Citation Numbers: 47 Tex. 406
Judges: Ireland, Roberts
Filed Date: 7/1/1877
Status: Precedential
Modified Date: 9/2/2021
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
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
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.)
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.