novation can be justified upon any principles of the common law. It is clear that it violates a fundamental principle in regard to consideration, viz., that the consideration must move from the promisee. In the present case, the promisee suffers no detriment and makes no change of position at the request of the promisor, and he has given nothing to the insurer for the benefit of the promise, so that from him there is no consideration. Furthermore, the circumstances of the transaction will hardly justify this view, even if the doctrine of novation be admitted. In their bare detail they amount to this. The property insured is sold, and the policy is handed over either with or without a written assignment. The policy is then taken by the assignee to the insurance company, and they consent to the assignment. It is sometimes customary for the assignment and the consent to be in writing, and then the consent is usually indorsed on the policy. Nothing more is done, and it is difficult to see how these facts can be construed to mean a surrender of an old obligation and the issue of a new one,—particularly as the same obligation is reissued which was issued in the first place.
But in policies like that which was transferred in Fogg v. Middlesex Mutual Fire Insurance Co., there is a condition that the policy shall be void if the property be assigned. In most cases the property is assigned before the consent of the insurer is obtained, and this condition is broken, therefore, before the consent of the insurer to the assignment is obtained. The obligation of the insurers, therefore, is avoided, and hence there is no legal obligation which can be surrendered in return for the new obligation; and yet the assignment is perfectly effectual against the insurance company.[1]
The conclusion therefore is irresistible, that if the contract of insurance is a personal contract,—that is, a contract which is confined to an indemnity of the person originally insured,—an assignee of the contract of insurance has no rights against the underwriter. Yet a perfectly adequate explanation of the rights of an assignee is afforded if we modify this view somewhat, as is suggested in Judge Hare’s notes to the “American Leading Cases.”[2] In speaking of Judge Shaw’s views (supra), he says:
