Graham v. Home Insurance

Hinman, J.: It is our view that the warranty, “ while occupied by owner and tenant,” must be construed not only presently but prospectively covering the period of the policy. It is also our view that the context does not indicate that “ or ” was intended for “ and.” There were two dwellings on the farm. The former owner occupied one and the tenant the other at the time of the issuance of the policy. The respective rates for occupancy by the owner and the tenant were different. If there had been no intervening renewal of the policy for the benefit of a subsequent owner, we think there could be no question but that the warranty was an enforcible one and that if the former owner had abandoned occupancy, he would have avoided the policy so far as it covered the premises supposed to be occupied by the owner. [104] It is our opinion, however, that the situation was changed so far as the present owner was concerned. The reissuance of the policy to the plaintiff was in effect the issuance of a new policy. (2 Cooley Ins. 1063; Hayes v. Saratoga & Washington Fire Ins. Co., 81 App. Div. 287.) Cooley says: “ An assignment of a policy of insurance with the consent of the company to a purchaser of the interest of the insured constitutes a new contract between the assignee and the company.” (Citing authorities.) At the time of the transfer in this case and preliminary to the issuance of this policy to the plaintiff, the plaintiff and his grantor went to the defendant’s agent for the purpose of having the transfer of the policy made. The plaintiff told the agent that he had a home of his own and was not going to live on the premises. As was said in Gray v. Germania Fire Ins. Co. (155 N. Y. 180, 184): “ It is well settled in this State that where an insurance company issues a policy, with full knowledge of facts which would render it void in its inception if its provisions were insisted upon, it will be presumed that it by mistake omitted to express the fact in the policy, waived the provision or held itself estopped from setting it up, as a contrary inference would impute to it a fraudulent intent to deliver and receive pay for an invalid instrument.” (Citing authorities.) The learned trial justice has held that this doctrine was not applicable on the ground that the warranty “ while occupied by owner and tenant ” was promissory. He erroneously assumed that the policy was valid in its inception under what was said further in Gray v. Germania Fire Ins. Co. (supra, 184), and within such authorities as Ripley v. Ætna Ins. Co. (30 N. Y. 136). The theory of the Ripley case so far as a promissory warranty is concerned seems to be that knowledge of present conditions by the agent does not interfere with the promissory warranty which looks to the future, because the agent would have the right to assume that the present condition of the insured would not affect his promise made in the policy thereafter to do differently. (Van Schoick v. Niagara Fire Ins. Co., 68 N. Y. 434, 442.) Moreover, what was said in Gray v. Germania Fire Ins. Co. (supra, 184) to the effect that the defendant’s policy in that case was valid in its inception and that if it became invalid it was by subsequent acts of the plaintiff in that case, has no application here, for the reason that this agent knew that the plaintiff was not in occupancy of these premises at the time and did not intend to occupy them. In other words, the policy was not even valid at its inception within the meaning of what was said in Gray v. Germania Fire Ins. Co. (supra), nor did the agent have any right to assume that the premises would be occupied by the owner in the future in [105] accordance with the policy, within what was said in the Ripley and Van Schoick Cases (supra). Therefore, it seems to us that the general rule so well settled, quoted above, with reference to waiver, has application to the facts in this case and that the warranty in question was waived. Since the defendant’s motion for a non-suit was erroneously granted upon this issue, the judgment should be reversed upon the law and a new trial granted, with costs to the appellant to abide the event. H. T. Kellogg, Acting P. J., and Van Kirk, J., concur; Hasbrouck, J., not sitting.