CHAPTER III. OF THE ASSIGNMENT AND NEGOTIABILITY OF POLICIES OF INSURANCE. POLICIES of insurance are not negotiable instruments, either in England or in this country, but they may, like choses in action, generally be assigned so as to give the assignee the right of instituting a suit in the name of the assignor. And if the policy be assigned, although without notice to the underwriters, the assignment vests an equitable interest in the assignee.2 But in such a case the general rule, changed by statute in some of our States, is, that the action must be brought in the name of the assignors.3 1 Fogg v. Middlesex Mut. F. Ins. Co., 10 Cush. 337, 345; Folsom v. Belknap Co. Mut. F. Ins. Co., 10 Foster, 231; Hobbs v. Memphis Ins. Co., 1 Sneed, 444, 450. By the law of France, a policy may be made negotiable by the loss being made payable to order, or to bearer. Emerigon, c. 18, § 2, ed. 1783, p. 249, 250; 2 Valin, 45; Alauzet, vol. 1, 360; 2 Id. 135. But it may be doubted whether in England, or in this country (excepting those States in which the common law is changed by statutory provisions in this respect), an assignee of such a policy could maintain an action upon it in his own name. A bill of lading "to order or assigns" is not such a negotiable instrument. Thompson v. Dominy, 14 M. & W. 402; Howard v. Shepherd, 9 C. B. 297; Sanders v. Vanzeller, 4 Q. B. 260; Tindal v. Taylor, 4 Ellis & B. 219, 28 Eng. L. & Eq. 210; Dows v. Cobb, 12 Barb. 310; and a policy of insurance would doubtless be governed by the same rules of law. See also Skinner v. Somes, 14 Mass. 107. Spring v. South Carolina Ins. Co., 8 3 Earl v. Shaw, 1 Johns. Cas. 313; Gourdon v. Ins. Co. of N. A., 3 Yeates, 327, 1 Binn. 430, n. In Jessel v. Williamsburg Ins. Co., 3 Hill, 88, the insured assigned his interest in the subjectmatter with the assent of the underwriters, but did not assign the policy. The policy contained the usual clause that the interest of the insured should not be assigned without the consent of the corporation. The assignee sued in his own name. The court held, that the action should have been brought in the name of the assignor, and the plaintiff, therefore, was nonsuited. The court said: "We know of no principle upon which the assignee of a policy of insurance can be allowed to sue upon it in his own name. The general rule applicable to personal contracts is, that, if assigned, the action for a breach must be brought in the name of the assignor, except where the defendant has expressly promised the assignee to respond to him." See also Folsom v. Belknap Co. 2 Wakefield v. Martin, 3 Mass. 558; Mut. F. Ins. Co., 10 Foster, 231; Pol The right of the assignee, though said to be only equitable, is enforced at law; and, indeed, the assignee will not be permitted to proceed in equity, unless there are especial reasons for his so doing. And it is not a sufficient reason that the action must be brought in the name of the assignor. A parol agreement, together with delivery, will constitute a sufficient assignment of the policy. Generally the assignor of a chose in action cannot prejudice the rights of the assignee after the debtor has assented to the assignment. But where the owner of property mortgaged effects insurance in his own name, "loss, if any, payable to the mortgagee," or assigns the policy to the mortgagee with the assent of the insurer, the insurance is upon the interest of the mortgagor, and he does not cease to be a party to the original contract with the insurers, and any act of his which would otherwise render the policy void will have this effect, although the policy is in the hands of the mortgagee. But if the insurers, at lard v. Somerset Mut. F. Ins. Co., 42 Maine, 221. 1 Motteux v. London Ass. Co., 1 Atk. 545; Dhegetoft v. London Ass. Co., Mosely, 83, nom. De Ghettoff v. London Ass. Co., 4 Brown, P. C. 436; Hammond v. Messenger, 9 Sim. 327; Carter v. United Ins. Co., 1 Johns. Ch. 463; Ontario Bank v. Mumford, 2 Barb. Ch. 596; 1 Parsons on Contracts, 193, B. (f). * Powles v. Innes, 11 M. & W. 10, 12, per Parke, B.; Wells v. Archer, 10 S. & R. 412. Hackett v. Martin, 8 Greenl. 77; Hatch v. Dennis, 1 Fairf. 244; Matthews v. Houghton, Id. 420; Frear v. Evertson, 20 Johns. 