matter, or terms, may be made by indorsement with consent. But a material alteration by the insured without the consent of the insurer concerned, destroys all claims against him, although it were made in good faith, and with the expectation of getting his consent. But the alteration to have this effect must be material,2 and made by the insured or by his procurement or consent.3 And if the insured strike out the signature, or other material words, this is a cancelling of the policy by him.1

It may be added, that an alteration by the insurers, without the consent of the insured, has no effect whatever.5 Although, after the policy is made both parties may agree to rescind it, yet the fact of the company's becoming insolvent and voting to cancel their policies and giving notice of the same to the assured does not put an end to the contract, unless the assured assents to the rescission."

If there be a material mistake in the policy, it cannot be cor

Augusta Ins. & Banking Co., Gray, 204, Merrick, J., said: "It is now a perfectly well-settled doctrine, that a written contract may be materially varied and changed by subsequent agreements, orally entered into by the parties, before there has been a breach of its stipulations." Goss v. Nugent, 5 B. & Ad. 58.

1 Langhorn v. Cologan, 4 Taunt. 330; Fairlie v. Christie, 7 id. 416; Campbell v. Christie, 2 Stark. 64; Forshaw v. Chabert, 3 Brod. & B. 158, 6 J. B. Moore, 369; Laird v. Robertson, 4 Brown, P. C. 488. See Entwisle v. Ellis, 2 H. & N. 549, cited supra, p. 34, n. 4.

2 Sanderson v. M'Cullom, 4 J. B. Moore, 5; Sanderson v. Symonds, 1 Brod. & B. 426, 4 J. B. Moore, 42. In these cases, which were actions against different underwriters on the same policy, the vessel had liberty "to sell, barter, and exchange goods at any of the ports to which, under the terms of the policy, she might proceed during her stay." The insured added the words "and trade," after the words, "during her stay." To this alteration some of the underwriters assented, while others did not. Held, that all were liable because the alteration was immaterial, and they would have been held had no such words been introduced. See also, Falmouth v. Roberts, 9 M. & W.469.

* Nichols v. Johnson, 10 Conn. 192. See, however, vol. 1, p. 230, n. 1.

Thus in Fairlie v. Christie, 7 Taunt. 416, the insured struck out with a pen the time of the warranty of sailing, and inserted in the margin a different time. It was held, that this avoided the policy. See also, cases supra.

n. 1.

Kennebec Co. v. Augusta Ins. & Banking Co., 6 Gray, 204, cited supra, p. 35,

* Alliance Mut. Ins. Co. v. Swift, 10 Cush. 433. In New England Mut. F. Ins. Co. v. Butler, 34 Maine, 451, it was held, that a vote of a mutual insurance company that if the assessments upon its premium notes should not be punctually paid, the contracts of insurance previously made by the party failing to pay, should be suspended, was of no validity unless assented to.

rected, nor its effect averted by a court of law.1 But equity will correct the mistake and treat the policy as reformed. Our notes will show the principles upon which this has been done.2

1 Constable v. Noble, 2 Taunt. 403; Kaines v. Knightly, Skin. 54; Mellen v. National Ins. Co., 1 Hall, 452; Chamberlain v. Harrod, 5 Greenl. 420. See also, cases cited in the next note.

2 Mottenx v. London Ass. Co., 1 Atk. 545; Collett v. Morrison, 9 Hare, 162, 12 Eng. L. & Eq. 171; Hogan v. Delaware Ins. Co., 1 Wash. C. C. 419; Flint v. Ohio Ins. Co., 8 Ohio, 501; Firemans Ins. Co. v. Powell, 13 B. Mon. 311; Dow v. Whetten, 8 Wend. 160. The mistake will be corrected whether it be one of law or of fact. Oliver v. Commercial Mutual Marine Ins. Co., 2 Curtis, C. C. 277, 299. But in every case the evidence of the mistake must be clear and satisfactory. There ought to be the strongest proof possible." Per Lord Chancellor Hardwicke, Henkle v. Royal Exch. Ass. Co., 1 Ves. Sen. 317. See also, Graves v. Boston Mar. Ins. Co., 2 Cranch, 419, 441; Lyman v. United Ins. Co., 2 Johns. Ch. 630; Gillespie v. Moon, id. 585; Phoenix Ins. Co. v. Gurnee, 1 Paige, Ch. 278; Woodruff v. Columbus Ins. Co., 5 La. Ann. 697. In Andrews v. Essex Fire & Mar. Ins. Co., 3 Mason, 6, 10, Mr. Justice Story said: "A court of equity ought to be extremely cautious in the exercise of such an authority, seeing that it trenches upon one of the most salutary rules of evidence, that parol evidence ought not to be admitted to vary a written instrument. It ought, therefore, in all cases to withhold its aid, where the mistake is not made out by the clearest evidence according to the understanding of both parties, and upon testimony entirely exact and satisfactory." See also, Franklin Fire Ins. Co. v. Hewitt, 3 B. Mon. 231. In Oliver v. Commercial Mutual Marine Ins. Co., supra, it was said that the courts would interfere much more readily in the correction of a mistake in the execution of a power, than in the reformation of a written contract. In this case the complainant, a merchant in Liverpool, being the owner of a vessel called the Liscard, ordered his agent at Quebec to insure a certain amount on the vessel and her freight in New York. The agent wrote to McLimont, an insurance agent in New York, to procure the insurance. McLimont then wrote to D. R. McKay in Boston to have this done. McLimont did not state any thing in regard to the ownership. McKay made application in the usual form to the defendants. The same day the company sent to him to find out whose name should be inserted in the policy. He thereupon wrote and sent the following: "Policy for D. R. McKay, on Liscard, to be made out on account of A. McLimont, and payable to him or order." The policy was accordingly so made out. After the loss the complainant brought a bill in equity alleging that the words as agent and for whom it may concern," were omitted after McLimont's name. The court were of the opinion that the mistake arose in the execution of a power, and that the complainant was entitled to have the policy reformed. As the case is one of great importance we give the language of Mr. Justice Curtis on the main point, p. 293: "To state fully and precisely the grounds upon which I think this case rests, I should say that when a complete contract for a policy is made by a known agent, and nothing is said respecting any declaration of interest, the contract is to insure the property of his principal, and in order that this contract may take effect, power is impliedly reserved to the agent specially to declare the interest upon which the insurance is to attach, and to have such declaration inserted in the policy, when drawn, or to have the policy drawn so as to insure him as agent, leaving the declaration of interest to be made afterwards, in case of loss. Either is within the known usage of agents and underwriters; and

