Metzger v. Aetna Ins. Co.
| Citation | 227 N.Y. 411,125 N.E. 814 |
| Parties | METZGER v. AETNA INS. CO. |
| Decision Date | 06 January 1920 |
| Court | New York Court of Appeals |
OPINION TEXT STARTS HERE
Action by Emanuel Metzger, as receiver of the Kingston Chemical Manufacturing Company, against the AEtna Insurance Company. From judgment of the Appellate Division (186 App. Div. 627,175 N. Y. Supp. 428) reversing a judgment dismissing the complaint rendered upon the direction of the court and granting a new trial, defendant appeals.
Judgment of the Appellate Division reversed, and that of the Trial Term affirmed.Appeal from Supreme Court, Appellate Division, Third Department.
John N. Carlisle, of Albany, for appellant.
Joseph M. Fowler, of Kingston, for respondent.
The action is to reform a policy of fire insurance, issued by the defendant to the Kingston Chemical Manufacturing Company, and to recover upon the policy as reformed. The trial justice, at the close of the evidence in behalf of the plaintiff, ordered the dismissal of the complaint. The Appellate Division reversed the consequent judgment and granted a new trial.
The direct evidence, and the reasonable inferences from it, most favorable to the plaintiff, would have permitted the jury to find as the facts: The policy, issued June 9, 1916, insured for the term of one year from that date, against fire, in the sum of $2,500, a factory building in process of erection. Attached to and a part of the policy when delivered was this slip or rider:
‘ Builder's Risk Clause.-It is understood and agreed that this policy covers the property described herein only while the building is in process of erection and completion and not as an occupied building and that all liability under this policy shall cease when the building shall become occupied in whole or in part; except that if the building is to be a manufacturing plant machinery may be set up and tested.’
The policy was delivered by the agent of the defendant to the president of the insured, who, at about its date, had told the agent that the building was inclosed and to write a policy for $2,500 at present. Prior to the delivery there were no other negotiations and no agreement between the parties. Upon the outside of the folded policy, as delivered, appeared the words, ‘Expires June 9, 1917,’ and the insured's president, at the delivery, said to the defendant's agent, ‘This policy is written for a year,’ and received the reply, ‘Yes,’ and the statement:
‘He (the agent) had to write it at $1.25, which is a builder's risk rate, as the building was not identified by the Underwriters', but he would try to get the Underwriters' to put a rate on it and he would let me know.’
He paid the premium of $31.25, and without opening the policy put it in the safe. The building was completed in July, 1916. In October, 1916, it had become equipped with the machinery, and the company applied for and received a second policy in the sum of $1,500 from a company other than the defendant, represented, however, by the same persons as agents. In October or November, 1916, the agents of defendant told the insured's president that upon the policy of June 9th a premium rate, to take the place of the builder's risk rate, less than $5 on each $100, could not be procured, and wrote him under date of December 16, 1916, as follows:
The inclosed indorsement pertinent to the policy of June 9th fixed the amount, term, and expiration identically with those in the plicy and rate in the additional sum of $93.75, which the insured refused to pay. The agents said they would have to cancel the policy. There ended the transactions between the parties. The insured building was destroyed by fire February 5, 1917. The insured duly served notice and proofs of loss. The defendant denied liability upon the ground it was not an insurer of the building. The insured's president was and had been for many years a lawyer and had had an insurance agency of his own after his admission to the bar. He knew the Underwriters' Association made the premium rates.
[3] Those facts do not constitute or disclose a liability on the part of the defendant. The policy, in and through the indorsement slip or rider, in form stipulated that it was in force and effect only while the building was in process of erection and completion and the machinery placed and tested, and that all liability under it should cease when the building shall become occupied in whole or in part for operating. The stipulation was in purpose and intendment a potential qualification or limitation of the expressed existence of the insurance through the term of one year. The two stipulations were, obviously, to be read together, and said the insurance shall exist for one year unless at a time within the year the erection of the building should be completed and its operation entered upon, at which time it shall cease to exist and all the liability under the policy shall cease. Expressed conditions within a policy terminating or forfeiting the insurance within the term prescribed in the policy are neither novel nor unusual. The legality of that involved in the instant case is not and cannot be questioned. Insurance Law (Cons. Laws, c. 28) § 121. Its language and meaning are unambiguous, unequivocal, and not susceptible of interpretation. There cannot be applied to it the rule that courts are averse to forfeitures and are cautious in enforcing them. If the insured obtained or held a mistaken view or belief concerning the agreements of the policy, the fault or negligence of its president and representative was the cause. A mere reading of the policy would have made him and the plaintiff know the agreements the plaintiff was accepting and entering into. To hold that a contracting party, who, through no deceit or overbearing inducement of the other party, fails to read the contract, may establish and enforce the contract supposed by him, would introduce into the law a dangerous doctrine. Of course, the doctrine does not exist.
[4][5] It has often been held that when a party to a written contract accepts it as a contract he is bound by the stipulations and conditions expressed in it whether he reads them or not. Ignorance through negligence or inexcusable trustfulness will not relieve a party from his contract obligations. He who signs or accepts a written contract, in the absence of fraud or other...
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