142. Hale v. Mechanics' Mut. F. Ins. Co., 6 Gray, 169; Bowditch Mut. Ins. Co. v. Winslow, 8 Gray, 38; Loring v. Manuf. Ins. Co., 8 Gray, 28; Edes v. Hamilton Ins. Co., 3 Allen, 362; State Mut. Ins. Co. v. Roberts, 7 Am. L. Reg. 229; Bidwell v. Northwestern Ins. Co., 19 N. Y. 179; Grosvenor v. Atlantic Fire Ins. Co., 17 N. Y. 391. This case overrules Traders' Ins. Co. v. Robert, 9 Wend. し the time of their assent to the transfer of the policy, impose any further obligations on the transferee, this may be evidence of a new contract with him, and then the acts of the mortgagor cannot affect his rights as transferee.1 Courts are inclined, for obvious reasons, to go very far in giving to a transferee a right of action as on his own interest. We cannot but think, however, that they have construed the rules of the common law in regard to assignment very liberally, for this purpose.2 It is a well-settled rule of law that the assignee of a chose in action stands in the place of his assignor. He is liable to have set up against his claim all demands due from the assignor to the original promisor at the time of the assignment, but not subsequent ones. And after the assignment, the assignor is treated as having nothing to do with the contract, except that the action must generally be brought in his name. Notice of the assignment must be given to the original promisor.3 to exist, was nevertheless going as far as the rules of law will permit, in order to sustain a claim for loss under a policy which has been assigned by the original assured." If notice is given of the assignment, and the insurers consent, 1 Foster v. Equitable M. F. Ins. Co., 2 Gray, 216. In this case the insurers required, at the time of their assent to the assignment, an agreement of the mortgagee to pay all assessments which should be made against the policy, and that the policy should be subject to the same lien for the payment of assessments as before. The court, per Bigelow, J., said: "The legal effect of this transaction was to create a new, substantive, and distinct contract of insurance with the plaintiffs. They had a separate interest, as mortgagees, to be protected by the policy. For a new and independent consideration, the defendants agreed to insure this interest to the plaintiffs, and thereby the parties assumed toward each other the relation of insurer and insured." * In Edes v. Hamilton Ins. Co., 3 Allen, 362, Bigelow, C. J., speaking of Foster v. Equitable M. F. Ins. Co., cited in the preceding note, said: "The decision in that case, although fully warranted by the peculiar facts which were there shown * Comstock v. Farnum, 2 Mass. 96; Wood v. Partridge, 11 Id. 488; Jones v. Witter, 13 Id. 304; Jenkins v. Brewster, 14 Id. 291; Sweet v. Green, 4 Greenl. 384; Hackett v. Martin, 8 Id. 77; Bartlett v. Pearson, 29 Maine, 9; Sanborn v. Little, 3 N. H. 539; Dunclee v. Greenfield Steam Mill Co., 3 Foster, 245; Raymond v. Squire, 11 Johns. 47; Anderson v. Van Alen, 12 Id. 343; Briggs v. Dorr, 19 Id. 95; Johnson v. Bloodgood, 1 Johns. Cas. 51; Andrews v. Beecker, Id. 411; Wood v. Perry, 1 Barb. 114, 131; Murray v. Lylburn, 2 Johns. Ch. 441; Guerry v. Perryman, 6 Ga. 119; Norton v. Rose, 2 Wash. Va. 233. These principles are applicable to the contract of insurance. Rousset v. Ins. Co. of N. A., 1 Binn. 429; Gourdon v. Ins. Co. of N. A., 3 Yeates, 327, 1 Binn. 430, n. and give no notice to the assignee of existing claims held by them against the assignor, this, on general principles, should be held as a waiver of such claims.1 If a person, acting in behalf of the owners of a vessel, effects insurance upon it in his own name on account of whom it may concern, and the policy is afterwards assigned, the assignee will take subject to such rights as existed between the owners and the underwriters.2 In these cases of the assignment of the policy, 1 Mowry v. Todd, 12 Mass. 281, 283; King v. Fowler, 16 Id. 397; Henry v. Brown, 19 Johns. 49; Merrill v. Merrill, 3 Greenl. 463; Stiles v. Farrar, 18 Vt. 444; Wiggin v. Damrell, 4 N. H. 69; Thompson v. Emery, 7 Foster, 269. See also Phillips v. Merrimack Mut. F. Ins. Co., 10 Cush. 350, 354. In Gourdon v. Ins. Co. of N. A., 3 Yeates, 327, 1 Binn. 430, n., there was some evidence that notice of the assignment had been given to the insurers, and that they had assented thereto. Shippen, C. J., charged the jury as follows: "I take it to be likewise incumbent on the assignee of a policy to call upon the underwriter, and inform him before any account of a loss, and to know if he has anything to set off against the policy, in case a loss should happen. If the underwriter had this notice, and either makes no objection or claim, or is totally silent as to any claim, I should consider the assignee of the policy in the same condition as the assignee of a bond under the same circumstances, and that both are entitled to recover, notwithstanding