Weed v. Hamburg-Bremen Fire Ins. Co.

• Decision Date: 24 May 1892
• Citation: 133 N.Y. 394,31 N.E. 231
• Parties: WEED v. HAMBURG-BREMEN FIRE INS. CO.
• Court: New York Court of Appeals Court of Appeals

133 N.Y. 394

31 N.E. 231

WEED

v.HAMBURG-BREMEN FIRE INS. CO.

Court of Appeals of New York.

May 24, 1892.

Appeal from supreme court, general term, third department.

Action by Henry E. Weed against the Hamburg-Bremen Fire Insurance Company on a policy of insurance. From a judgment of the general term, affirming a judgment entered on a verdict directed for plaintiff, defendant appeals. Affirmed.

A. H. Sawyer, for appellant.

Smith & Wellington, for respondent.

The other facts fully appear in the following statement by EARL. C. J.:

On the 30th day of October, 1873, Orson Richards executed to the plaintiff a mortgage upon his gristmill at Sandy Hill, in this state, to secure the payment within three years of all advances to be made by the plaintiff to him, and all bills, drafts, and notes on which he should be maker, indorser, drawer, or acceptor, which the plaintiff should thereafter discount for him, with interest thereon. On the 1st day of May, 1875, Richards executed and delivered a deed to Dean Sage, conveying to him the gristmill and other real estate, in trust to have, hold, enjoy, and dispose of the same, and receive the rents, issues, profits, and proceeds thereof, so long as the real estate, or any portion thereof, should remain unsold and undisposed of under the provisions and in pursuance of the trusts in the deed contained, and until such period to make application of the rents, issues, and profits of the real estate as in the deed later provided; and further in trust to make sale of the whole or any portion of the real estate at such time or times as to him, the trustee, might seem best, for cash or upon credit, or partly for cash and partly upon credit, or to otherwise dispose of the same; and, after payment of all specific liens and incumbrances on the real estate, to make application of the remaining proceeds, and all the money and property received by him, first to the payment of the expenses and commissions of the trustee, and then to the payment of all the debts of Richards, pro rata, and the residue of the property was to be reconveyed by the trustee to Richards. It does not appear what, if anything, the trustee ever did under the trust deed. Richards remained in possession of the real estate, claiming to own the same, until his death, September 4, 1879. He died intestate, insolvent, not having real and personal property sufficient to pay his debts, and leaving a widow and three children, all residing at Sandy Hill. The widow and a son, Eber Richards, were appointed administrators of the estate of the intestate, and the widow died in May, 1881. On the 24th day of November, 1881, the plaintiff procured a policy of insurance from the defendant upon the gristmill, and the machinery therein, by which policy it insured the ‘estate of O. Richards against loss or damage by fire to the amount of one thousand dollars,-$750 on their frame water power gristmill building; $250 on fixed and movable machinery, shafting, pulleys, hangers, and other machinery therein,-loss, if any, payable to Henry E. Weed, mortgagee, as his interest may appear.’ No mention was made in the policy of the trust deed. The plaintiff procured the policy without consultation with the heirs or administrator of Richards, and paid the premium for the same with his own money. The mortgage to him did not contain any provision about the insurance of the property, and did not authorize the mortgagee to insure the property at the expense of the mortgagor. The property insured was destroyed by fire on the 4th day of February, 1882, and at that time, and also at the time of the insurance, there was due upon the mortgage about $12,000. The plaintiff brought this action to recover upon the policy, and upon the trial, at the close of the evidence, the court directed a verdict in his favor.

EARL, C. J., ( after stating the facts.)

The policy contained this provision: ‘If the exact interest of the insured in the property, whether as owner, trustee, consignee, factor, agent, mortgagee, lessee, or otherwise, be not truly stated in the policy, then and in every such case this policy shall be void;’ and the principal contention of the defendant is that the policy was void because the facts in reference to the trust deed were not truly stated therein. The solution of the question raised by this contention depends upon the scope and meaning to be given to the words ‘estate of O. Richards' contained in the policy. The policy was valid, although no particular person was named therein as the assured. Clinton v. Insurance Co., 45 N. Y. 454;Weed v. Insurance Co., 116 N. Y. 106, 22 N. E. Rep. 229. What is the precise significance of the word ‘estate,’ when used as it is here, has not been determined in any case, and the law has not assigned to it any definite meaning. It is an indeterminate word, the precise meaning of which is to be ascertained from the circumstances under which it is used. It may be used to represent the interest of administrators in personal estate, or the interest of widow and heirs in real estate, or the interest of all these in both personal and real estate, and the scope to be given to it will depend largely upon the persons who procured the policy, and the purpose for which it was procured. Here the plaintiff knew of the trust deed. He needed an insurance covering all the interests in the property. He could have had no purpose to insure any particular or limited interest. It was difficult, if not impossible, to specify what particular interest the administrator or the heirs or the trustee had, and hence the comprehensive word ‘estate’ was used to cover all the interests. The plaintiff procured this insurance through an insurance broker, and it does not appear that he had any negotiation in reference thereto with the defendant or its agent. He must therefore be presumed to have chosen the phrase inserted in the policy; and the defendant assented to it, and must be held to have assented to its use, in the most comprehensive sense that will give validity to the policy. In the absence of proof, it cannot be assumed that the defendant used the phrase in any restricted sense, and certainly not in a sense which would render the policy void ab initio. The estate of one who dies intestate may mean all the property which he leaves for his widow, heirs, next of kin, and creditors,-the whole body of his property as he leaves it at his death. His creditors have the primary lien and claim thereon,-first upon the personal property, and, if that be not sufficient, then upon his real estate; and by appropriate proceedings the creditors can enforce their claims against both the personal and real estate. The real estate conveyed by Richards to Sage remained a part of his estate. Sage had no personal interest in it. It was not conveyed to him for his benefit During the life of Richards he was bound to administer it for his benefit in the payment of his debts as directed in the trust deed, and to return the balance to him, and after his death, if there was any balance, he was bound to return it to his heirs as a part of his estate. If this real estate was not a portion of the estate of Richards, to whose estate did it belong? It did not belong to the estate of Sage. It was to go under the trust deed preciscly where it would have gone if the trust deed had not been executed, to wit, to the creditors. It was a part or Richards' estate, to be administered for the benefit of his creditors, just as it would have been by his administrator if the trust deed had not been executed. Therefore the words ‘estate of O. Richards' were comprehensive enough to include all the interests in the property left by Richards, and among them those covered by the trust deed. All the property belonged to the ‘cstate.’ There was thus no defect in or qualification to the title of the estate, and the exact interest in the property insured was truly stated in the policy when estate. At least, we think this was a it was represented as belonging to the estate. At least, we think this was a possible view of the evidence which the trial judge could take, and that, therefore, it is sufficient, so far as concerns this point, to uphold the judgment. In Clinton v. Insurance Co., supra, the policy was procured by an administratrix upon real and personal property on her behalf, and for the benefit of the widow and heirs of the intestate, and the premium was paid out of the estate, and it insured ‘the...