Crossman v. Am. Ins. Co. of Newark, N. J., 23.

• Court: Supreme Court of Michigan
• Writing for the Court: FELLOWS
• Citation: 198 Mich. 304,164 N.W. 428
• Parties: CROSSMAN v. AMERICAN INS. CO. OF NEWARK, N. J.
• Docket Number: No. 23.,23.
• Decision Date: 27 September 1917

198 Mich. 304
164 N.W. 428

CROSSMAN
v.
AMERICAN INS. CO. OF NEWARK, N. J.

No. 23.

Supreme Court of Michigan.

Sept. 27, 1917.

Error to Circuit Court, Wayne County; Orien S. Cross, Judge.

Action by John M. Crossman against the American Insurance Company of Newark, N. J. To review a judgment for plaintiff, defendant brings error. Affirmed.

On April 3, 1912, Maria McDonald was the owner of a land contract for the purchase of certain premises in Highland Park, located on Hamilton boulevard, consisting of two stores, with apartments then occupied by her, on the second floor. She was in arrears on her contract, and on this day surrendered it to plaintiff, taking back an option to purchase it at any time within one year upon payment of $5,261, with interest at 6 per cent. By the terms of this option she was to pay $10 per month for the dwelling part of the property, and after May 6th plaintiff was to collect the other rents, for which he was to account on her paying the amount above mentioned. Daniel McDonald, a son of Maria McDonald, was indebted to Donaldson Craig, and on November 20th they came to an accounting, and there was found due Mr. Craig $2,531.28. To pay this sum Mrs. McDonald then assigned and transferred her option on the Hamilton boulevard property to him. He informed plaintiff of this assignment, and learned in the conversation the amount of insurance carried on the building. On January 24, 1913, the policy of insurance here involved was issued through Eliot and Haviland, defendant's local agents. The application for the insurance was verbal, and no inquiry was made as to the condition of the title. Mr. Craig, however, voluntarily and fully told the agents the state of the title as he had learned it, and the policy was issued to him as the assured ‘on property sold to assured on contract; loss, if any, payable first to John M. Crossman and then to assured as their interest may appear.’ Mr. Craig did not read the policy, which was the Michigan standard form. After the assignment from Mrs. McDonald to Craig, and after plaintiff knew of it, he gave Mrs. McDonald notice to quit, but nothing further seems to have been done, and she remained in the apartments until the fire. The record discloses that although plaintiff was the owner of the record title of the premises, he had given to one Campbell the right to redeem, on payment of the amount due from Campbell to plaintiff. On January 29, 1913, the fire occurred, and proof of loss was seasonably filed. On April 3, 1913, Craig tendered to plaintiff $5,700, and requested a deed. The parties disagreed as to the amount due, and a bill was filed for specific performance. Pending that suit, by agreement between them, Craig assigned any interest he might have under the policy of insurance to plaintiff, and this action was brought, resulting in a recovery in the circuit court. Defendant brings the case here.

Argued before KUHN, C. J., and STONE, OSTRANDER, BIRD, MOORE, STEERE, BROOKE, and FELLOWS, JJ.

[164 N.W. 428]

Lucking, Helfman, Lucking & Hanlon, of Detroit, for appellant.

James H. Pound, of Detroit (Charles H. Hatch, of Detroit, of counsel), for appellee.

FELLOWS, J. (after stating the facts as above).

It is insisted on behalf of defendant that the policy is not enforceable, because: (1) At the time the policy was issued Craig was not the unconditional and sole owner of the property; (2) that he did not have an insurable interest.

1. The testimony is undisputed that the application for this insurance was verbal, and that Mr. Craig was not inquired of as to the state of his title. There is no claim of any fraud practiced by him, or any deceit on his part. Under the holdings of this court, he was not required, under these circumstances, to show the exact condition of his title. Brunswick & Co. v. Assurance Co., 142 Mich. 29, 105 N. W. 76;Guest v. Insurance Co., 66 Mich. 98, 33 N. W. 31;Hoose v. Insurance Co., 84 Mich. 309, 47 N. W. 587,11 L. R. A. 340;

[164 N.W. 429]

Hall v. Insurance Co., 93 Mich. 184, 53 N. W. 727,18 L. R. A. 135, 32 Am. St. Rep. 497. Mr. Craig, however, advised the agents of the company what his interest was, and they therefore knew before the policy was issued that he was not the unconditional and sole owner of the property. Defendant cannot now claim a breach of condition then existent, and then known to it, to work a forfeiture of the contract of insurance, and rendering it void from the beginning. We have so recently considered the question of whether an insurance company may defend on the ground of a breach of condition, which existed at the time the policy was issued, to the knowledge of the agent, and therefore to the knowledge of the company, that we content ourselves with calling attention to that case, and the authorities there cited. Gordon v. Insurance Co., 163 N. W. 956.

2. It was pressed upon the court at the argument with vigor that Craig did not have an insurable interest in the property, and for this reason plaintiff must fail in his right of recovery, and the question is fully discussed in the briefs filed. This presents the meritorious question in the case. Policies of insurance founded upon mere hope and expectation and without some interest in the property, or the life insured, are objectionable as a species of...