Porter v. Traders' Ins. Co. of Chicago

• Decision Date: 20 November 1900
• Citation: 58 N.E. 641,164 N.Y. 504
• Parties: PORTER v. TRADERS' INS. CO. OF CHICAGO.
• Court: New York Court of Appeals Court of Appeals

164 N.Y. 504

58 N.E. 641

PORTER

v.TRADERS' INS. CO. OF CHICAGO.

Court of Appeals of New York.

Nov. 20, 1900.

Appeal from supreme court, appellate division, Fourth department.

Action on a marine policy by Alexander J. Porter against the Traders' Insurance Company of Chicago, Ill. Judgment for plaintiff, and from an order denying a motion for a new trial, and overruling defendant's exceptions heard in appellate division (53 N. Y. Supp. 1112), defendant appeals. Affirmed.

H. C. Day, for appellant.

John M. Hull, for respondent.

O'BRIEN, J.

This was an action on a policy of fire insurance issued by the defendant on the 7th day of August, 1896, to the firm of Sloan & Cowles, then owners of the steamer William Harrison, whereby it insured that vessel against loss or damage by fire in the sum of $2,500. It was totally destroyed by fire on the 7th day of October following, and subsequently the interest of the insured in the policy was assigned to the plaintiff. At the trial both parties moved for the direction of a verdict, and the court made a direction for the plaintiff for the amount claimed, and ordered the defendant's exceptions to be heard in the first instance at the appellate division. That court overruled the exceptions, denied a motion for a new trial, and ordered judgment for the plaintiff on the verdict. The only question of law presented arises upon the following provisions contained in the policy: ‘The insured, as often as required, shall exhibit to any person designated by this company all that remains of any property herein described, and submit to examination under oath, by any person named by this company, and subscribe the same, and, as often as required, shall produce for examination all books of account, bills, invoices, and other vouchers or certified copies thereof, if originals be lost, at such reasonable place as may be designated by this company or its representatives, and shall permit extracts and copies thereof to be made. No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity until after full complicance by the insured with all the foregoing requirements, nor unless commenced within twelve months next after the fire. This policy is made and accepted subject to the foregoing stipulations and conditions.’ The defendant caused written notice to be served on Sloan & Cowles on the 17th of December, 1896, to appear for examination before a person named in the notice on that day at 10 o'clock in the forenoon at a place designated. Both parties appeared in compliance with the notice, and were sworn and examined by counsel who appeared for the defendant. It is admitted that they complied in all respects with the provision of the policy referred to, except in one particular. They refused to answer the following question propounded to each of them in the course of the examination, ‘How much was paid for the steamer?’ The failure to answer this question is interposed as a defense by the answer, and is the only defense insisted upon here.

The burden was upon the defendant to show that the insured violated the conditions of the policy in some substantial and material particular. It was stipulated in the policy that the defendant should not be liable beyond the actual cash value of the property at the time of the loss, and that such loss should be ascertained according to such actual cash value, and in no event should it exceed the then cost of replacing the same. The steamer was about 30 years old, but had been repeatedly repaired and practically rebuilt, including the engine, boiler, and machinery. The plaintiff purchased the boat some time prior to 1896 at a receiver's sale, with other property, and sold her to the insured in May, 1896, taking back a mortgage, to which the insurance was collateral.

The question is whether, upon an inquiry with respect to the actual cash value of the steamer at the time of the trial, the price paid by the insured before the insurance was effected, under the circumstances stated, was, as matter of law, a material inquiry under any and all circumstances. In an inquiry concerning the value of personal property at a given time the price paid by the owner is sometimes, but not always, material. It depends on the nature of the property and its condition when purchased, compared with its condition afterwards. There are certain articles that have a standard price in the market, not subject to much fluctuation, and other things that have no market value at all. In...