Gibson Electric Co. v. Liverpool & London & Globe Insurance

O’Brien, J.: The policies provide as follows: “ This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void 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:” It was established, and we do not understand that it is disputed, that there was a violation of this condition by reason of the commencement of foreclosure proceedings after the issuance of the policies, with the knowledge of the insured, and that judgment of foreclosure and sale was entered before the happening of the fire. In Quinlan v. Prov. Wash. Ins. Co. (133 N. Y. 356) this condition in the standard policy was under consideration, and it was held that its violation rendered the policy void. (See, also, Armstrong v. Agricultural Ins. Co., 130 N. Y. 560; Allen v. German American Ins. Co., 128 id. 6; Messelback v. Norman, 122 id. 583 ; O’Brien v. Prescott Ins. Co., 134 id. 28; Lett v. Guardian Fire Ins. Co., 125 id. 82.) It is conceded that the foreclosure proceedings having been commenced and ripened into judgment before the fire, this rendered the policies void. But it is insisted that the acts of the insurance companies in proceeding with the adjustment of the loss after knowledge of the forfeiture waived it. Upon this question of what would constitute a waiver we are referred to the leading case of Titus v. The Glens Falls Ins. Co. (81 N. Y. 410), a case in many respects like this. The differences, however, between the policies and the law relating thereto are marked and distinct. Those here [228] involved are standard policies, which went into effect in May, 1887 (Chap. 488, Laws of 1886), which form of policy, among other things, provides: “ This company shall not be held to have waived any provision or condition of this policy or any forfeiture thereof by any requirement, act or proceeding on its part relating to the appraisal or to any examination herein provided for.” Unlike, therefore, the policy involved in the Titus case, the one here under consideration has a legal sanction for a provision which in express terms declares that no waiver shall result from “ any requirement, act or proceeding *" * * relating to the appraisal or to any examination.” In addition, we have the form of the appraisal agreement on the separate appraisals as to the machinery and as to the building items of the policies, in evidence expressly providing as follows: “It being understood that this appointment and submission is without reference to any other questions or matters of difference within the terms and conditions of the insurance, and is of binding effect only so far as regards the actual cash value of, and the loss and damage to, said property.” The facts relied upon to show a waiver, consisting of the trouble and expense connected with making the proofs of loss and presenting for examination, books and papers, and in paying an appraiser, were all connected with the appraisement itself, and are, -therefore, covered by the provision in the standard policy to which we have referred, and in that respect the present case differs from the cases which have arisen under the old forms of policy, of which the case relied upon, of Titus v. The Glens Falls Ins. Co. {supra), is the leading one. The last expression of the Court of Appeals bearing upon insurance policies is to be found in Kiernan v. Dutchess County Mut. Ins. Co. (150 N. Y. 190), which was an action to set aside an award, made by appraisers under a policy of fire insurance, as fraudulent and void, and to recover the amount of the policy. It does not appear in that case whether it was an old form policy or a standard, but we do not think that an examination thereof will aid the appellant in sustaining its contention that the acts relied upon constituted a waiver, for while, as therein held in conformity with a long line of decisions, an election by the company to insist upon the forfeiture of a fire insurance policy for breach of its conditions must be asserted within a reasonable time after acquiring knowledge of [229] the breach — which ruling is not applicable to the present case — it is also held that when an appraisal of the loss under the fire insurance policy is proper in any event, the mere fact that one was had at the request of the company has no bearing upon the question of waiver or forfeiture. As therein said: “ The most of the acts of the company tending to show its intent to waive the forfeiture were independent of the appraisal, for some of them preceded while others followed it. They did not bear such a relation to it as to be excluded from consideration under the clause of the policy upon the subject of waiver. Without prolonging the discussion upon this point, we announce as our conclusion that the evidence, independent of all acts relating to the appraisal, sustains the finding of a waiver by the trial court.” Here all the acts relied upon to show a waiver were directly connected with the appraisement, and, as we have seen, as they were expressly provided against, they cannot now be relied upon, contrary to the provision in the policy, as effecting the very thing which that provision was aimed at preventing. Upon the law, therefore, we think the learned trial judge was right in holding that there was no waiver, as he was equally right upon the facts, because it appeared that at the time the appraisal was commenced the companies had no knowledge of the foreclosure of the mortgage, and did not obtain it until some weeks afterwards; and there is no evidence that the companies did anything to induce the insured to do anything or to incur any expense which would prevent them, within a reasonable time, from insisting upon the forfeiture. It is true they permitted the appraisal to proceed to an award, but within a reasonable time thereafter they availed themselves of the forfeiture, and during that period, which was a short one, nothing was done by the companies to injuriously affect the insured, or induce it to change its position or lead it to believe that, with full knowledge of the forfeiture, they had waived it. We think the judgment was right and should be affirmed, with costs. Van Brunt, P. J., Barrett, Rumsey and Ingraham, JJ., concurred. Judgment affirmed, with costs.