California State Bank v. Hamburg-Bremen Insurance

Appeal from a judgment of the Superior Court of Sacramento County, and from an order refusing a new trial.

In October, 1883, S. Lachman, being the owner of a certain winery, and its contents, consisting of machinery, cooperage, etc., caused the same to be insured in his own name, against loss by fire, in the sum of ten thousand dollars. Six thousand dollars of the insurance was on the building, and four thousand dollars on the movable chattels, and on this basis the whole amount was divided among several companies, including' the defendant, whose policy covered about one third of the whole risk. During the term of the insurance, on the 7th of May, 1884, Lachman sold and conveyed the whole of the insured property, both real and personal, to one M. S. Nevis, for the sum of seven thousand five hundred dollars, receiving in payment a check for three thousand five hundred dollars, which was paid, and the note of Nevis for the balance. Immediately upon the completion of the transfer, Lachman delivered the policies of insurance to Nevis, who on the same day procured an indorsement to be made on each of the policies by the respective companies, to the effect that the loss, if any, should be paid to the plaintiff. At the time of its indorsement, the defendant had no notice of any sale from Lachman to Nevis. The policy in question contained a provision that it should become void upon any sale and conveyance of the insured property, and could only be revived by an assignment to the vendee; and that no such assignment could be made before a loss without the written consent of the defendant indorsed on the policy. Printed on the back of the policy was a notice, to which the attention of the insured and all concerned was particularly directed, containing forms for assignment and consent to assignment, and a statement that the policy was not assignable for the purpose of collateral security, but in all such cases was to be made “payable in case of loss,” etc., by declaration on its face. The loss, to recover for which the action was brought, occurred on the night following the sale. The further facts are stated in the opinion of the court.