Assignment for Benefit of Creditors

policy or any interest in it without the company's consent plainly forbids any assignment of the policy, whether accompanied by the transfer of an interest in the premises or not, and is therefore broken by an assignment without consent as collateral security for money loaned (which debt was changed afterwards into -a judgment lien and paid off after the fire). For if the debt thus secured is a lien on the premises, a loss by fire might increase the value of the security, as when other liens precede; while, if the debt is not a lien, the collateral security is valuable only in case of loss; both of which positions are hostile to the insurer. Ferree v. Oxford Fire & Life Ins. Co., 67 Pa. 373; s. c., 8 Phil. 512.

29.- When policy has been assigned and delivered before the loss to a third party as collateral security for a debt, which is subsequently paid and satisfied, | and is after the loss again assigned to another party, the latter may have relief in equity. Combs v. Shrewsbury Mutual Fire Ins. Co., 5 Stew. 512 (N. J.)

Assignment by Parol.

Griffey v. N. Y. Central Ins. Co., supra. 34.- Where an assignment entails a forfeiture of the policy, nothing but an effectual assignment or transfer will come within its terms. Authorities cited. Id.

35.- Where a policy of fire insurance is transferred as collateral security for a loan, and upon the destruction of the building the insurance money is remitted to the company's agent for payment to the creditor, another creditor claiming the money by virtue of an attachment against it in the hands of the agent cannot resist the former creditor's right thereto, upon the ground that the policy and its assignment to him were not sufficiently proved, where the policy is shown to have been held by the creditor as a collateral security. Leinkauf v. Calman, 12 Cent. Rep. 777; 17 N. East. Rep. 389; 110 N. Y. 50.

36.— An assignment of insurance policies to a creditor as security for his debt, by having them delivered, when issued, directly to the creditor, the loss, if any, being made payable to him as his interest may appear, is valid; and the lien created thereby is superior to that by garnishment by a subsequent creditor. *Glover v. Wells, 11 Ry. & Corp. L. J. 125; 29 N. East. Rep. 680 (Ill.)

30.- Assignment of policy as collateral security, without a transfer or conveyance of the subject matter of the insurance, ineffectual. Bayles v. Insurance Co., 3 Dutch. 163 (N. J.) 37. Assignment for benefit of cred31.- An assignment of a policy to se-itors. A general assignment by the incure a loan is not such an assignment as sured of all personal property, to pay voids the insurance. Although it seems it creditors, does not render a policy void, would be otherwise if the property in- under the condition, "That, in case of the sured is incumbered or the interest of the assignment of policy, etc., without the insured therein is diverted, and these de-insurer's consent, the policy shall be fenses are also set up. True v. Manhat- void," that clause having exclusive refertan Fire Ins. Co., 14 Ins. L. J. 895; 26 Fed. ence to the policy, and not to the propRep. 83. erty insured. People v. Beigler, Hill & Denio, 133 (N. Y.)

32.- A clause in a policy, forfeiting it if assigned, must be strictly construed, and will be limited to absolute transfer, rather than extended to a deposit of the policy as collateral security. Griffey v. New York Cent. Ins. Co., 1 Cent. Rep. 528; 15 Ins. L. J. 198; 100 N. Y. 417; aff'g, 30 Hun, 299; Mahr v. Bartlett, 53 Hun, 388; 23 Abb. N. C. 436; 7 N. Y. Supp. 143; rev'd on other grounds, 127 N. Y. 452; 21 Ins. L. J. 113.

33.- Where a bank held it as bailee, and not as owner, the prohibition against assignment could not apply; and the policy remains valid to protect the interest of the insured. Authorities cited.

38. A fire insurance policy conditioned to be void if assigned without the assent of the insurer is avoided by an assignment for the benefit of creditors. Dube v. Mascoma M. F. Ins. Co., 6 N. Eng. Rep. 893; 1 L. R. A. 57; 64 N. H. 527; 15 Atl. Rep. 141.

39. Assignment by parol. A sale of the property and delivery of the policy is a valid assignment on a sufficient consideration. Pierce v. Nashua Fire Ins. Co., 50 N. H. 297.

