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Reports of cases adjudged in the Supreme court of Pennsylvania, in the Eastern district [Dec. term, 1835 - Mar. term, 1841] (Volume 6) online

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of, goods by a sheriff, by virtue of an execution against the in-
sured, affects the right of the insured to recover for a loss by fire
happening after such levy, and before a sheriffs sale ? That the
sheriff has a special property, for certain purposes, is clear ; he may

491 SUPREME COURT [March Tern,

[Franklin Fire Ins. Co. . Findlay.]

maintain trover or trespass for the goods against a wrongdoer,
because he is answerable to the plaintiff in the execution for them.
This, however, is not enough to sustain the defendants ; it may be
conceded, and yet the insured retain certain rights also ; he may
pay the debt and resume possession. That the right of a defendant
in an execution to the goods levied upon, is not entirely divested
before actual sale, is manifest from the familiar case of a reversal
of the judgment ; if reversed before sale, the goods are restored,
and he holds as by his original title ; if reversed after sale, he
obtains restitution of the money, the goods having passed to the
sheriff's vendee. Again, if the mere levy divests the whole interest
of a defendant, who is insured a levy of $1000 on goods worth
$10,000 may do manifest injustice. Again, it js conceded all round,
that in case of loss by fire after levy and before sale, the plaintiff's
debt is not extinguished nor decreased ; nor is the sheriff the suf-
ferer, unless he be in actual default. If, then, the insured is to be
held deprived of his goods, and his insurance, and his debt not
extinguished, the Insurance Company is the only gainer : the
debt remains, the goods are destroyed, and the insurance is lost.
The cessation of risk alluded to in the policy may well apply to
many cases, such as retiring from business, removing to another
store, &c. Before establishing such a principle, great caution must
be exercised. Whether a sheriff after levy can insure, or whether
execution creditors can insure, are not material questions in this
suit. Admitting that they may insure, yet they are not bound to
do so. The sheriff loses nothing by omitting to do so, excepting
his commissions in case there are no other goods : the execution
creditor loses nothing by way of extinguishment of his debt ; that
remains, and he only suffers in case no other property can be found.
But certainly neither sheriff nor execution creditor is bound to
insure. On the other hand, it is said that if the insurance continues
after levy, it ought to be for the creditors. Perhaps it ought, but
*4921 should not the *contract be made so ? The creditor, how-
- ever, does not lose his debt by the fire ; the debt continues
unaffected ; and I know of no mode by which creditors can reach
the insurance companies, except by making an indebtedness to
the party insured, and then using some process of attachment. No
mode, however, has been suggested by counsel. As the sheriff can-
not avail himself of the policy, nor the creditor, the underwriter
must go clear, unless the defendant in the execution has the right
to recover. And as he remains liable to hiscreditot on the judg-
ment, there is little hardship in this, certainly none to the company,
as they are made to pay but once; nor to the creditor, if his debtor
be put in possession of funds : at least his chance of payment is
more improved than if his debtor suffered a total loss of both goods
and insurance. If the court in which suit is brought had power to


[Franklin Fire Ins Co. v. Findlay.J

impound the money recovered, and pay it to the execution creditor,
all difficulty would be obviated ; but the court has no such power,
and we cannot escape from the difficulty in that way. Many other
observations might be made, and I have thrown out these to show
that the point is a fruitful one, and requires grave consideration.
For the present, yielding to the actual inclination of my judgment
(but reserving the point for a future mature consideration), and to
enable the jury to decide on the merits of the cause, I hold that the
levy, and subsequent acts of the sheriff, do not present a defence
in law, in this case. The second question raised relates to the
alleged increase of risk. It is contended by the defendants, that
the change of possession and all the circumstances of the levy, and
the conduct of the sheriff so increased the risk as to vitiate the
policy. The contract must be construed in reference to mutual good
faith between the parties to it. If a levy, and possession by a sheriff
are not per se enough to vitiate it, and I have ruled that they are
not, the defendants must be presumed to have contemplated such
an event as an incident of property ; in other words, an underwriter
engages to encounter the ordinary incidents to which property is
legally liable. On the other hand, the insured is bound in good
faith to see that no act of his or by his procurement, shall involve
the property in risks not usually and legally incident to it. If
the conduct of the sheriff is so plainly unusual and irregular, as to
endanger the property, and increase the risk beyond the ordinary
effect of a levy, the underwriter can make it matter of defence.
Here, however, the plaintiff alleges, first, that there was nothing
improper in the acts of the sheriff; that everything was done by
him that ought to have been done ; and that during the custody
of the law the property was really safer from fire than before ; and
secondly, that the fire was altogether independent of the circum-
stances of the levy. You will apply the legal principle I have stated to
the facts in proof. If, then, you think there was not such an increase
of risk in fact as to vitiate the policy, the concluding question is pre-
sented, as to estimating the loss. The contract is one of indemnity ;
it is that fully and fairly ; *and to be so interpreted for both r*4qo
parties ; it is no more ; it is no less. The language of the policy I
is, that the insured 'shall within thirty days after certain proofs made
furnish the insured with a like quantity of any or all of the said
goods, and of the same quality, or make good the damage or loss by
paying therefor.' The contract refers to thirty days after proofs
furnished ; here, to thirty days after October 28, 1831 : and it
also clearly has reference to the place in which the goods were lost.
And as, in this case the company did not furnish the insured with
a like stock, the only rule to be observed is, to ascertain what sum
of money would, if paid to the insured at Florence, Alabama,
within thirty days from October 28, 1831, have been equivalent to

