Devens v. Mechanics & Traders' Insurance

Andrews, J. The policy on the “ Decker ” contained the following warranty: “ Also warranted to be securely moored in a safe place, satisfactory to this company, between noon of the 10th day of December and noon of the 1st of April following, and the company to be duly notified of the time and place of laying up,” and following this printed clause was a clause in writing: “ Privilege to lighter in Hew York harbor during the winter.” The “ Decker ” was not used for lightering during the winter, but was laid up at Port Johnson, about twenty miles from Hew York, from the 25th day of December, 1877, to the 12th day of May, 1878, when she was destroyed by fire, caused by the boiling over of pitch, which the captain was heating in the cabin. Ho notice of the laying up was given to the company. A notice was given to one Smith, but this was not notice to the company. Smith acted as insurance broker at Watkins, and solicited applications for insurance in the defendant’s company. He was not in the employment of the defendant, but had been accustomed to obtain and forward applications of insurance to the defendant, and if accepted, the company would issue policies, and send them to Smith to be delivered to the applicants. The company, in pursuance of the practice of insurance companies in such cases, paid Smith a commission on policies issued through him. This was the only dealing between Smith and the defendant. The secretary and general manager of the company testified that Smith was not an agent of the defendant. Smith was not examined as a witness. His declaration to the plaintiff, when he solicited the insurance, that he was the defendant’s agent, did not bind the company. The case is directly within the decision of this court in Mellen v. The Hamilton F. Ins. Co. (17 N. Y. 609), in which it was held that a broker who effects insurances under no employment by the insurers, but for a commission paid by them upon the pro *172 miums received for such risks as he procured to be offered, and they chose to accept, is not an agent in such a sense that the insurers will be bound by notice to him after the policies are issued. There was, therefore, a breach of the warranty contained in the policy, and the policy was forfeited thereby, unless as is claimed the privilege to “ lighter in New York harbor dming the winter,” wholly dispensed with the warranty, and justified the plaintiff in omitting to notify the company of the time and place of mooring the .boat. This contention cannot be maintained. The privilege granted qualified the absolute undertaking expressed in the previous warranty. It permitted the plaintiff to use the boat in lightering in New York harbor, and if the plaintiff had availed himself of the privilege, there would have been no breach of the warranty so long as the boat was so employed. But if the “Decker” was not so used, the warranty attached, and the plaintiff was bound to moor the boat, and notify the company. No reason can be assigned why the company should dispense with the warranty if the plaintiff did not avail himself of the privilege to use the boat as a lighter. The fair and natural construction of the contract is, that the boat should be moored and notice given, unless the plaintiff elected to use it in lightering as permitted by the policy, and that the plaintiff so understood it, is apparent from his giving notice to Smith, although, by reason of his want of authority, the notice was ineffectual. There was no waiver of the defense now insisted upon, by what occurred, when the plaintiff served the proofs of loss. They were served by the plaintiff upon the general manager of the company at the office in New York. The plaintiff when he delivered them asked the manager, if they were all right, and he said they were, and the plaintiff then asked him how much was due on the policy, and the manager relied, “We considered not any thing, and that it was the carelessness of the captain of the boat.” The manager disclaimed any liability on the policy. His omission to put his disclaimer expressly upon the ground of a breach of warranty *173 in answer to an inquiry as to the amount due to the plaintiff was not a waiver of this defense. The case is quite different in its circumstances from the case of Brink v. The Hanover F. Ins. Co. (80 N. Y. 108). In that case proofs of loss were served on the company, and-the company retained them and examined the insured in respect to them, and decided not to pay the loss upon the ground of fraud, and so declared to the assured. Thereupon the action was commenced, and at the trial the company failing to prove the fraud, sought to raise the question that the proofs had not been served in time, and the court held that the company by their conduct had waived this defense. Church, Ch. J. said: “ They may refuse to pay without specifying any ground, and insist upon any available ground, but if they plant themselves upon a specified defense, and so notify the assured, they would riot be permitted to retract after the latter has acted upon their position as announced, and incurred expenses in consequence of it.” The doctrine of waiver was, we think, properly applied in that case, but it should not be extended so as to deprive a party of his defense, merely because he negligently, or incautiously, when a claim is first presented, while denying his liability, omits to disclose the ground of his defense, or states another ground than that upon which he finally relies. There must, in addition, be evidence from which the jury would be justified in finding that with full knowledge of the facts there was an intention to abandon, or not to insist upon the particular defense afterward relied upon, or that it was purposely concealed under circumstances calculated to, and which actually did, mislead the other party to his injury. Neither of these positions can be affirmed upon the evidence in this ease. The statement of the manager was not inconsistent, with an intention to insist upon the defense now made. When the conversation occurred, the loss had not become payable. If, at the time ' the manager had in mind the breach of warranty in not notifying the company of the time and place of mooring the boat, he may have regarded the fact that the fire was caused by the carelessness of the captain, as bearing *174 upon the equity of this defense, and have made the statement to justify the denial of liability. But however this may have been, there was, we think, no sufficient evidence to establish either a waiver or an estoppel. Nor was the direction of the defendant to the master of the boat to store the anchors and other articles saved, a waiver of the defense now made. The policy provides that the acts of the insurers in saving and preserving the property insured shall not be considered as affirming or denying any liability under the policy. We think the court erred in directing a verdict, and that the judgment should be reversed and a new trial granted. All concur. Judgment reversed.