SECTION 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 is, that the action must be brought in the name of the assignors.3

the conduct of the respondents in sending to McKay to obtain this declaration, and of McKay in making it, show, if any proof were needed, that it was understood by both, he possessed this power. And when a mistake was made in declaring the interest, it was as Lord Ellenborough said, a mistake in executing a power reserved to the agent by a complete and binding contract, in which power the underwriter has no interest, save that it should be rightly executed, so that he may obtain the premium, and have a valid title to retain it, and over which he can, justly, exercise no control." There was evidence that McKay purposely, and not through mistake, declared the interest to be in McLimont in order that they might share the scrip dividends. Mr. Justice Curtis said: "If this were so, a court of equity could not treat an attempted fraud as an innocent mistake; and though the principal, in such a case, would be in no fault, it could not relieve him, but must leave him to his remedy against his agent." The court were of opinion that though it appeared that they probably intended to take the scrip dividends, yet it did not appear that they intended to take them without the consent of their principal.

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, an assignee of such a policy could maintain an action upon it in his own name. We have seen, ante, vol. 1, p. 138, that a bill of lading "to order or assigns" is not such a negotiable instrument, and a policy of insurance would doubtless be governed by the same rules of law. See also, Skinner v. Somes, 14 Mass. 107.

2 Wakefield v. Martin, 3 Mass. 558; Spring v. South Carolina Ins. Co., 8 Wheat.

268.

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. Williamsburgh Ins. Co., 3 Hill, 88, the insured assigned his interest in the subject-matter with the assent of the underwriters, but did not assign

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.1 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.1 But if the

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. Mut. F. Ins. Co., 10 Foster, 231; Pollard 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, n. (ƒ).

2 Powles v. Innes, 11 M. & W. 10, 12, per Parke, B.; Wells v. Archer, 10 S. & R. 412.

3 Hackett v. Martin, 8 Greenl. 77; Hatch v. Dennis, 1 Fairf. 244; Matthews v. Houghton, id. 420; Frear v. Evertson, 20 Johns. 142.

4 Hale v. Mechanics' Mut. F. Ins. Co., 6 Gray, 169; Grosvenor v. Atlantic Fire Ins. Co., New York Court of Appeals, June T. 1858, 21 Law Reporter, 308, 7 Am. Law Register, 118. This case overrules Traders Ins. Co. v. Robert, 9 Wend. 404, 474; Tillou v. Kingston Mut. Ins. Co., 7 Barb. 570, 1.Seld. 405. The case of Boynton v. Clinton & Essex Mut. Ins. Co., 16 Barb. 254, may, perhaps, be distinguished on the ground pointed out in the next note. In Buffalo Steam Engine Works v. Sun Mutual Ins. Co., New York Court of Appeals, 1858, the action was brought by the mortgagee, to whom the policy had been assigned. The owner of the vessel procured the insurance upon her, the underwriter knowing at the time that the owner was indebted to the plaintiff for an engine furnished the vessel; that he was to mortgage the vessel to secure such debt, and that his object in obtaining the policy was to assign it as security for the debt.

insurers, at the time of their assent to the transfer of the policy, impose any further obligations on the transferree, this may be evidence of a new contract with him, and then the acts of the mortgagor cannot affect his rights as transferree.1

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.2

If notice is given of the assignment, and the insurers consent, 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.3

The policy contained permission to insure to the extent of $40,000, and to assign the policy. Held, that an over insurance by the owner after the policy was assigned, was fatal to the recovery. But see Pollard v. Somerset Mut. F. Ins. Co., 42 Maine, 221.

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.”

2 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. 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 r. 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.

& 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