493 SUPKEME COURT [March Term,

[Franklin Fire Ins. Co. v. Findlay.]

the damage or loss sustained ; or what sum of money would have
enabled him to have purchased a similar stock and thus reinstated
himself. All notions of prospective profits to be earned in a year
or two, by skill, labor and time, are excluded and inadmissible ;
they might have been the subject of insurance, but by a different form
of contract. The next estimate furnished by the plaintiff is the
amount of the inventory of the plaintiff, and an appraisement made
since the fire, predicated on the cost at Philadelphia, with 10 per
cent, carriage, and interest thereon. A third mode of estimating
the loss is founded on the testimony of Mr. Lindsay, and insisted
on by the plaintiff, viz., a new stock, selected at Philadelphia,
would sell at Florence for cost, carriage and sixteen and two-thirds
per cent, advance on credit, allowing five per cent, to cover bad
debts. This is what such a stock would bring ; but still leaves the
question unaffected, what could the plaintiff buy for ? The same
intelligent witness says, that at Nashville, the plaintiff could have
replaced his stock at cost, carriage and sixteen and two-thirds
per cent, on Philadelphia prices ; meaning at four to six months
credit at Nashville, and that two to three per cent, would come
off for cash. As to the sheriff's sale, the witness did not think
the stock would have brought first cost in September 1881
money being then very scarce. The same if no market existed
at Florence to buy such a stock, then the market to which resort
is usually had, may be taken into view by the jury, to enable them
to make an estimate; in this way alone, does Nashville, Phila-
delphia, or any place than South Florence become of import-
ance. The jury will exclude the demand of the plaintiff for
the $80 premium ; it is what he paid to enable him to hold the
defendants liable the consideration of the contract ; and surely
if he recovers for a loss, that consideration belongs to the defend-
ant. The question of interest alone remains to be settled. It
must be six per cent, and no more ; the contract was made here,
and the plaintiff must have contemplated our laws at the time, so
far as interest was concerned. If the contract had been made in
Alabama, another rule might prevail; a higher rate of interest being
there allowed."
404*1 *The judge added, that he reserved all the points of law

^ for the consideration of the whole court.
The jury found for the plaintiff $3685.92 ; and the District
Court ordered judgment to be entered on the verdict.

A writ of error was then taken, and the following specifications
of error were filed :

1. That the judge permitted the plaintiff to amend his declaration,
by adding an averment of his interest in the goods destroyed by
fire, after the evidence was closed and after one of the counsel
for the defenant had summed up.


[Franklin Fire Ins. Co. v. Findlay.]

2. That the judge charged the jury that the levy upon the goods
of the plaintiff and the possession thereof by the sheriff at the time
of the fire, did not in law amount to such a change in the property
in the goods as to annul the policy.

3. That the judge charged the jury that the said levy and pos-
session did not constitute a sufficient defence to the claim of the

4. That the judge charged the jury, that to increase the risk so as
to discharge the liability of the defendants, the conduct of the sheriff
must have been unusual and extraordinary.

5. Because the attention of the jury was withdrawn from
the merits of the case, and directed to a wrong point and
one not made on either side in argument, by raising the question
of the conduct of the sheriff whether extraordinary or other-

6. Because the levy and proceedings under the sheriff's levy
varied the risk from that which the parties contemplated at the time
of the insurance, and thus prevented a continuance of the liability
of the defendants ; and that point should have been so decided by
the court.

