Moore v. Hanover Fire Insurance

Bartlett, J. On the 15th of July, 1890, defendant insured the property of one Maggie P. O. Smith for a period of three years, issuing to her a standard policy, the loss, if any, first payable to Barbara O. Bikert, mortgagee, as interest might appear. Barbara 0. Bikert was the owner of a mortgage covering the insured premises, executed by Maggie P. C. Smith, the owner. On the 17th of August, 1891, Mrs. Bikert having died in the meantime, her legal representatives began an action to foreclose said mortgage, which proceeded to judgment, and the premises were advertised to be sold October 26th, 1891. Three days before the date of sale the dwelling house covered by the policy was destroyed by fire. The defendant declined to pay the loss, and plaintiffs, as legal representatives of the mortgagee, began this action to enforce payment. *222 The answer sets up, by way of defense, that the defendant did not have knowledge or notice of the commencement of the said foreclosure proceedings, or of the notice given by the referee of the sale of the property covered by the said policy, nor did the defendant assent thereto by agreement indorsed upon the policy. The policy reads that “ this entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void "x" * * if, with the knowledge of the insured, foreclosure proceedings be commenced or notice given of sale of any property covered by this policy by virtue of any mortgage or trust deed.” The special term found that both the plaintiffs and Maggie P. 0. Smith, the insured under said policy, had knowledge of the said foreclosure proceedings on the said 17tli day of August,. 1891. The policy contains a further condition material to be considered, viz.: “ 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 subject of agreement, indorsed hereon or added hereto; and as to such provisions and conditions, no officer, agent or representative 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 this policy exist ‘or be claimed by the insured unless so written or attached.” The special term found that, before the commencement of the foreclosure proceedings upon the mortgage alleged in the complaint, the plaintiffs in this action informed J. H. Thorn, a duly authorized agent of this defendant at Rhinebeclt, that they were about to commence such proceedings, and the said agent agreed that such proceedings might be commenced without injuring the plaintiffs’ rights under the policy. It is further found that there is no evidence that the said *223 J. II. Thorn, the alleged agent of the defendant, ever noted upon any register kept by him- that the said foreclosure action or proceeding had been commenced. The policy was read in evidence, and is signed by the president and secretary of the defendant and by J. H. Thorn, agent. There is no other proof as to the power and authority of Mr. Thorn, except that he was the duly authorized agent at Rhinebeck and signed the policy as above. It is also found that no agreement or consent for the commencement of the said foreclosure action and proceedings, or for the giving of a notice of the sale of the property covered by the said policy, or by virtue of the said mortgage and of the foreclosure of the same, was indorsed upon the said policy of insurance or added thereto. The defendant insists that, in the absence of such agreement or consent indorsed upon the policy, the foreclosure action and sale rendered the policy void. The court below held the notice to the agent Thorn of Rhinebeck that the action was about to be commenced and his verbal assent thereto constituted a waiver of the provisions of the policy. We are of opinion that this is error, and the judgment, appealed from cannot be sustained. There was no mortgagee clause attached to this policy, simply the provision that loss, if any, first payable to mortgagee as interest may appear. The contract of insurance was with the mortgagor, and the undertaking to pay the loss to the mortgagee was collateral and dependent upon the principal undertaking, and if there has been a breach of the conditions of the policy by the assured the plaintiff cannot recover. ( Weed v. London & L. Fire Ins. Co., 116 N. Y. 106 ; Grosvenor v. Atlantic Fire Ins. Co., 17 id. 391; Bidwell v. Northwestern Ins. Co., 19 id. 179 ; Perry v. Lorillard Fire Ins. Co., 61 id. 214.) The sole question is the construction of the standard policy issued under the requirements of chapter 488, Laws of 1886. The precise point involved in this case has been before this court frequently since the enactment of the law of 1886. The *224 use of the standard policy was compelled by legislative enactment to remedy existing evils, and, among others, to protect insurance companies from the jicrils of alleged jDarol waivers by their local agents. Every person who now enters into a contract of insurance is required to agree that no officer or agent or other representative of the company shall have power to waive any provision or condition of the policy, except such as by the terms thereof may be subject of agreement indorsed thereon, and as to such provisions and conditions the waiver must be written upon or attached to the policy, and he specially covenants that he will not claim any privilege or permission unless it be in writing. The judgment appealed from ignores the plain provisions of the contract of the parties relating to foreclosure and waiver, and is contrary to the decisions of this court on the precise point presented now, and others which involve the same principle of construction. In Quinlan v. Providence Washington Ins. Co. (133 N. Y. 356) the necessity of notice in case of foreclosure was considered. Judge Axdbews, in discussing the question of alleged waiver, said (p. 363): “It is to be assumed that Kelsey ” (the agent of the company) “ learned of the commencement of the foreclosure proceedings, and thereupon assured the plaintiff that his rights under the policy would not be prejudiced thereby.” Again, at page 366, after holding that the principle that courts lean against forfeitures is unimpaired, says: “ But where the restrictions upon an agent’s authority appear in the policy, and there is no evidence tending to show that his powers have been enlarged, there seems to be no good reason why the authority expressed should not be regarded as the measure of his power; nor is there any reason why courts should refuse to enforce forfeitures plainly incurred, which have not been expressly or impliedly 'waived by the company.” The following cases are also in harmony with these views, viz.: (Armstrong v. Agri. Ins. Co., 130 N. Y. 560; Baumgartel v. Prov. W. Ins. Co., 136 id. 547; Allen v. German Am. Ins. Co., 123 id. 6; Messelback v. Norman, 122 id. 583; *225 O’Brien v. Prescott Ins. Co., 134 id. 28 ; Lett v. Guardian Fire Ins. Co., 125 id. 82.) The foregoing cases are so cogently reasoned and the conclusions stated therein have so long been the settled law of this court, it is unnecessary now to do more than refer to them. The judgment appealed from is reversed, and a new trial ordered, with costs in all the courts t/Pabide the event. All concur. Judgment