40.- The assured W. H. Greene & Co. were indebted to E. A. Greene, and there was an understanding between them that

When New Contract With Assignee

the latter should have the benefit of 45. When insured property is sold policy in question. After loss latter wrote and the policy is assigned to the purfor the policy, and it was sent to him as chaser with consent of the company, a his property in pursuance of such under- new contract arises which is not affected standing to collect and apply the proceeds by the fraud or acts of the party originupon the indebtedness. At same time as-ally insured. Ellis v. Council Bluffs Ins. sured sent to E. A. Greene an order upon Co., 64 Iowa, 507.

the company to pay the amount of the 46. An assignment of the policy with insurance to the latter. Suit was finally consent of the company knowing at the brought in Mississippi in name of the as- time of facts which might be claimed as a sured to use of E. A. Greene, and judg- violation of the conditions of the insurment was obtained against the company. ance, is in effect a new contract with the Action was brought in New York upon assignee, who takes it unaffected by the the judgment in name of E. A. Greene as forfeiture. Steen v. Niagara Ins. Co., 11 plaintiff. Held, that there was an assign-Ins. L. J. 523; 89 N. Y. 315. ment of policy to plaintiff, and being the owner of the judgment and real party in interest he could maintain action in his own name under provisions of New York Code. Greene v. Republic Ins. Co., 84 N. Y. 572; 10 Ins. L. J. 422.

47.- Where a fire insurance policy provides that if the insured incumbers the property the policy shall be vitiated, and the insured does incumber the property and then sells it, and the company consents to an assignment of the policy, both 41. A policy of fire insurance is the company and the assignee and purcapable of assignment by parol and de-chaser being ignorant of the encumbrance, livery, where there is a valuable consid- the policy is not vitiated, as the sale of eration. Leinkauf v. Calman, 12 Cent. the property and the assignment of the Rep. 777; 17 N. East. Rep. 389; 110 N. Y. policy create a new contract. Ellis v. 50; Greene v. Republic Ins. Co., supra. Insurance Co. of N. A., 32 Fed. Rep. 646. 48. Where the assignment of the in

42.- One who has inherited an interest in an unpaid insurance policy may assignsurance policy goes with the absolute sale such interest verbally. *Macaulay v. of the property, there is a creation of a Central Nat. Bank, 27 S. C. 215; 3 S. E. new contract. Id. Rep. 193.

43.- Possession of an insurance policy is not necessary to the validity of an assignment; and the question of the delivery of the assignment, and its acceptance, is frequently one of intention, depending on the circumstances of the transaction. *Baker v. Crosby, 26 Jones & Sp. 577; mem. 33 N. Y. S. Rep. 757; 11 N. Y. Supp. 575. 44. When new contract with assignee. A partner took a stock of goods for a firm debt, and being uncertain of his absent partner's approval thereof, put them in a different store and had them insured in his own name. The policy required disclosure if the interest of the assured was not absolute. He then sold the whole to one Myers, and assigned the policy to him with the company's consent. Held, this was in effect a new insurance to Myers, and as he acquired an absolute title, the policy was good as to him, being recognized as the assured party, whether it was good or not before the sale to him. City Fire Ins. Co. v. Mark, 45 Ill. 482.

49. A transfer of a policy to another, so as to insure the latter, with loss payable to the assignor as his interest may hereafter appear, makes it a contract of insurance between the company and the assignee, and not between the company and the assignor. Bonenfant v. American F. Ins. Co., 76 Mich. 653; 43 N. W. Rep. 682.

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50. Rights of assignee. An assignment of "all the loss or damage which accrued under the policy prior to" a specified day, passes the whole interest in the policy to the assignee, when it is shown that the loss had accrued, and the policy expired before that day. Perry v. Merchants' Ins. Co., 25 Ala. 355.

51. The assignee's right to sue is not affected by a stipulation in the policy for its renewal, if it had expired without renewal, before the assignment, and the right of renewal was gone with the partial destruction of the property. Id.

52.- Policy issued to Stone, was made "payable in case of a loss to J. S.," who

Rights of Assignee.

consent of the company to the assignment of the policy to the purchaser there was a new and original contract to indemnify him according to the terms of the policy and that the company was liable for the loss on furniture and clothing of the purchaser and assignee. Cummings v. Ins. Co., 55 N. H. 457.

was a mortgagee of the property insured. which was burned. Held, that by the J. S. afterwards, with the consent of insurers, assigned all his interest in the policy to the plaintiff; held, that the contract was still between company and original assured, and not between company and payee; and if the policy was void by acts of original assured, plaintiff could not recover. Hale v. Mechanics' Mut. Fire Ins. Co., 6 Gray, 169 (Mass.) 53.- Where policy has been assigned with the consent of the company, it is no longer in the power of assignor to do anything to impair the validity of the policy in the hands of the assignee. Pollard v. Somersett Mut. Ins. Co., 42 Me. 221.