7. That the court, if it did not decide that the facts given in
evidence, prevented a continuance of the risk assured, should at
least have submitted that circumstance for the decision of the

8. That the judge erred in treating a sheriff's levy, when con-
ducted in the usual manner, as an incident to ownership which
might be regarded as contemplated by an underwriter in effecting

Mr. T. I. Wharton, for the plaintiff in error.

1. The amendment of the declaration ought not to have been
*admitted. It was too late after the counsel had spoken. r=MQr
If the words of the act " on the trial " are supposed to allow it, *-

an amendment ought to be admitted after the charge, and at any
time before the verdict is given.

2. The exceptions to the charge raise a question which is
believed not to have been decided, viz., the effect upon the con-
tract of insurance, of a levy by a sheriff, accompanied with an
actual change of the possession and custody of the goods. We
contend that there was such a change of the property in the goods,
as to avoid the contract. Insurance is a personal contract entered
into on the faith of the insured continuing the owner, and having
an interest to preserve the goods ; and does not follow the goods
into other hands. Lynch v. Dalzell, 4 Br. P. C. 431 ; Sadlers Co.
v. Badcock, 2 Atk. 554 ; Carroll v. Boston Ins. Co., 8 Mass. 515;
Then the authorities show, that by the levy and other proceedings,

495 SUPREME COURT [March Term,

[Franklin Fire Ins. Co. v. Findlay.]

the property was changed. Watson on Sheriff 175, and the cases
there cited. Rorke v. Dayrell, 4 Term Rep. 402 ; Payne v. Drew,
4 East 522 ; Fontaine v. Phoenix Ins. Co., 11 Johns. 293. It will
he said that the sheriff has only a special or qualified property in
the goods ; but the answer is, that such a change of property alters
the contract ; as it makes the property, if any remains in the
insured, different from what it was. The provision for "assigns"
in the policy, does not extend to the sheriff. Platt on Covenants
525. At all events, there was a change of possession which in-
creased the risk. It is like a deviation in marine insurances,
which is said to comprehend " every act of the assured or his agents
which without necessity or just cause increases or changes the risks
included in the policy." 1 Phillips on Ins. 179, 181. The differ-
ence between the possession of goods by the owner and a stranger
is very material. The evidence shows that here was an actual
increase of the risk by the conduct of the sheriff, who nailed up
the windows and went out of town with the key. If he had removed
the goods, there would certainly have been an end of the contract.
How does it alter the case, that they were impounded on the
premises ? Roget v. Thurston, 2 Johns. Cas. 248. Besides, if any
one is entitled to recover for the loss of these goods, it is the sheriff,
for the benefit of the execution creditors. The title of Findlay
was at least suspended, until he had paid the execution creditors.

Mr. Meredith and Mr. Williams, for the defendant in error.

[On the subject of the amendment of the declaration the court
declined hearing the counsel. J

There is but one question then in the case, viz., whether there
was such a change of property here as avoided the insurance ?
There is nothing in the policy to show that Findlay was to remain
in possession. The goods were to be in a country store. It does
not follow that the store was to be occupied or kept open all
*4/fil ^ e ^ me> Suppose *that Findlay had had three or four
-" stores, as sometimes happens, his personal care and superin-
tendence of all could not have been expected. The provision as to
trustees is inapplicable from its terms. In this case the jury have
found that there was no increase of risk. The ordinary proceeding
on a levy here, is to impound the goods on the premises, and to
put a man in charge. Certainly there is no increased risk in merely
shutting up the store ; and fastening it had the effect of keeping
out incendiaries, without preventing the ingress of persons disposed
to extinguish an accidental fire. The property was not divested
out of the defendant in the execution, by the seizure. Watson on
Sheriff 190 ; Wilbraham v. Shaw, 2 Williams's Saund. 47 ; Yel-
verton 44 ; Dyer 99 a, 67 b.; 1 Brownlow 41 ; Waller v. Twee-
dale, Noy's Rep. 107 ; Lefans v. Moregreen, 1 Keble 655; 2 Eq.


