Globe & Rutgers Fire Ins. v. King Foong Silk Filature

On January 27,1924, in Shanghai, China, a fire destroyed the Hsin Kong Godown, or warehouse, together with its contents. In it the plaintiffs, who were engaged in the silk filature business, had stored 115 piculs of cocoons, of a value in excess of Shanghai taels 25,000, and covered by three several policies of fire insurance, aggregating that amount, issued by the defendant, Globe & Rutgers Fire Insurance Company. Upon demand of the insurer, the question of the extent of the loss was submitted to arbitration, resulting in an award of the full amount of the policies. Thereafter it denie’d all liability, and plaintiffs brought this suit. Upon comprehensive findings of fact, the court gave the plaintiffs judgment, from which defendant brings error.

The principal defense below and here is predicated upon a clause in the policies which provides that, "if the interest in the property insured pass from the insured, otherwise than by will or operation of law, the insurance ceases to attach as regards such property. The material facts may be briefly stated:

Plaintiffs did business largely on credit, borrowing in the main, if not exclusively, from one Kuo, who was a friend of one of them…