54.— In an action by the assignee of a policy to recover a loss happening after the assignment, it must affirmatively appear in the complaint that such assignee had an interest in the property insured. Fowler v. New York Indemnity Ins. Co., 26 N. Y. 422.

55.— After an assignment of a policy of insurance with the consent of the insurance company, a non-compliance with the terms of the policy by the assignor, in matters material to the interests of the company, will avoid it as against the assignee. Pupke v. Resolute Fire Ins. Co., 17 Wis. 378.

56.- No act of the party insured, after an assignment of the policy with the assent of the insurers, can impair the rights of the assignee. New England Fire & Marine Ins. Co. v. Wetmore, 32 Ill. 221.

60.- Assignee of insured property, who becomes by consent assignee of the policy and applies for a renewal, is bound only by correctness of the original application so far as it is applicable to the circumstances existing at the time of the renewal. The undertaking or agreement

on his part is simply that the facts stated in the original application are true at the time of the renewal. Chapman v. Gore District Mut. Ins. Co., 26 Up. Can. C. P. 89.

61.- Assignee takes policy subject to its conditions, and if his assignor has lost all right of recovery, he acquires no rights. Home Mut. Ins. Co. v. Hauslein, 60 Ill. 521; s. P. Burger v. Farmer's Mut. Co., 71 Pa. 422; Smith v. Niagara Dist. Ins. Co., 38 Up. Can. Q. B. 570; Kanady v. Gore Dist. Ins. Co., 44 Up. Can. Q. B. 261.

62.- Policies of fire insurance are not assignable at law without the consent of the insurer, nor in equity can an assignment be ever made to enure to the benefit of the assignee where there is violation of any condition of the policy by such as57.- Arson by the assured defeats re-signment. Jecko v. St. Louis F. & M. covery for the one to whom a part inter- Ins. Co., 7 Mo. App. 308.

est in the policy had been previously 63.— If, when policy is issued, the asassigned with the company's assent, the sured has no insurable interest, he can assured retaining a part interest. Chisholm v. Provincial Ins. Co., 20 Up. Can. C. P. 11.

58.- Company remains liable to assignee of claim if it pays to assured after notice of the assignment. Hall v. Dorchester Mut. Fire Ins. Co., 111 Mass. 53.

confer no rights upon an assignee by an assignment. McCluskey v. Providence Ins. Co., 126 Mass. 306.

64.- A delivery of a warehouse receipt to a party advancing money on grain, is sufficient to transfer the title to latter and the interest thereby acquired, company having consented to an assignment of the policy, is sufficient to sustain the right to recover the insurance by the assignee. Hoyt v. Hartford Ins. Co., 26 Hun, 416; aff'd, 96 N. Y. 650.

59.- Policy covered a certain amount on dwelling house and on furniture and clothing therein. Property was sold by the assured to another and the policy assigned to the purchaser with consent of the company. The furniture and clothing belonging to the assured were not sold, but were removed. The purchaser put in the house his own furniture and clothing|tain action upon it. Eastman v. Carroll

65.- Company's consent to an assignment of a void policy, does not revive it in hands of the assignee, who can not main

Effect of Making Loss Payable to Third Party.

County Ins. Co., 45 Me. 307. It should be noted that this case does not decide what would be the effect of such consent, with knowledge, operating as a waiver or estoppel.

66.- When a policy has been assigned, the assignment approved and policy confirmed, in an action in the name of the assignee against the company for loss, it can make the same defenses as in a suit brought by assured. Reed v. Windsor, etc., Ins. Co., 54 Vt. 413.

clause attached to the policy, especially after the mortgagee's interest therein has been extinguished by payment, and where the policy provides for subrogation to the mortgagee's rights on payment of the insurance to him. *Lett v. Guardian Ins. Co., 52 Hun, 570; 24 N. Y. S. Rep. 658; 5 N. Y. Supp. 526; aff'd, 125 N. Y. 82; 20 Ins. L. J. 176; and see to same effect Dircks v. German Ins. Co., 34 Mo. App. 31; Hazzard v. Canada Agricultural Ins. Co., 39 Up. Can. Q. B. 419.

