Opinion
Submitted May 3, 1888
Decided June 5, 1888
Stine Calman for appellants.
William Man for respondent.
The appellants opposed the plaintiff's right to recover the moneys in the insurance agent's hands, which represented the balance of the sum at which the loss under the policy was adjusted, on several grounds, but there are only two which are material to be considered here. They say that the policy of insurance and the assignment thereof were not sufficiently proved, and that the mortgage to plaintiff was void for defective execution.
As to the first of these grounds of objection to the recovery, we think the appellants have misapprehended their situation in the matter, relatively to the plaintiff's claim upon the insurance company.
The agreement between the plaintiff and the Mobile Furniture Manufacturing Company was that the repayment of the loan to them was to be secured by a mortgage of their personal property and by the transfer of a policy of insurance, insuring that property, or portions of it, against loss by fire. The policy was not collateral to the mortgage, but was collateral to the note promising to repay the loan. When the plaintiff made his claim upon the insurance company under the policy, which had been delivered to and retained by him, pursuant to the agreement I have mentioned, the insurers recognized it and transmitted the sum, at which the loss was adjusted, to their agents in New York for payment. If the insurance company recognized their liability under the policy and the right of the plaintiff to claim for the amount of the loss, it does not lie in the defendants' mouths to resist that right of the plaintiff, if, prior to their attachment, plaintiff's title had attached to the moneys. We think the policy was not material to be proved, inasmuch as its existence as a liability of the company had been admitted by it by the adjustment of the loss and the remittance of the moneys. The policy was surrendered then and forwarded to the home office in France, as the voucher for the payment of the amount of the loss. The witness merely proved the fact that there was such a policy issued by the La Confiance Company to the Mobile, etc., Company, which had come to his possession as agent, and had been sent to France, upon payment of the loss, and that there was noted on the policy an assignment to the plaintiff.
The referee's finding that the policy was procured and delivered to the plaintiff when the loan was made, was supported by the evidence, and that plaintiff held the policy until the fire occurred and the loss was adjusted. It was admitted that the policy contained the usual clause against assignments. But this clause in policies is for the benefit of the insurance company, and if they do not object to the assignment, the defendants certainly are not in a position to do so, as it is not a provision which would enure to their benefit. The proof shows that the policy belonged to plaintiff, and was held by him as a collateral security for repayment of the loan, and, under the authorities, as a chose in action, it was capable of being assigned by parol and a delivery, where there was a valuable consideration. ( Hooker v. Eagle Bank, 30 N.Y. 83-87; Greene v. Republic, etc., Ins. Co., 84 id. 572.)
As to the second ground of defendants' objections which I have noted, that the mortgage to plaintiff was void, I do not think that question affects the plaintiff's right of recovery. The point taken is that it was not acknowledged or verified in any way, and that it was not a valid obligation of the Mobile, etc., Company.
The proof shows that the mortgage was signed and sealed by certain individuals representing themselves as the president and directors. It purported, by its terms, to be the act of the company through its president and directors, under power and authority given to those officers by the stockholders, at a meeting previously held, where a resolution authorizing its execution for the purpose of borrowing the moneys in question from plaintiff had been adopted.
It is not necessary for us to decide in respect of this instrument further than that it represented a promise or agreement of the corporation, within the scope of its legitimate purposes, through its officers, and must be considered as a valid contract, though not bearing its corporate seal. It was a memorandum in writing evidencing a corporate act and making the corporation liable to the plaintiff, and it is not for the defendants to object to irregularities or defects of execution. The doctrine that no corporate act can be binding without being in writing, or under the corporate seal, has long ceased to be maintained. (Angell Ames on Corp. § 231; Danforth v. Schoharie Turnpike Co., 12 Johns. 227; Trustees of St. Mary's Church v. Cagger, 6 Barb. 576; Moss v. Averell, 10 N.Y. 449, 454.) But a sufficient answer to the appellants' argument is that the plaintiff's right to the policy or to its proceeds did not depend on the mortgage. Though the mortgage contained the agreement of the company to keep its property insured against loss by fire for the plaintiff's benefit, it did not affect the policy itself as an additional collateral security available to plaintiff. The clause was nothing more than the promise of the company expressed in the instrument to provide further for plaintiff's security in loaning money to them. The learned referee disposed rightly of the case and his opinion covered all the points made by the defendants in such wise as to make further notice of them by us unnecessary.
The judgment and order appealed from should be affirmed.
All concur.
Judgment affirmed.