Gordon v. Mechanics' & Traders' Ins.

Citations

• 120 La. 441
• 45 So. 384
• 1907 La. LEXIS 665

Syllabus

<p>INSURANCE — Fire Insurance — Contract — Forfeiture — Change of Title.</p> <p>A fire insurance policy contained the following stipulation: “The entire policy, unless ■otherwise provided by agreement herein indorsed or added hereto, shall be void * * * if the interest of the insured be other than unconditional and sole ownership * * * or if any change other than death of an assured takes place in the interest, title or possession of the subject of insurance whether by legal process or judgment, or by voluntary act of the -assured, or otherwise, or if this policy be assigned before a loss.” On February 1, 1905, the assured filed a petition in the United States District ■Court for the Eastern District of Kentucky in voluntary bankruptcy, and on the same day he was adjudged a bankrupt. On February 2d the stock of merchandise insured was (at Ruston, La.) destroyed by fire. On February 3d a receiver was appointed, and on February 13th the same person was appointed as trustee and qualified as such. On May 13th the District Court confirmed a composition which had been entered into between the bankrupt and his creditors. The assured thereafter sued the insurance company. The latter pleaded that the policy had become void by reason of the proceedings in bankruptcy. The court rendered judgment in favor of the plaintiff, and the correctness of that judgment has been brought up for review.</p> <p>Held, the judgment is correct and is affirmed. The property insured was destroyed before either a receiver or a trustee was appointed. In the interim between the adjudication in bankruptcy and the appointment and qualification of the trustee, the title to the property with the incidents of interest and possession continued in the bankrupt. When the trustee was appointed, there was no property in existence to which the title in the trustee could vest. The trustee of a bankrupt is not obliged to accept title to the property surrendered by the bankrupt, if to do so would not' benefit the