J., in Hitchcock v. North Western Ins. Co., 26 N. Y. Rep. 70.)

The more important question is whether, by the arrangement between Kitts and Wilmot, there was “any change of title in the property insured,” within the meaning of the condition of the policy? It is not an answer to this objection, that Kitts retained such an interest in the property as was insurable, for the question turns upon the construction of the words above set forth.

■ There is no doubt that if Kitts had so conveyed the property to Wilmot as to pass, absolutely and unconditionally, all his interest therein, the policy as to him would be void; but the question arises upon the construction of the two instruments taken together; and in aid of the proper construction, we are to make every intendment, in case of doubt, in favor of maintaining the liability of the company, because the condition relied upon is-, intended to operate as a forfeiture, and is to be construed strictly. (26 N. Y. Rep. 69.)

No case has been cited, and I have found none, where a construction has been given to the words “ any change of title;” but in Hitchcock v. The North Western Insurance Company (26 N. Y. Rep. 68) it was held that the conveyance of a vessel, accompanied by a reconveyance, by way of mortgage, does not work a transfer or termination of the mortgagee’s interest, within the meaning of a marine policy providing that it should be void if done without- the consent of the insurer. Most clearly the same rule of construction of a condition, which is to be applied in the case of a marine policy, upon a clause like this, is applicable to the case of a fire insurance; and it seems to me that the decision in that case is controlling in this.

[Onondaga General Term, October 1, 1867.

The words there were, “ any transfer or termination,” and when construed together and upon ordinary rules of construction, in a case where no forfeiture was involved, it would seem that when the words transfer or termination were used, the word transfer meant some act which did not terminate the interest of the insured; and yet the court held, in substance, that if the transfer did not entirely terminate the interest of the insured, the policy held good.

How, if the sale and taking back a mortgage for the purchase money, did not transfer the title, how can it be said that such an act changes the title ? Can there be a change of title within the meaning of the policy, by an act which does not transfer the title—a change without a transfer ?

The same rule which was held by the Court of Appeals in the case of Hitchcock v. The North Western Insurance Company, was applied in the case of a fire policy in Phelps v. The Gebhard Fire Insurance Company, (9 Bosw. 404.) I think there was no change of title to avoid the policy, and that the judgment should be affirmed.

Bacon, Foster Mullin and Morgan Justices.]