[Franklin Fire Ins. Co. v. Findlay.J

Cas. Abr. 380, pi. 14 ; Davis v. Richmond, 14 Mass. Rep. 475 ;
Thurston v. Mills, 16 East 254, 274, 278 ; Blake v. Shaw, 7 Mass.
506 ; Ludden v. Leavitt, 9 Id. 105. The authorities show that
there must be an insurable interest ; but there is no case which
proves that the goods must remain under a particular superintend-
ence. Upon the argument on the other side, what would be the
situation of the owner of a house who changes his tenant ? In the
case of a mortgagor it has been held that he is entitled to recover.
In 3 Bos. & Pul. 75 ; s. c. 5 Bos. & Pul. 268, is the case of a ship
in the possession of captors. Rider v. Ocean Ins., 20 Pick. 259 ;
Col. Ins. Co. v. Lawrence, 2 Peters 25 ; Stetson v. Mass. Fire Ins.
Co., 4 Mass. 330 ; Gordon v. Mass. Fire Ins. Co., 2 Pick. 249 ;
Strong v. Manufacturing Ins. Co., 10 Id. 40 ; Jennings v. Penn.
Ins. Co.. 4 Binn. 251 ; Reed v. Cole, 3 Burr. 1512 ; Wells v.
Philada. Ins. Co., 9 S. & R. 103 ; Smith v. Maplenack, 1 Term.
Rep. 445 ; Lock v. N. A. Ins. Co., 13 Mass. 61 ; Brick v. Chesa-
peake Ins. Co., 1 Peters 151 ; Russell v. Union Ins. Co., 4 Dall.
421 ; s. c. 1 Wash. C. C. Rep. 409 ; Carruthers v. Sheddon, 6
Taunt. 14; IE. C. L. R. 293; Ocean Ins. Co. v. Polleys, 13 Peters
157 ; 1 Sumner 434. A sale on execution is not a forfeiture. 1
Phillips on Ins. 419 ; Lane v. Ins. Co., 3 Fairfield 44 ; Graves v.
Boston Ins. Co., 2 Cranch 419 ; Lawrence v. Sebor, 2 Caines 203 ;
Green v. Reynolds, 2 Johns. Rep. 209 ; Lawrence v- Vanhorn, 1
Caines 276 ; Toppan v. Atkinson, 2 Mass. 365 ; Murrav v. Col.
Ins. Co., 11 Johns. 302; Oliver v. Green, 3 Mass. 133; Williams
v. Smith, 2 Caines 19; Fairclaim v. Shamtitle, 3 Burr. 1300;
Frieslander v. Ins. Co., 1 Moo. & R. 171 ; Hibbart v. Carter, 1
Term Rep. 745. A subsequent alteration in the nature of the
interest does not affect the policy. Etna Ins. Co. v. Tyler, 16
Wend. 397. Here Findlay had a right to redeem, and had there-
fore an insurable interest ; and if the case of Curry v. Common-
wealth Ins. Co., 10 Pick. 542, be law, he was not bound to give
notice. Roberts v. Tradesmen's Ins. Co., 17 Wend.; Ellis on
Insurance 38.

Mr. J. R. Ingersoll, in reply.

*This is not a question of insurable interest, but of a
change of interest and risk produced by extrinsic circum-
stances. The description of the risk in the policy would not sus-
tain the right to recover if the seizure had actually taken place at
the date of the policy. The interest of the assured to preserve
and protect the goods, is an essential element in the contract.
Here the interest of the assured was that the goods should be de-
stroyed. Wager policies are not lawful in Pennsylvania. This
was not a country store at the time of the fire, but a sheriff's lock-
up-house. The underwriters had a right to calculate upon an ebb,

497 SUPREME COURT [March Term,

[Franklin Fire Ins. Co. v. Findlay.]

as well as flow, of the goods. They were not to be fastened up.
The execution was not altogether in invitum, if judgment was con-
fessed. It was necessary to aver interest in the assured. Hughes
on Ins. 20, 21 ; Hammond on Ins. 113. Generally, where there
is access to goods, some are saved. Here there was not salvage to
the value of a farthing. A man may insure goods under execu-
tion, but he must so describe them. In Lane v. Ins. Co., 3 Fair-
field 48, a levy is spoken of as defeating an insurance. Berry v.
Smith, 3 Wash. C. C. Rep. 60 ; Doe v. Lanning, 4 Campbell 76.
The risk was necessarily increased here. The learned judge of the
District Court left nothing to the jury but the question of extraor-
dinary risk. A proper use of the goods by the sheriff was im-
proper as respects the insurers ; and if there is any difference in
the kind of risk, the insurers have a right to judge for themselves
whether they will continue liable.

The opinion of the court was delivered by

KENNEDY, J. The first error assigned, which is an exception
to the opinion of the court below, in permitting the plaintiff to
amend his declaration, cannot be sustained. By the act of 21st
of March 1806, it was made the imperative duty of the court,
either on or before the trial of the cause, to permit the plaintiff to
amend any informality in his declaration, or the defendant any in-
formality in his plea, which may affect the merits of the case.
The only objection made to the court's. allowing the amendment to
be made here is, that it was too late. But, according to the ex-
press terms of the act, it cannot be said to be too late, if it be done
at any time on the trial; that is, before the close of it. The
amendment then, as it appears, having been permitted while the
counsel were engaged in arguing the cause before the court and
jury, was certainly made on the trial of the cause, and therefore
within the time allowed by the act.