67.- Assignee to whom policy is transferred with consent of the company, must either own the property insured or hold it in trust or on commission or sold but not delivered, if so described, if such property is really owned by a third party, who has purchased it with funds ad-30; 19 Ins. L. J. 57; 22 N. East. Rep. 78. vanced by the assignee of the policy, latter can not recover the insurance. First National Bank v. Lancashire Ins. Co., 14 Ins. L. J. 278; 62 Tex. 461.

73.— A purchaser of property insured, to whom the policy is assigned with the consent of the insurer, is not affected by a forfeiture of the policy occurring previous to the assignment. *Continental Ins. Co. v. Munns, 5 L. R. A. 430; 120 Ind.

68.- An assignee of a fire policy may sue on it in his own name, though he has no legal title to the goods. Home Protection, etc., v. Caldwell, 85 Ala. 607.

74. An assignment of a policy containing a condition that it shall be void if assigned on a sale of the insured property, unless the assignment is approved by the company, will preclude a recovery by the assignee, where such consent was not procured and the condition was never waived. *Cascade F. & M. Ins. Co. v. Journal Pub. Co., 1 Wash. 452; 20 Ins. L. J. 395;

69.- Assignee of policy with consent of the company, takes it subject to for-25 Pac. Rep. 331.

feiture on ground of an existing encum- 75. The assignee of an insurance brance; company's consent and receipt of premium do not operate as a waiver unless encumbrance is known. Ellis v. State Ins. Co., 15 Ins. L. J. 481; 68 Iowa, 578.

70. A policy will not be avoided by a mortgage executed in violation of its terms, which was paid off on the day of assigning the policy, upon which the consent of the company to the assignment was indorsed. Kimball v. Monarch Ins. Co., 70 Iowa, 513.

71. It is beyond the power of a person who has assigned a fire insurance policy to bind the assignees by any agreement with the company as to the amount which should be accepted as a satisfaction of its liability, unless he has special authority to make such agreement. American C. Ins. Co. v. Sweetser, 19 N. East. Rep. 159; 116 Ind. 370.

72. The owner of insured property, whose right to recover on an insurance policy is lost by reason of a breach of its condition, cannot recover thereon as the assignee of a mortgagee under a mortgage

policy takes only an equitable assignment, and acquires no greater rights than his assignor. *Wilson v. Hakes, 36 Ill. App. 539.

75a. After a transfer of the title to property covered, the insured can pass no right to an assignee by a mere assignment of the policy. In such a case the assignee cannot rely upon a statement of an agent that consent by the insurance company to transfer, etc., would be indorsed. *New v. German Ins. Co., 21 Ins. L. J. 754; 31 N. East. Rep. 475 (Ind.)

76. Effect of making loss payable to third party. H. obtained an insurance from the defendants upon property owned by him, the policy stating that the loss, if any, should be “payable to F. as collateral." H. was indebted to F. at the time. Held, that the agreement that F. should receive the money, in case of a loss, was only collateral to, and dependent upon, the original undertaking, that after a loss had occurred, and not before, the money should be paid over to F. and not an assignment of the policy before any

Effect of Indorsement "to Benefit of Third Party "-Mortgagor and Mortgagee.

loss. That the facts presented did not 80. Effect of indorsement "to beneshow an assignment before loss, to a party fit of third party.” Owner of property who had no interest in the property, having sold it to plaintiff, wrote on back within the principle of the cases, but a of policy an assignment and sent it by his case where the relation of insurer and in- son to a former agent of the company, sured existed between the defendant and whose authority had been revoked, and H., the owner of the property, until a loss the son was so notified. He, however, had taken place, when F., as appointee of subscribed what had been written on the the insured, stepped in and claimed under policy: This policy to enure to the benethe agreement that the insurer should fit of C. S. Buchanan. A. T. Holmes, pay the money to him. Frink v. Hamp-agent." And it was thus returned plaintiff. den Ins. Co, 45 Barb. 384 (N. Y.)

83.- If a policy of insurance has been as Gould v. Dwelling House Ins. Co., 134 assigned to a mortgagee of the insured Pa. 570.