the underwriter on the policy, or the obligor in the bond, should afterwards discover that they had a counter demand, and that their mouths are stopped by their acquiescence or silence, otherwise in both cases it would lead to a deception." But in Mangles v. Dixon, 3 H. L. Cas. 702, 18 Eng. L. & Eq. 82, it was held to be the duty of the assignee of a chose in action to inquire as to the equities aris ing upon it, and that the creator of the security was not bound on receiving a simple notice of the assignment to volunteer information, unless the note disclosed, on its face, that which should induce the belief that the assignee had been deceived in accepting the assignment. In Wiggin v. American Ins. Co., 18 Pick. 158, the policy contained the following clause: "In case of loss, such loss shall be paid in sixty days after proof and adjustment thereof, the amount of the premium note, if unpaid, and all sums due to the company from the insured when such loss becomes due, being first deducted." The policy was assigned with the consent of the company, "reserving their rights expressed in the policy." This clause was held to give the company the right to deduct all claims due from the assignors, whether prior or subsequent to the assignment. But in the case of Wiggin v. Suffolk Ins. Co., 18 Pick. 145, it appearing that, by virtue of two policies made prior to the assignment, there was a loss due from the company to the assignors, the court held, that, as the company had a right, on the liquidation of those losses, to deduct all premium notes due to the of fice, as well those afterwards as those previously made, the company could only claim from the assignees the balance remaining, if any, after such deduction. See also ante, p. 49, n. 1. 2 Waters v. Allen, 5 Hill, 421. the interest in the property insured remains in the original assured. The policy may, however, be made assignable with the subject of insurance; as when the loss is made payable to the insured," or any other person who may be the owner at the time of the loss." In this case, a transfer of the property, and of the policy, gives the transferee all the rights of the party originally insured.1 The mere assignment, however, or sale of the property insured, gives no right to the assignee or purchaser to sue the insured for a subsequent loss of the property, but it will suffice to destroy the claim of the original insured, and thus wholly discharge the insurer. It is quite certain, both in England and the United States, that a common policy of insurance does not go to the assignee of the property insured, as an incident of the property, or in any way attached to it.2 Emerigon states the law to be otherwise in France. We consider it equally certain now that the original assured loses all interest in the policy, by such an assignment or transfer of the subject of insurance as takes from him all interest therein before a loss occurs. A question, however, has been made, whether, if an assured makes an assignment of the property insured, and therewith of the policy, and a loss subsequently occurs, the assignee has not acquired the right of the assured, and may not bring an action on the policy in the name of the assured, but for his own benefit. In the principal case, or at least the earliest in which an opinion to this effect is expressed, it was a mere obitum dictum. Far more than its due weight was given to this opinion, 1 Rogers v. Traders' Ins. Co., 6 Paige, Ch. 583. Powles v. Innes, 11 M. & W. 10. See also Godin v. London Assur. Co., 1 Burr. 489; Fogg v. Middlesex Mut. F. Ins. Co., 10 Cush. 337, 345; Tate v. Citizens' Mut. F. Ins. Co., 13 Gray, 79; King v. Preston, 11 La. Ann. 95. 3 Emerigon, c. 16, § 3. Tindal, C. J., in the case of Sparkes v. Marshall, 2 Bing. N. C. 774, 3 Scott, 172, the facts of which it is unnecessary to state, says: "If the plaintiff had an insurable interest at the time the policy was effected, whatever change may have taken place in the property in the oats since can have no effect in relieving the underwriters from their liability, as the plaintiff may sue on the policy for the benefit of the party to whom such property has passed. . . . . We are not aware of any principle on which a change in the interest, after the policy is effected, much less after the loss has happened, can be set up as an answer by the underwriters against a claim for such loss." This expression of opinion was entirely unnecessary to the decision of the case. In fact, there had been no transfer or change in the property at 4 |