The remaining errors present but one question ; and that is,
whether the mere seizure of the goods by the sheriff under the
execution in his hands against the assured, and closing of the
window shutters and locking of the doors of the house in which
they were found, and were to be kept according to the terms of the
*4/81 Pli c y f ""insurance, without any change of their situation
J or removal of them thence being made whatever, is sufficient
to discharge the underwriters ?

That the policy was good, and covered the goods up to the time
of their seizure by the sheriff, is not denied ; but it is argued, that
as the policy of insurance operates only in favor of the assured
personally, and not on the goods, so as to accompany a transfer of
the right of property in them, and as the assured must have the
same interest or right in them at the time of the loss that he had
1 See 2 Whart. 159.


[Franklin Fire Ins. Co. v. Findlay.]

at the time of obtaining the policy, the seizure of them by the
sheriff, which, as it is alleged, divested the assured of the right of
property in the goods, as well as of the right of possession to them,
released the underwriters from all obligation arising out of the
policy. That the policy is not assignable, so as to follow or accom-
pany a transfer of the right or interest, which the assured had in
the goods at the time it was subscribed, may be admitted ; but it
cannot be admitted that the assured must have, at the time of the
loss, the same interest in the goods that he had at the time of pro-
curing the policy, in order to entitle him to claim for a loss actually
sustained by a peril insured against. The legal adjudications on
this point show the rule to be otherwise, and that he may recover
on the policy for the loss of a diminished interest. Stetson v.
Mass. Mutual Ins. Co., 4 Mass. 330 ; Gordon v. Mass Mutual Ins.
Co., 2 Pick. 249; Reed v. Cole, 3 Burr 1512; Strong v. Man.
Ins. Co., 10 Pick. 40.

Neither can it be admitted that the seizure of the goods in this
case divested the assured of his whole and entire interest and
right in the goods. He still retained the general right of pro-
perty in them, notwithstanding the seizure by the sheriff. The
most that the sheriff acquired thereby, was the possession, and a
special or qualified right of property. Wilbraham v. Snow, 2
Saund. 47 ; s. c. 1 Sid. 438 ; 1 Ventr. 52 ; 1 Lev. 282 ; 1 Mod.
30 ; Clerk v. Withers, 6 Mod. 290. The right of the sheriff by
virtue of the seizure is defeasible ; and hence, I take it, that it is
his duty to release and give up the goods to the defendant in
the execution, upon a tender of the debt and damage, or dam-
ages, as the case may be, together with the costs, being made to
him ; so that until the goods are actually sold by the sheriff, the
defendant has the right to redeem them, in order to prevent a
further accumulation of costs and a loss by the sale of them for
prices under their real value. The act of assembly of the 22d of
February 1821, regulating the fees to be received by sheriffs in
such case, indicates this principle pretty clearly. But the conse-
quence of the goods being destroyed in this case by fire after the
seizure, and before a sale could be made of them by the sheriff,
without any default on his part, goes to show, to demonstration, as
it were, the extent of the interest which the assured still continued
to have in their being preserved from such destruction, or other-
wise in being indemnified under the policy for the loss occasional
thereby *to him. It will not admit of a question, I appre- r+^nq
hend, that the destruction of the goods by the fire must be ^
his loss, unless he can obtain remuneration from the insurers upon
the policy. Indeed there is no other upon whom it could possibly
be made to fall, except the sheriff or the plaintiffs in the execution.
As to the sheriff, it will scarcely be claimed that he is answerable,

499 SUPREME COURT [March Term,

[Franklin Fire Ins. Co. v. Findlay.J

unless he failed to use ordinary diligence in taking care of and
preserving the goods ; for he can only be considered a bailee at
most for compensation, and therefore responsible only for ordinary
negligence. Story on Bail. 96, pi. 130, page 263, pi. 398. That
he was guilty of such negligence, or did not use ordinary diligence,
is not pretended. And as to the plaintiffs in the execution, it
must be admitted that they are innocent and free from all blame
whatever. The only person therefore connected with the goods
taken in execution and destroyed by the fire, that appears to have
been in default, is the assured, the defendant in the execution ;

Online LibraryPennsylvania. Supreme CourtReports of cases adjudged in the Supreme court of Pennsylvania, in the Eastern district [Dec. term, 1835 - Mar. term, 1841] (Volume 6) → online text (page 56 of 75)