Tuckerman v. Bigler

The note upon which this action is brought expresses upon its face that it was given for value received in policy Ko. 498 dated September 5, 1857, issued by the Kew York Central Insurance Company, and it is expressly proved that such policy constituted the only consideration for said note.

It was proved on the trial that in an action brought by ■the defendants against said insurance company to recover for a loss by fire, sustained by the destruction of the buildings covered by said policy, the said insurance company defended upon the ground that the defendants in this action did, on the 30th of January, 1852, procure from another insurance company a policy of insurance upon the same property insured by said policy 498, and of which they did not give notice to the said Kew York Central Insurance. Company, nor was the same indorsed on said policy of the last mentioned company; that such defense was sustained, and the said last mentioned insurance company recovered final judgment in said action against these defendants, upon the ground aforesaid.

The judgment was in legal effect an express adjudication between the said insurance company and these defendants that the said policy of insurance Ko. 498, mentioned in the note, was void and of no force after the said 30th day of January, 1852, and was expressly avoided hy the election of the said insurance company, as from that date. The election of the insurance company to declare said policy void, for this cause, and upon the ground aforesaid, must relate to the *378time (January 30, 1852,) when the act was. committed which gave such right of election to said company. After that date the pompany, by its own election, had put an end to said policy. It was not, therefore, liable for any loss by fire of the buildings covered by said policy. The relation of insurer and assured no longer existed between the parties, and the defendants ceased to be members of said Company. The policy thereupon ceased to be any consideration for said note, and the consideration thereafter utterly failed. After such effect had been accomplished, after the said insurance company had by its own voluntary act and election thus put an end to said policy and disclaimed all further liability upon the same to the defendants, it is difficult to see upon what principle it can be maintained that the defendants remained liable upon said insurance note for further losses sustained by the company. The election of .the insurance company to. avoid the policy, for the cause assigned, is, I think, equivalent, in legal effect, to a voluntary rescisión of the contract of insurance between' the parties, and restores both parties to their original rights and position, as before the issuing of the policy and the giving of the note.' Both are void and of no further legal effect. The defendants, I think) would be liable for losses incurred while the piolicy was in full force and valid, and no longer. The moment the policy became void,"the note also became void for want of consideration, in respect to all future risks and losses, by the company. It follows .that the judgment rendered by the referee is erroneous and must be reversed.

Judgment reversed.

Welles, B. Darwin Smith and ■J&Jmsan, Justices.]