Allen v. German Amer. Ins. Co. of New York

• Decision Date: 07 October 1890
• Citation: 25 N.E. 309,123 N.Y. 6
• Parties: ALLEN et al. v. GERMAN AMER. INS. CO. OF NEW YORK.
• Court: New York Court of Appeals Court of Appeals

123 N.Y. 6

25 N.E. 309

ALLEN et al.

v.GERMAN AMER. INS. CO. OF NEW YORK.

Court of Appeals of New York.

Oct. 7, 1890.

Appeal from supreme court, general term, third department.

PECKHAM and O'BRIEN, JJ., dissenting.

Richard L. Hand, for appellants.

F. A. Smith, for respondent.

GRAY, J.

The fire insurance policy, upon which the plaintiff has sued the defendant, was held below to have been forfeited through a violation of the agreement against other insurance, in excess of an amount specified. A brief statement of the facts, as disclosed by the record before us, will aid in an understanding of the reasons for our conclusion that the judgment was right. One Noble was a fire insurance broker, resident, during the summer months, at Lake Placid, where was also the hotel property of the plaintiff. Noble applied to plaintiff to insure his hotel and personal property, and he agreed that Noble might procure such insurance; and the amount of $4,630 was placed with this defendant. This figure was the aggregate of sums apportioned upon various items of property. Noble wrote out upon a piece of paper the apportionment of the insurance, and added a clause giving to the assured certain privileges as to the use of oil, repairs, and for other insurance. This paper writing was then transmitted to the defendant's office in New York city. The defendant afterwards sent to Noble a policy for the amount mentioned, and upon the face of the instrument was attached the paper forwarded by Noble, but with a change in that part of its writing which privileged the assured to make other insurance. The change was in these words, viz.: ‘Total amount including this policy not to exceed $15,320.’ The policy contained various terms and conditions, which bound the assured to the performance of, and the abstention from, certain things, and which defined precisely enough the engagement which the company assumed towards him. For the purposes of this case we need only refer to the following provisions: ‘The assured, by the acceptance of this policy, hereby warrants * * * that this company shall not be bound under this policy by any act of, or statement made to, or by, any agent or other person, which is not mentioned in this policy. * * * This policy shall become void, unless consent in writing is indorsed by the company hereon in each of the following instances, viz.: * * * If the assured have, or shall hereafter obtain, any other policy or agreement for insurance, whether valid or not, on the property above mentioned, or any part thereof. * * * If any broker, or other person than the assured, have procured this policy, or any renewal thereof, or any indorsement thereon, he shall be deemed the agent of the assured, and not of this company, in any transaction relating to the insurance.’ In the concluding clause of the instrument, it is provided that ‘this policy is made and also accepted by the insured, upon and under * * * all the foregoing agreements, covenants, limitations, and conditions.’ The condition against other insurance contained in the policy was so far modified by the company as to permit it to the extent, including the amount insured therein, of $15,320, and the permission was evidenced in writing upon the paper which had been forwarded from Noble, and which was attached to the face of the policy. Now this instrument was all there was to operate as a contract between the insurer and the assured. It contained, within itself, their relative engagements, and the whole of them. Its terms charged and plaintiff with notice that the source and extent of the defendant's liability were to be found there, and that a failure to keep to certain agreements on his part would exempt the company from any liability to indemnify him for losses. This was the contract proposed by the company, and it was open to the plaintiff to accept it, or to refuse it. He did accept it, and became as much bound thereby as he would have been by any other contract; for there is no distinction to be made between such agreements of insurance and other agreements, for the performance of acts, or the payment of money. It forms no exception to the general rule that contracts will be enforced according to their terms, and effect will be given to the expressed intention and the evident understanding of the parties. Every provision, in the absence of fraud, and of conditions immoral in the eye of the law, will be presumed to be material to the obligations assumed; and, when parties enter into contracts which depend for their validity and enforcement upon the fulfillment of prescribed conditions, they will be held to the exact nature of the engagement. They are presumed to intend the consequences of their acts, and it will afford no excuse to them that they mistook the law of their case, or that through inadvertence the conditions and possible consequences were unnoticed. This policy contained conditions of grave import, and which clearly hedged in the contractual relations of insurer and insured. It strongly behooved the plaintiff to consider its contents, when tendered to him, for there was nothing preceding or outside of it which at all affected the insurance company. It was essentially a conditional obligation of the company, and, when he accepted it, the plaintiff became chargeable with the knowledge of its contents, and took it according and subject to its terms. There is no reason why any provision should be set aside. In this particular case it was found that the plaintiff did not know about the limitation as to other insurance; but that is his fault, and not that of the company. It had the right to presume that the plaintiff knew of, and assented to, every provision in its policy, when he accepted it. Nor is it of any...