Forward v. Cont'l Ins. Co.

• Citation: 37 N.E. 615,142 N.Y. 382
• Parties: FORWARD v. CONTINENTAL INS. CO.
• Decision Date: 05 June 1894
• Court: New York Court of Appeals

142 N.Y. 382

37 N.E. 615

FORWARD

v.CONTINENTAL INS. CO.

Court of Appeals of New York.

June 5, 1894.

Appeal from supreme court, general term, fifth department.

Action by John D. Forward against the Continental Insurance Company on a fire policy. Verdict for plaintiff. The general term (21 N. Y. Supp. 664) overruled exceptions brought by defendant from the circuit court, and defendant appeals. Affirmed.

Gray, J., dissenting.

Myron H. Peck, Jr., for appellant.

Safford E. North, for respondent.

O'BRIEN, J.

The judgment in this case was recovered upon a policy of insurance issued April 23, 1891, at one year, upon a store and the goods therein, which were owned by the plaintiff. By the terms of the policy the risk was distributed as follows: Upon the store, a sum not exceeding $1,000; the goods, a sum not exceeding $1,200; and the furniture and safe, a sum not exceeding $100. The entire property was destroyed by fire on the 27th of September, 1891. The complaint alleges, and the answer admits, that the loss was adjusted and determined between the plaintiff and a general agent of the defendant on the 6th of October following at $1,950, and the recovery was for this sum and interest. The only defense interposed by the answer, or urged upon the argument of the appeal in this court, was a breach on the part of the plaintiff of one, or perhaps two, of the conditions contained in the following clause of the policy: ‘This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void * * * if the interest of the insured be other than unconditional, sole ownership, * * * or if the subject of insurance be personal property, and be or become incumbered by a chatted mortgage, * * * In any matter relating to this insurance, no person, unless duly authorized in writing, shall be deemed the agent of this company. * * * This policy is made and accepted subject to the foregoing stipulations and conditions, together with such other provisions, agreements, or conditions as may be indorsed hereon or added hereto; and no officer, agent, or other representative of this company, shall have power to waive any provision or condition of this policy, except such as, by the terms of this policy, may be the subject of agreement, indorsed hereon or added hereto; and, as to such provisions and conditions, no officer, agent, or other representative of this company shall have such power, or be deemed or held to have waived such provisions or conditions, unless such waiver, if any, shall be written upon or attached hereto. Nor shall any privilege or permission affecting the insurance under the policy exist, or be claimed by the insured, unless so written or attached.’ It was shown at the trial that the plaintiff, about two months before the policy had been issued to him, had executed and delivered to his brother an instrument in the form of a bill of sale upon the stock of goods, furniture, and fixtures in the store, which on March 3, 1891, was filed in the town clerk's office. This instrument, in consideration of $500, purports to transfer the plaintiff's interest in the property absolutely to his brother. The proof at the trial tended to show that there was in fact no consideration for the transfer; that it was colorable, merely, and made between the two brothers with reference to some litigations pending or threatened against the plaintiff. The brother never in fact paid anything as a consideration for the transfer, and no debt was due or owing to him by the plaintiff. He never in fact claimed any title to the property, or any right to its possession, which always remained in the plaintiff. There was also proof that the existence of this bill of sale, and its true consideration, character, and purpose, were disclosed to the defendant's agent before the policy was issued or delivered. The court submitted two questions to the jury: (1) Whether the defendant, notwithstanding the condition of the policy, had knowledge of all the facts respecting the existence, nature, and purpose of the bill of sale; instructing them that the knowledge of the agent was the knowledge of the company, and that, if they found that the defendant had knowledge of the facts, the policy was not avoided. (2) Whether a statement contained in the proofs of loss, to the effect that there was no incumbrance on the property at the time, was willfully false, and known to be so by the plaintiff when he made the proofs, and was made for the purpose of defrauding the defendant; instructing them that, if it was not, then it did not amount to false swearing, within the intent and meaning of a condition in the policy. The verdict was in favor of the plaintiff, and hence all the disputed facts material to the questions of law must be deemed to be established in the plaintiff's favor.

It was said by Judge Andrews in Walsh v. Insurance Co., 73 N. Y. 11, upon the authority of many cases, that ‘conditions for the prepayment of premium, and the like, which enter into the validity of a contract of insurance at its inception, may be waived by agents, and are waived, if so intended, although they remain in the policy when delivered, and that a contract for renewal is, for the purpose, to be treated as the original contract.’ It has uniformly been held by this court that a condition of this character in a contract of insurance will not operate to avoid it after a loss, providing the company, before delivering the policy, had knowledge of the fact that the insured, notwithstanding the warranty, or the statement and the condition, was not the sole owner, or that it was incumbered. In such cases the company is deemed to have waived the condition, or by the delivery of the policy with the condition avoiding it in case the insured is not the sole owner, or that the property is incumbered, and accepting the premium, is held estopped from setting up the condition as a defense. It was never supposed that such a condition was intended to apply to a state of facts in regard to which the company had been fully informed when it accepted the risk. The cases on this point are numerous, and it is impossible to make any distinction in principle between the conditions considered and that involved in the case at bar. Van Schoick v. Insurance Co., 68 N. Y. 434;Whitehead v. Insurance Co., 76 N. Y. 415;Woodruff v. Insurance Co., 83 N. Y. 134;Short v. Insurance Co., 90 N. Y. 16;McNally v. Insurance Co., 137 N. Y. 389, 33 N. E. 475;Carpenter v. Insurance Co., 135 N. Y. 298, 31 N. E. 1015;Cross v. Insurance Co., 132 N. Y. 133,...