Opinion
03-14-1889
MILLER v. HILLSBOROUGH MUT. FIRE ASS'N.
G. S. Grovesnor, for complainant. J. D Bartine, for defendant.
G. S. Grovesnor, for complainant. J. D Bartine, for defendant.
BIRD, V. C. An action of law is pending upon an insurance policy held by the complainant. The defendant, having issued the policy, set up in one of its pleas that the house which was burned was not occupied at the time, and that that was in violation of one of the conditions of the by-laws of the company. There were a large number of conditions annexed to the policy, but the one in question was not; nor had the complainant any knowledge of this one, although his assignor had such knowledge. The aim of the bill is to have the defendant company restrained from offering any evidence under said plea in the said action at law. But the defendant insists that, Rea having had full knowledge of the said law, such knowledge is imputable to his assignee, Miller, as fully as though the condition had been set forth among the other conditions annexed to the policy. I think that, if the opinion pronounced by Mr. Justice VAN SYCKEL in the court of errors, (44 N. J. Eq. 224, 14 Atl. Rep. 278,) when this case was there for consideration upon demurrer, is attentively considered, it will appear very clearly that it was declared by that tribunal that, when an insurance company, though a mutual, offers to insure with a certain set of conditions annexed to its policy, and such offer and conditions are accepted, it cannot afterwards insist upon other or additional conditions of which the insured had no knowledge, detrimental to the insured, although at the time the said additional conditions may have been annexed to or incorporated into the by-laws; and I think that it will also further clearly appear that the court means to be understood as holding that, whether the person originally insured has knowledge or not, the person to whom he may assign such policy takes it free from such additional conditions, provided he has no notice thereof at the time of his taking such assignment. And yet the chief, if not the only, ground of defense upon final hearing, is that Rea, the person to whom the policy was first issued, had notice of the condition which the company now seeks to set up in the action at law as a protection, and that notice to him is enough to justify a court of equity in charging his assignee, Miller, with knowledge. While it is true that the general doctrine is that the assignee takes subject to all the rights and equities which exist between the original parties, there is clearly no room for doubt but that the court of last resort in this state has held that in this case implication arising from facts not expressed in the contract between the company and Rea did not extend to or prevail between the company and the assignee of Rea; because Miller had a right to believe that all of the conditions which could bind him were annexed to the policy, and, as the company had issued such policy with the power to assign it, the assignee would take it free from any latent or secret equity. And I think that this view of the case may also be considered as fairly within the cases of Woodruff v. Depue, 14 N. J. Eq. 168, and the cases therein referred to; followed in De Witt v. Van Sickle, 29 N. J. Eq. 211; Traphagen v. Hand, 36 N. J. Eq. 384; Sprague v. Drew, 6 Atl. Rep. 307. I only refer to these cases, showing that the rule has been long established, because counsel for the company seemed impressed with the conviction that, as the case now stands on the proof, the plain direction of the court of errors does not reach the case; whereas, I think, as above expressed, that it not only does, but that there is abundant authority to sustain that view, with all of the evidence now in. I think the injunction should be made perpetual. The complainant is entitled to costs.